Jobs of the future – transition strategies and planning
What will the demand and supply of jobs in the future look like? At the recent Global Access Partners Jobs Summit Kathryn Matthews, Partner of Deloitte Access Economics, discussed rigidity, transition strategies and planning, drawing on research undertaken at Deloitte under the umbrella of ‘Building the Lucky Country’.
Better collaboration between government, industry and education is required to drive national progress. Such cooperation is poor in Australia compared to its regional and global competitors. While Australia has been the ‘lucky’ beneficiary of the recent mining boom, circumstances may become less comfortable as it diminishes.
Prosperity is a function of a nation’s people, productivity and terms of trade. The larger the working population, the greater its output, and the smarter and more efficient the nation’s production becomes, the greater its income will be. The more the rest of the world is willing to pay for Australian exports when compared to the cost of Australia’s imports, the more its terms of trade improve.
Australia has enjoyed continuous growth in living standards in recent decades, but success in each decade was driven by different factors. Productivity growth in the 1980s and 1990s was the result of microeconomic reforms which improved competition policy and labour market settings, alongside the development of personal computers and the early internet.
The first fifteen years of the 21st century saw less productivity improvement, but Australian prosperity was buoyed by a major improvement in its terms of trade. Rampant industrialisation in China increased demand for Australian minerals, benefitting both output and prices, and gave the nation a handsome increase in its international ‘salary’. As the mining boom wanes, some have struggled to see where the next national ‘pay rise’ is coming from. The baby boomers are retiring, removing their output from the economy, and the current rate of productivity improvement will be hard-pressed to maintain current living standards.
I remain optimistic, however, as a Deloitte paper entitled ‘Positioning for Prosperity’ identifies five areas with growing export opportunities in which Australia enjoys a comparative advantage – tourism, international education, agri-business, gas and wealth management. At least four of these are also amenable to improvements in technology which will boost productivity. While this ‘fabulous five’ are all smaller than the mining industry, when aggregated they amount to a similar size. Having a variety of sectors to replace mining also reduces the risk if a single sector fails.
The predictions made in a 2012 Deloitte paper on digital disruption – ‘Short Fuse, Big Bang’ – have already been overtaken by events as digital techniques transform traditional business, drive innovation and deliver more customer centric outcomes. Companies exploiting the opportunities of digital disruption are enjoying much higher revenues than traditional businesses which are not. Deloitte is disrupting its own business model by delivering accounting services online and has achieved significant success.
Deloitte calculate that red tape costs the Australian economy $250 billion every year. While there is obviously a need for legislation in the public interest, and an acceptance that such regulation delivers economic benefit, more attention should be paid to the cumulative effect of additional measures, no matter how well intentioned each piece may be. Laws should be reviewed, and old or obsolete stipulations removed, more assiduously. The numbers of people employed in the private sector to ensure compliance with their own internal procedures is also on the rise, and while the finger is always pointed at government, the commercial sector must also revisit the processes and oversights it imposes on itself. Indeed, while technology has slashed the staff employed in ‘back office’ positions, these reductions have been counterbalanced by a steep increase in the number of compliance officers over the last 20 years, leading to businesses ‘peddling hard to stand still’. Deloitte canvassed its own workforce to discover ‘the dumbest thing we do’ and is using those results to track and change 101 counterproductive internal activities.
Turning to the supply of labour, Australia must think more broadly about the future composition of its workforce and the skills they will require. The attention given to STEM subjects should not exclude the consideration of other practical skills which can be redeployed to meet new circumstances. One medical technology company in Queensland was hampered in the release of a new device by an inability to recruit the skilled seamstresses required in its manufacture. The company recruited a group of needle workers from a textile factory facing closure and brought their product to market on time. Skills shortages can arise, and be filled, in many ways beyond the usual parameters of the workforce debate.
I’d like to underline the importance of every industry improving its connections and collaboration with universities, and the wider education sector to improve its pool of potential labour. Business may also use non-traditional methods to outsource activities, including crowdsourcing, or target skilled immigrants. Businesses must also offer more flexible working arrangements to employ and retain skilled and experienced people, for whom full-time employment is impractical or undesirable. Older people may want to work fewer days a week, while people juggling family and caring responsibilities may seek a better balance between life and work. Companies should increase workforce diversity by employing suitable disabled, minority or Indigenous workers and think laterally about sourcing the skills it needs, as the Queensland medical company did.
In summary, I’m calling for government, business and individuals to take a broad view in reskilling Australia for the future. Australian businesses must embrace diverse workforce participation, encourage collaboration and invest in retraining their workers. Alongside the potential of the ‘fabulous five’, many jobs will be created in other areas and activities which have not been envisioned today. While career paths will continue to fracture, the opportunities of a non-linear working life must be embraced with optimism, rather than feared. The ‘new normal’ will see people ‘zig zag’ through their careers as new opportunities arise. More varied resumes should demonstrate ambition and imagination to prospective employers, rather than inconsistency.
Kathryn Matthews is a Partner at Deloitte Access Economics and has extensive experience in economic policy analysis and strategy development across a range of sectors. She has worked in the private sector, academia and government including the Reserve Bank of Australia, Macquarie University, Ernst & Young, Jones Lang LaSalle and the NSW Government.
Max Thomas
December 15, 2015 at 1:59 pm
Odd jobs for the future?
A very insightful if not prophetic contribution by Deloitte Access Economics. Government policy that would stimulate industry as never before to invest in training for work not yet envisaged let alone defined? From the likes of Hockey who told us at once to go out and spend but also to live within our means? I don't think so. Not likely either from Morrison who communicates his economic vision with lines appropriated from "The Castle." The Deloitte vision of people confidently 'zig-zagging' through their brave new careers, borrowing and spending as if nothing has happened leaves everything to the imagination. We are constantly reminded that business and commerce depend on 'certainty' and calls for less red and green tape grow ever more insistent. But on subsidies, tax concessions and rebates etc, the silence is deafening. The encumbents of these odd jobs of the future can expect no such certainty. Perhaps Deloitte really has cracked the future and they are busily training staff to take advantage. Market forces being what they are, the poachers must already be abroad. Goodness knows what they're offering.