Getting people-ready for the fourth industrial revolution
While still in its infancy, the Fourth industrial revolution (Industry 4.0) is already transforming industries from delivering of packages via the use of drones to tracking driving patterns for insurance premiums.
Even large incumbents in banking and retail are not spared from the rise of Fintech, the use of cryptocurrencies and related technologies.
The recent controversy surrounding Cambridge Analytica revealed the sheer power of machine learning used to obtain insights as well as its potential weaponisation. Where then are Malaysian organisations placed in all of this?
The promise of Industry 4.0
Malaysia is attractive for start-ups and data technology development.
Support from government-backed organisations like Malaysia Digital Economy Corporation (MDEC), which has been pushing for growth in the big data scene and stronger data literacy, along with Malaysia’s high level of digital adoption makes it fertile ground for data-enabled innovations.
An example is Glueck, a local start-up that utilizes artificial intelligence, facial-recognition and machine learning algorithms to measure audiences’ emotions and other demographic interests, enabling advertisers to broadcast just the right message to their customers.
Then there is Malaysian-born, Grab, the ride-hailing app which drove Uber out of ASEAN. Industry 4.0 thus offers great promise in creating of new industries and developing new skills for our workforce, leading to much needed improvement to the country’s productivity and competitiveness.
Additionally, it provides a base for innovative and entrepreneurial individuals to create new and exciting products and services.
As Malaysia’s economy continues to transition towards services and move up the value-chain, demands for greater productivity and better customer experience are pushing companies to prioritise their products and services offered and therefore employee capabilities.
Thus, to gain an edge in this hyper competitive environment, specific capabilities need to be infused in the workforce.
High skill, high pay
Headline news often casts this new wave of digitisation and automation in a negative manner, threatening to take away jobs and making people and skills redundant.
They are not entirely incorrect. Technology is changing jobs to the degree that skills held by those jobs will be redundant.
However, as with any paradigm shift in the economy, new high-valued jobs requiring more sophisticated skill-sets will appear, creating a more dynamic workforce.
As technology pushes companies to be more agile and global in their outlook, organisations will in turn become more transparent and flexible.
They will shift from traditional hierarchies to flatter, more collaborative structures.
This will reshape the employer-employee relationship moving towards flexible short-term arrangements and increasingly differentiated pay and benefits structures.
Flexibility is a reflection of the democratisation of the workplace, which rewards value creation through short and long-term incentive plans.
Concurrently, as products are delivered with greater personalisation and productivity, work for producers (read: employees) will become less monotonous and the results less homogeneous.
This lack of homogeneity will separate high-performers from the rest of the workforce, leading to further prominence of “High-Skill, High-Pay” within the employee rewards ecosystem across industries.
Jobs which have been with us for the past decades are also receiving a fillip, as evidenced in Aon’s 2017 Compensation Survey.
A Japanese sous-chef today earns 44% above the average wage of similar level jobs compared to 6% below average in 2013, whilst Operating Theatre nurse managers and technical engineers are earning 23% above average in 2017 when they were earning at the average in 2013.
Developing existing talent
The development of existing talent hinges on long range planning of critical skills which businesses need in the next 5 to 10 years, investment in deploying the right learning strategy, and weaving this with talent management and rewards programmes so that top talent is engaged and continues to stay with the organisation.
Companies which are ahead of the curve are looking inward to support their current employees in their development needs so that they will be able to acquire the skills required to perform well in the jobs to come.
This also means, these organisations will have gradually let go of some of the job roles, which would be irrelevant for their organisation in the long term, and free up resources for the future.
Industry 4.0 coincides with the coming-of-age of millennials, who possess a more democratized mind-set and tend to exhibit strong entrepreneurial spirit.
While the scars of the 2008 Global Financial Crisis are not forgotten, the initial fear and lower risk-appetite that resulted is receding.
Although these trends will not affect all organisations evenly, to stay-ahead-of-the-curb, business leaders would likely encourage use of short and long-term performance incentives which harnesses entrepreneurship and prudent risk-taking.
Industry 4.0 is here and revolutionizing everything from industrial production to finance and commerce.
In the end, technological disruption always yields predictable results – a jump in economic productivity and new, unimagined opportunities.
Employers and business leaders need to therefore get themselves people ready lest their organisations become obsolete.