Unemployment is the biggest challenge to a developing nation. I believe that there is immense scope for startups to enter this space and create a business opportunity. Global politics has become antagonistic as employable jobs reduce not just in developing economies but even in the developed ones. The classical model of every individual aspiring to study higher and higher and seek a better position in the meritorious capital of life seems to be broken.
Employment as a concept
Before the arrival of the industrial revolution energy needed to do anything was either through manual labour or through domesticated animals and farming was the method to disguise unemployment.
People worked for families and tribes with the resources shared among kith and kin. The concept of private property led to the idea of hired labour which in turn led to manual labour in factories to build textiles or utensils and other consumables. The ability to convert energy from fossil fuels tractors reduced manpower required in farming initiating the first-ever concept of unemployment.
The 18th Century industrial revolution in Britain ushered the second phase of unemployment by mechanising factories involved in spinning yarns and weaving clothes. The third phase of automation by Ford and the fourth phase of automation by digitisation has made the unemployment crisis much larger than ones ever faced earlier.
Automation and Employment
Automation has dramatically changed the relevance of position roles in organisations. Companies tend to replace manual labour with automation in areas where there is; a) need for standard data across the process like supply chain, b)information no perceived value add, c)scope for reduction in human error, d) reduce cost and e) save on issues related to people management. The World Economic Forum estimates that the replacement of 85 million jobs with automation has increased the need for learning new skills for the new 97 million roles that will emerge due to a new imperative for people and technology to work together.
This form of drastic elimination of roles and the creation of new jobs places immense pressure on the whole of society to find employability and manage joblessness across the globe.
Employability is a function of the business which needs skills and the currently available labour pool. The speed of disruption in businesses means there is a continuous need for new skills. But the overall process of old skills being phased out and new skills needed on a large scale has a time span and an agile economy works towards these waxing and waning events. The current job structures are broadly classified as;
- CXO level
- Mid Management
- Back Office workers
- Line Workers
Entrepreneurship is seen as the critical spirit of job creation. Entrepreneurship is aided by;
- Nation and community culture influences entrepreneurship but has a long evolution curve
- Ease of Capital availability
- A culture to not see failed entrepreneurs as discards and use their experience in new roles
While entrepreneurs are perceived as self-starters, yet there are many training models built to help them succeed in their businesses.
This level develops only through experience and functional skills. Training along the way helps an individual become better in their jobs and can facilitate both the process of fast growth as well as better skills. The role needs more structural knowledge and less functional skilling as those skills would have been acquired during their work tenure.
This level added value by moving from being a line functionary to supervisory by coordinating and checking the outputs generated by the line function. As technology helps automate manual supervision and processes the span of control has reached 1:40 from an ideal of 1:12. Many supervisory and control metrics get monitored through automation reducing the need for manual checks and hence mid-management roles.
Back Office Workers
Jobs like book-keeping and secretaries are the kind of back office jobs which provide information and support to the middle management and CXOs to sustain productivity and efficiency. These jobs are slowly getting replaced with automation.
Lineworkers are the largest labour group with the role of generating and delivering products or services. Manufacturing, the biggest employer of factory workers in the Industrial era, has seen the maximum shedding of jobs. While line workers in factories have reduced there has been a large increase in jobs for engineers, software code-writers, and back-office processing jobs.
This large shift is a great indicator for the topic of skill development in the future and the role of education and skill developing businesses in facilitating this shift. While it is easy to start off with a new skill at the start of an individual’s working career, it is tough to shift mid-stream. The rest of this article looks at how to consistently look at new skills and business opportunities for startups in the skilling space.
Challenges to new/upskilling
While there is a principle agreement to build a consistent process for upskilling the current labour force or training on new skills for the modern economy yet there are many challenges to this process;
- Agriculture, the de-facto employer in many underdeveloped countries, doesn’t have the capacity to absorb the large growth in the working population.
- Automation has taken away many of the manufacturing and grunt labour jobs
- Labour policies that were seen to be employee-friendly have pushed capitalists towards avoiding manual labour, especially in permanent form.
