Hire for skills, not degrees - a new paradigm to tackle disenfranchisement in the digital economy

Profile picture for user slauchlan By Stuart Lauchlan January 22, 2019
The World Economic Forum Annual Meeting takes its agenda into the area of skilling up the workforce in a digital economy.

McDermott makes a point

As the World Economic Forum Annual Meeting in Davos entered its third day, the themes of loss of consumer trust, data privacy and the changing nature of the role of businesses in the digital economy continued to dominate, but into the mix came the need to have a new hiring paradigm as well.

This morning saw Ginni Rometty and Bill McDermott, CEOs of IBM and SAP respectively, discuss new forms of leadership in conversation with Proctor & Gamble CEO David Taylor and Hitachi Chairman Hiroaki Nakanishi. It was a wide-ranging discussion that ranged from the practical to the aspirational and back again.

McDermott majored on the themes of trust and experience, two sides of the same coin he argued when it comes to tackling the “ambivalence around the impact of technology on the average person”. While he and his fellows on the panel knew tech to be “the driving force of innovation and growth”, that isn’t a societally-held position:

You have trust and you have experiences. More than two-thirds of people out there are worried about losing their job to a robot…so tell that person to love technology! I wish you luck with that argument. How do we create the trust and the experiences that are necessary? How do you make brands religions where people are completely loyal to them. If you look at the economy today, $1.6 trillion is leaked by losing existing customers…We have to acknowledge that technology can be a force for value creation . Value creation creates jobs, it creates great training programs, it creates opportunities. We have to put technology in the context of experiences. We’re in an experience economy. People can relate to that.

For her part, Rometty opened up her wider agenda, citing her ‘New Collar’ worker ideas. These argue that alongside traditional white and blue collar workers, businesses now need to look to develop a generation of New Collar workers, digitally-skilled and sourced in a new way:

As businesses we have to believe that we’ll hire for skills, not just for their degrees or their diplomas. Otherwise we’ll never bridge this gap. All of us have companies that are full of university degrees and PhDs; you’ve got to make room for everyone in society. You need to have new paradigms. You need to have new pathways that don’t all include college education. You’re going to have to have respect for the jobs….I really do believe that 100% of jobs will change. I looked at new jobs created in the US over the past 10 years and two-thirds are digitally-enabled jobs. You have this big gap between people who are in the workforce today - 30, 40, 50 and up - who don’t see that they have the skills for the future.

For Rometty, one of the big drives she gets behind is advancing apprenticeship schemes to create a workforce that can be universal:

I think there is a huge inclusion problem. A large part of society does not feel that this is going to be good for their future. Forget about whether it is or it isn’t, or what we believe - they feel very disenfranchised. Government cannot solve that problem alone. Those of us who build technology or benefit from it, we have a very serious duty. These technologies are moving faster in time…causing the skills crisis. It’s going to mean that for society to participate broadly - if it’s the US, not just the two coasts…Most people would say that tech has left the middle of the United States behind.

Nakanishi made the point that business needs to look beyond business itself:

Some of the enterprise variables change completely. The product-oriented approach should change to more customer, social, more human-oriented approach…how to reorganize the final targets, the final goals is a very important mission for the corporate leader.

That was an idea picked up by P&G’s Taylor, who argued that organizations today have to answer to a much broader church than they have in the past:

Today every company has to decide who its stakeholders are. In the past, it was much more focused on shareholders. Most CEOs today pay attention to a much broader group of stakeholders. Beyond that, consumers and that broader group of stakeholders want to know not only what the CEO thinks, but also how our brands come forward.

You have to have a point of view, much more today than in the past. Performance alone would build a brand in the past. If the brand doesn’t have a point of view and if the behavior isn’t consistent with the values that the company espouses, then you have a real issue…it’s elevating the authenticity that companies have to have when they communicate with various stakeholders. There’s a very high bar now - and it’s going up.

Most companies have purposes that go beyond quarterly earnings…P&G touches 5 billion consumers a year. We have the chance both to improve lives with the quality of our products and…we can communicate important societal messages…I don’t believe that companies are only focused at the shareholders.

My take

Some passionate convictions being aired, with IBM’s Rometty on particularly evangelical form.

As noted above, there was a fair bit of aspirational positioning going on in parts, but that was balanced out by exemplars like IBM’s workforce expansion in Middle America or some of the citations of inclusivity programs across the various participant companies.

At the end of the day, this was a very Davos-y debate - some good ideas, some interesting comments, now go away and let’s see the fine words being put into long term practice.