US president Donald Trump may have used his platform at the World Economic Forum (WEF) in Davos, Switzerland this week to claim America had a “stunning turnaround” as the unemployment rate hit a 50-year low.
However, the US still has a workforce problem.
Current unemployment figures don’t reveal the full picture. For example, levels of income and whether those employed are managing the cost of living. It also doesn’t take into account whether those in employment now have the skills to survive in an impending global disruption to the workforce where robotics, artificial intelligence, and automation are going to replace jobs. It doesn’t matter if “more jobs will be created” in the age of greater digitisation if the service industry worker cannot programme a computer, for example.
It’s for this reason that the bosses of some of the largest banking, tech, and consultancy companies in the world laid out which countries and corporations are preparing for the fourth industrial revolution and who are lagging behind.
Speaking at a discussion, entitled ‘Leading a 21st century corporation,’ at the World Economic Forum (WEF) in Davos, Credit Suisse (CS) CEO Tidjane Thiam led the talk on how Switzerland is a role model for shaping the workforce of tomorrow.
The rich country has about 8 million people, with 3 million counted as migrants and unemployment is around 2%.
“I think Switzerland has resolved a number of conundrums,” said Thiam.
“It’s wealthiest country in the world, by assets to GDP, yet inequality is the least, globally. This is linked to quality of education system at all levels. High immigration matched with low unemployment is usually a very tough equation to address [for countries in general] but Switzerland has [seemed to have solved it].”
Thiam pointed out how the society’s approach to preparing the youth for the workforce is practical and progressive. For example, “apprenticeship is a central point” — meaning 80% of youth go through these programmes where they get a degree after several years but are practically trained in areas that allow them to have the tangible, and less esoteric, skills to fill a demand in the economy.
Kevin Sneader, global managing partner at major consultancy McKinsey said: “The reality is that tech is coming in, which we all embrace and it can be incredible for the good... or not. But it has created a nervousness for jobs. Trust in business also wasn’t what it used to be. We have to do something differently.”
The panel discussed how the US needs to address these issues and that includes rethinking the way people hire.
Chuck Robbins, chairman and chief executive of IT giant Cisco Systems (CSCO) used an example of his sister to highlight the problem in how the US values workers. She is 55-years-old and works at a rural school in Georgia and has been working for decades. However, she has faced challenges to get a job in the same sector when considering relocation because she doesn’t have a college degree.
“We have to look at skills, if you don’t have a degree — who cares?” he said.
“What the US is doing is wrong. The number one [thing to change is that] as employers, we have to discard the historical criteria on how we hire people. We can’t look down or disregard people if they don’t have a degree.”
Sneader lent support to the idea. He calls it an issue with “credentialling.”
“We need to get rid of the old way of doing it. In the US, only a third of Americans have a four-year college degree, for the remaining two-thirds, we need to identify skills and recognition.
“Jobs aren’t for life. What I tell clients is that we have to shift from ‘it’s a sad day they’re leaving,’ to ‘when they come back.’ It’s about training for employability, not employment.
“The third part is to disband the idea of young versus old and nature of work. Some people stay in companies for 12 years, now the average is two — we have to recognise and celebrate diversity and different types of jobs, and rate of unemployment in some areas.”