- The cost of education is increasing on an annual basis
- Lack of jobs means people are working below skills gained through education
- Lack of systemic support for upskilling. A current employee cannot take time from his work and family to dedicate to new learning programs
- Lack of Financial support for break-in between jobs towards upskilling. Denmark is a rare country that has a special and new program for employed people who have not completed the modern Folkeskole program. The program takes 16 weeks full-time or up to two years part-time. The Danish government pays full unemployment benefits to the person’s employer and the employer pays the person’s regular salary to the individual.
- Lack of institutional support and design. For example, while BPO services in India employ millions of workers, there is no government-designed or industry body-designed program to build skills. The job is left to the individual company to skill its raw employees or private schools which charge the student fees with the risk of not landing the job.
New Skills for employment
Pew research classifies the new skills into three core families of job skills – social, analytical, and physical. Generally speaking, social skills encompass interpersonal skills, written and spoken communications skills, and management or leadership skills. Analytical skills refer to computer and mathematical skills and the importance of critical thinking. Physical skills pertain to the ability to work with machinery or equipment, manipulate tools, and do physical or manual labor.
Automation cannot replace soft skills, complex decision making and creativity. Automation can manage to provide solutions where variables are clearly defined, but human problems are largely ill-defined and have a large emotional component to them. Solving them needs empathy, lateral thinking, and emotional intelligence. Hence the future of work will need these skills from humans;
A study done by Oxford University about roles that will be affected by automation and those which will not be is mentioned in the table below.
- Complexity: When there are multiple parameters to be juggled to an ill-defined problem, humans should handle solutions for other humans. Businesses that will put machines in front of humans with such complex issues, will not gain traction with their customers.
- Critical Thinking: Softer aspects like interpreting a law, or building a brand connected with consumers need nuanced critical thinking. A brand message which will work with a customer cannot be figured out by a machine.
- Creativity: A particular beat in a music sequence or an architect designing a complex are achieved by a degree of intuitive randomness that can not yet be imitated by AI.
- Empathy: People management, coordinating with others, decision-making, negotiation, and serving others will all be important going forward as well.
The new skills can be created by training the workforce for skills required now and for the future. The skilling process should be available on a mass scale so as to facilitate the process of building a large pool of ready to deliver workforce. The training process should also have the facility to push new skills which will be needed in the future or at least have the capability to shift the skilling courses available based on employment demand. Training on these skills should have the inbuilt capacity for a trained person to pursue a higher level of skill in pursuit of the process of up-gradation and ambition.
Skilling in this category is tough and needs a long-term vision facilitated by governments and social bodies. Many organisations today have a business model shaping up entrepreneurs.
Working Models for employment creation
As governments globally are realising that unemployment can create disenchantment there will be an institutional push to skilling as the culture of the nations aspiring to impact the lives of citizens positively. Currently, most of the skilling continues to remain in the space of white-collared workers, that too largely in the computer space. All the new skills are being learned at these private MOOCs under the sole initiative of the individual seeking to upgrade himself rather than a structural organisational or governmental support.
The world economic forum has developed a report based on expert consultations. The report identifies four areas where extensive work is required for upskilling. A common vision across all stakeholders viz; governments, industries, and the education sector can help to develop comprehensive national upskilling agendas. The pandemic provides an opportunity to reform education systems and rethink skills training to benefit more people. To do this, however, governments, industries, trade unions, and educational institutions will need to work together.
All stakeholders: Build a strong and interconnected ecosystem committed to a comprehensive upskilling agenda and give people the opportunity to participate.
- Map the evolving job landscape and forecast future skills demand
- Collectively determine a set of indicators that measure the quality of employment at the industry, national and subnational levels
- Establish a common research framework to understand the dynamics and projections of labour markets and skills mismatches
- Identify policy levers that succeed in guiding labour market transformation and the provision of good jobs
Government: Governments have to build national upskilling initiatives which are dynamically adaptable to work with business, nonprofits and the education sector;
- Prioritise funding for upskilling in national recovery plans
- Recognise the economic, skill-building and inclusion potential from government-sector employment and associated supply chains
- Support and provide incentives for green investments and technology innovation
- Nurture a pipeline of industrial investment projects via a “bottom-up” approach
- Encourage broad transparency of the types of skills and jobs that each economy needs on the medium to long term
Business: Invest in workforce upskilling as a core business principle and make time-bound pledges to act.
