Shift in Job Market Doesn’t Need to Be a Nightmare

Are you a little scared of the future? I think we all are. And for good reason.

There’s so much to think about these days, especially with technology disrupting our jobs. But if you have watched a few horror films, you’ll notice things become far less scary when you understand what’s really going on.  For me, my shoulders relaxed a little and I reached for popcorn again after I read a report from the World Economic Forum about job transitions.

The report reveals next-job opportunities for employees displaced by economic and technological disruption.

The U.S. labour market will see a structural job loss of 1.4 million jobs over the next 10 years, according to the Bureau of Labour Statistics. However, the report also cites a structural growth of 12.4 million new jobs.  On average the job market will be better.

However, let’s set aside the average for a moment and focus on the 1.4 million individuals who will be put out of work.

The report analyzed at a thousand job descriptions representing the majority of the American workforce and looked for similarities in skills, abilities, qualifications, and the work itself.  The job-matching methodology was created by Burning Glass Technologies, a firm specializing in labour market analytics harnessing big data and artificial intelligence.

Using the 10-year labour market forecast, they identified the job families where the largest number of jobs would disappear, identified other job families forecast for growth, and mapped-out how people could transition from lost jobs into new jobs.

Production and Office & Administration jobs are projected to be the hardest hit. In every other area there are fewer job losses expected, and the new-but-different jobs created within a job family greatly exceeds jobs lost.

Jobs in Production (which includes the beleaguered manufacturing sector) have a high similarity to emerging jobs in Construction and Extraction; Installation, Maintenance and Repair; and Transportation.  Positions in Office & Administration have a high similarity to emerging jobs in Business and Financial Operations.  And a large number of handy and hard-working people can always find a job in custodial or food services.

But if you lost your job, would you want to be a barista?

The Desirability of Job Transitions

Thankfully, the report considers whether peoples’ next jobs are desirable.  A significant drop in pay won’t motivate employees to seek reskilling.  Stability is also a top concern.  The investment in re-skilling or moving costs can be expensive, so some transition opportunities might be rejected just because of the instability.

Desirability isn’t all in the mind of the employee. Governments want a successful transition to achieve a good return on their investment in training programs. They don’t want to undermine their tax base with a low-wage workforce. And some governments are also concerned about the experience of workers as voters.  Employers need successful transitions too, as they fear of a workforce of demoralized, dissatisfied, and under-productive employees.

The report factored-in all these concerns and categorized viable job transitions as those that have high similarity, stable long-term prospects, and wages that are equal or better than the previous job.

They found plenty of opportunities:

 “…our analysis is able to find ‘good-fit’ job transitions for the vast majority of workers currently holding jobs experiencing technological disruption — 96%, or nearly 1.4 million individuals…  Interestingly, the majority of ‘good-fit’ job transition options — 70% — will require the job mover to shift into …a new job family.”

Job Transition Pathways

One of the benefits of this sophisticated model was that the authors of the report were able to extend the career transitions from a one-time change into “a full chain of job transition pathways” covering three jobs.

For example, a secretary can downshift into becoming a concierge, then come out ahead as a recycling coordinator. Each new job has a solid 90% similarity score relative to the prior job, but the salary bounces from $36k to $31k to $50k.

There is a similar trade-off for the transition from cashier to barista to food service manager.  So yes, you might still want to become a barista.  Employees could come out further ahead if they could see these pathways and plan accordingly.

Job Transitions are Different for Women

There are mixed results based on the sex of the worker.  On the minus side for women, it is estimated that 57% of the disruption will affect women.  Women also have fewer job transitions options: “Without reskilling… professions that are predominantly female and at risk of disruption have only 12 job transition options while at-risk male-dominated professions have 22 options.”

But women also have a better chance at job transitions that result in increased wages.  Of those experiencing labour disruption 74% of women have a good match into higher-paying jobs while the equivalent number for men in 53%.

This difference may contribute to a “potential convergence in women and men’s wages,” but this impact would obviously need to be blended with those economic forces that don’t favour women.  By which I mean, most economic forces.

Men and women alike significantly benefit from reskilling efforts, resulting in a quadrupling of the new job options available.  With reskilling, opportunities for women jump from 12 job options to 49, and opportunities for men jump from 22 options to 80.

A Change in Societal Mindset is Required

The report recommends societal changes in order to make this all viable:

“…what will be required is nothing less than a societal mindset shift for people to become creative, curious, agile lifelong learners, comfortable with continuous change.” (Links added)

On the public policy side, there is an additional shift in mindset for corporations and government:  pick up the tab or everyone is toast.

The main item that would empower this change is a comprehensive re-skilling program funded at full scale.  Displaced workers need to take some responsibility and show some initiative. But nobody in their right mind is suggesting that the cost of all this should be borne by anyone other than business and government.

While the consequences of inaction are dire for individuals and society, the path forward is becoming better understood.  It’s that part in the scary movie where they can see the way out.  And for that reason, it’s not so scary any more, and might even be fun to watch.