Technology is transforming not just the tools businesses use, but it's having a fundamental effect on the workforce as a whole. How companies adapt and prepare their workforces for the digital era will have a direct impact on their bottom line, and even their survival. Mercer and Oliver Wyman have joined forces to help companies restructure their workforces for the digital era, and we caught up with Oliver Wyman Partner Axel Miller for some insights about how workforces can be transformed to meet the coming challenges.
Consulting: How did this partnership with Mercer come to pass?
Miller: With Oliver Wyman as one of the premier management consultancies and Mercer one of the leading HR consultancies, it was natural for us to combine insights in terms of the industry development, market development, technological development, business and operating model changes knowledge Oliver Wyman brings to the table along with the tools and overarching data Mercer brings on the HR side. That was the rationale for the partnership. The driving force was that both companies recognized as our clients move towards implementing new technologies like artificial intelligence, they were starting to question what impact that would have on their workforce and how should they deal with it. How is my workforce going to change? What kind of workforce will I need in 5 to 10 years in terms of size and shape and how do we need to adapt to get there?
Consulting: Where are some areas you see organizations and workforces furthest behind in preparation for this digital era?
Miller: It varies by industry. Technology is more advanced in for example insurance or banking, but pretty much across the board I think workforce implications haven't really been considered systematically in most cases. There is new technology that has been identified as potentially applicable to help create efficiencies and increase productivity. Our clients are trying to get a handle on what kind of technology to implement, how to work with vendors and which ones to use. Another area is organizing the development and implementation of that technology, and now as they move towards prototyping or advanced use cases, our clients start thinking about the implications on their operating models, the business models, and the workforce.
Consulting: What are strategies companies can use to prepare their workforces?
Miller: There are two elements here. One is forecasting and planning and the other is the recognition that this is not only something mechanical but fundamentally a transformation journey. The kind of workforce companies will need in 5 to 10 years will look materially different in terms of shape and the kinds of qualifications than the one we have today. If you think through and analyze the impact of automation, the impact of changing skillsets in existing jobs, new jobs, new roles and then add to the mix basically new business models and services emerging with new requirements you can get to a point where basically only 20 to 30 percent of the current workforce will remain untouched and develop the skills and abilities themselves to cope with that future environment. All the rest will need to be retrained, reskilled, redeployed, etc. That means a fundamental transformation journey. That's one of the key aspects of the strategy that people should become aware about and start thinking actively how to approach this in terms of a transformation journey. The second element is where it all starts. There's a great degree of uncertainty around it and a whole series of different estimates around impacts lying around. Companies should start running dedicated analyses that look at all the different scenarios and forecasting the impact of new technology on the workforce in order to get a feel and direction of where it might end. With technology developing very rapidly there can never be a specific target point, "in five years we will need X," but those scenarios will help companies think through the implications and get to grips with what is lying ahead in terms of their transformation journey.
Consulting: What will the direct impact be on workforces?
Miller: If you imagine you had a clear picture as to what kind of capabilities and capacities companies will need in order to implement their future business models, people will probably fall into four categories. One is they will stay in their roles and develop the capabilities more or less themselves. The second category is they will need to be retrained completely. A third category will probably be workers who won't be able to continue in that environment and will need to find a new role or job, either inside the company or outside. The fourth are the ones that will need to be hired.
Consulting: What do you see as the biggest consulting opportunities around digital transformation?
Miller: I see it more in terms of the big challenges that are there, fundamentally a lot of companies out there will need to transform their business models and the way they interact with external partners in order to survive and thrive. In that process, they need help. That's an area where we can help. On a higher level, all of this obviously has societal and public policy implications. Pretty much every country and government is asking themselves what it means for our educational system, for our vocational programs, what kind of policies do we need in order to address these changes in the workforce.
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