- Develop a clear “people plan”, using a people-centric approach in which technology is aligned to the needs of workers and society
- Make long-term commitments to upskilling employees
- Promote multidisciplinary collaboration (with a diversity of perspectives) across internal and external stakeholders
- Ensure common standards for workers by working with labour representatives
Education providers: Build pedagogy and differential levels of certification to ensure that employability remains a key criterion and build a culture to normalise lifelong learning for all.
- Prioritise vocational and higher education curricula that are “just in time” rather than “just in case”, working with business
- Scale up the provision of self-directed learning and nano-degrees for lifelong learning
- Build bridges between national qualification systems and lifelong learning so skills are recognised globally
- Connect schools and places of learning with each other globally
Startups facilitating upskilling
IndyWise helps startups and enterprises to build more productive workforces by giving employees a dynamic and personalised mentoring, identifying their strengths, achieving their goals & reaching their full potential. They provide access to insights about your employees’ performance and the business.
Skillset’s technology connects the best employees with the best employers, based on proven skills. Skillset’s algorithm automatically singles out talented candidates, based only on what’s important.
Vectorly is a progress monitoring app, as it monitors individual performances on an ongoing basis automatically. Skills matrices can be set up in the application for each individual, helps update performance instead of filling manual forms, sets up review meetings with performance metrics, and collates 360-degree feedback for discussions.
This application matches your employee’s skills, interests, and career aspirations to the projects available within the company. It helps both the company and the employee improve the output without having to spend time lobbying and worrying. It achieves this by enhancing the employee database, capturing attributes, and mapping them to roles.
Using AI sigma helps recruiters hire based on matches with the skills required. It avoids human prejudices and time wasted in shortlisting. The matches done through Sigma are claimed to have a 51% shortlist as compared to 15% when done manually.
Game Academy helps gamers to find meaningful, as well as mutually rewarding jobs. They use the tagline that by understanding the strengths of gamers they can map them to jobs where their strengths can be leveraged.
Acorn helps companies work with remote teams. It is not just a digital aid that provides companies with tools for remote working, but starts from coaching leaders to manage remote teams, helps design the structure and processes for working, and continuous nurturing of all the employees.
Zoora designs and delivers digital educational content in financial literacy, enterprise skills development, gender, better agricultural practices, and climate change effects leading to concrete behavioural change. The organisation is a community empowerment platform helping women and unemployed youth gain enterprise skills and smart agriculture.
SkyHive has built the world’s only Quantum Labor Analysis platform to optimise human economies in real-time for companies, communities, and countries. With the most powerful knowledge graph of jobs, skills, training, and labor market intelligence in the world, SkyHive democratises labor opportunities and future -proofs the global workforce in unprecedented ways.
Beamery is a unified, clean, and standardised database application that helps the user scour for talent which non-users cannot. It uses deep learning capabilities and is able to design the whole workflow so as to be able to manage candidate experiences through the process from shortlisting to hiring seamlessly.
Skilling businesses are true unicorns of the future as they are at the key intersection of two fundamental needs of modern living viz; Knowledge and Jobs. The business model will combine the education ecosystem and the employment ecosystem and hence will be a business that will be sought after by every human across a major part of their life span.
A model which startups should look at leveraging in the skilling business is presented below;
Scalability in this business will come with leveraged technology teaching skills virtually but with the ability of the user to interact with the trainer and other participants through a stimulated medium. Today’s technology lacks that and there is an opportunity to blend classrooms with technology-facilitated by a teacher sitting in a different location.
The moral dilemma in this business model is very similar to tertiary healthcare in private hospitals. As the fees for hospitalisation increases society starts demanding that healthcare be treated as a philanthropic cause rather than a business model. Education and skilling will have to learn to balance this conflict.
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