Posted: 16 Sep. 2019 05 min. read

The path to prosperity

Why the future of work is human

Introduction

The future of work is human. This inspiring insight follows Deloitte Access Economics’ analysis of changes to the nature of skills in demand since 1988, and extrapolations to 2030. From work of the hands (manual labour), to work of the head (cognitive labour), Deloitte Access Economics has identified an emerging need for work of the heart (i.e. soft skills such as judgement, resolving conflict and customer service). Indeed, as robotics and artificial intelligence change the nature of work, augmenting both work of the hands and  work of the head (e.g. completing excel spreadsheets and making calculations), humans will increasingly need to attend to non-routine work of the head (i.e. generating insights) and work of the heart (i.e. collaborating with diverse teams to make complex decisions). Historically, schools, universities and workplaces have mainly focused on developing and rewarding technical skills (e.g. data analysis). Therefore, the supply for soft skills is being outstripped by the growing demand.  

Using Australia as a sample of our research, the key message from The path to prosperity: Why the future of work is human is that investment in more skilled, happier and more engaged people is of material benefit to economic growth and will add $36B to the Australian economy each year.


Aim

The report examines:

- Whether technological change will augment or replace humans,

- How technology helps humans by automating routine jobs, so people can focus on more meaningful work (from hands and head to heart),

- The current and prospective set of skills that organisations are demanding, and, hence defining the future skills shortage - if action is not taken, and

- How the workplace has a key role in boosting productivity by investing in soft skills.


Method

The report quantifies the demand for, and supply of, skills across the Australian workforce, capturing a full range of skills, from those required for work of the hands (i.e. manual labour), to those required for work of the head (i.e. cognitive labour), to those required for work of the heart (i.e. soft skills such as customer service and leadership). The data used to make these draw these insights comprised:

Supply of skills: O*NET OnLine is a database that provides detailed information on US occupations and assigns each skill an importance level. The researchers created a composite list of 36 skills that described the range of competencies employers might seek albeit in varying combinations. The researchers matched each US occupation to a 4-digit Australian and New Zealand Standard Classification of Occupations (ANZSCO) and imputed the share of each occupation that holds each skill.

Demand for skills: Using job advertisement data from Burning Glass, during the period 2012-2018, the researchers captured over 9 million unique job postings. They examined the demand for skills in each 4-digit ANZSCO occupation by the skill requirements listed in advertisements for roles in that occupation, assuming that skills demanded in advertisements are reflective of skills demanded in an occupation overall.


Findings

The report debunks myths about workforce behaviours (i.e. that the majority of workers move roles every 2 years) and workplace locations (i.e. that the majority of workers are away from the office). Moreover, the report makes findings in relation to the nature of skills needed for the work of the future and the gap between supply and demand.


1. The nature of work for the future: skills of the heart

- The shift in work has been from work of the hands (i.e. manual-intensive, muscle labour) to work of the head (i.e. cognitive labour), to work of the heart (i.e. interpersonal and creative labour). 

- Skills needed to execute work of the heart are hardest to mechanise. Deloitte Access Economics predicts that soft-skill intensive occupations will account for two-thirds of all jobs in Australia by 2030.

- At the same time, cognitive labour is shifting from routine work into non-routine work. The degree to which a job can be automated is correlated to how routine it is.

- Women are more represented (56%) than men in the non-routine work of the head, which is expected to grow at the fastest rate over the coming years. Occupations dominated by females (60% or more) are almost all cognitive-based occupations (work of the head).

- By 2030, 25% of Australia’s workforce will be professionals, driven by a continued shift towards non-routine, cognitive-based jobs. Most of these will be in business, health, education and engineering.


2. The gap between demand and supply: skill currency.

- The average Australian worker is missing around 2 of the 18 critical skills that are advertised for a job. In Australia in 2019 that amounts to a shortage of 23 million skills.

- 8 out of the 9 skills (89%) classified as work of the heart, are in short supply. 16 out of the 23 skills (70%) classified as work of the head, are in short supply. 0 out of the 3 skills classified as work of the hands, are in short supply.

- The most in-demand skills relate to soft skills:

. 97% of Australian jobs require customer service skills. 5.5 million more workers are required with customer service skills than are supplied (severe shortage)

. 96% of Australian jobs require time management and organisational skills

. 70% of Australian jobs require verbal communication skills

- Five industries – government services, construction health, professional services, and education – all show more than 2 million skills shortages by 2030.


Implications

This report argues that investment in i) skills, in particular, soft skills, ii) better designed, inclusive and diverse workplaces, and iii) greater flexibility will lead to a more skilled, happier and more engaged workforce, which consequently will boost the Australian economy by $36B per annum. 

The following table highlights areas for action using the framework work-worker-workplace.

For more information, view the full report 

or contact Jess MizrahiCathryn Lee Juliet Bourke, or Maria Delgado 

Meet our author

Maria Delgado

Maria Delgado

Senior Analyst, Transaction Services, M&A, FA

Maria is a senior analyst within Deloitte’s Financial Advisory, Merger & Acquisition practice, with an international background in audit mainly for international construction and engineering companies such as UGL (CIMIC Group) or Ferrovial. With a passion for leadership, mindfulness and mind-related topics, she is currently enrolled in an online Post Graduate Diploma in Applied Neuroscience in King’s College of London.