Batten down the hatches: both a “tsunami of skills” And According to a panel of McKinsey executives, there is a “silver tsunami” on the horizon.
In 2010, the U.S. had about 12 million more unemployed people than there were job openings, senior McKinsey partner Anu Madgavkar said at the consultancy’s media day last week. “Despite the ups and downs of Covid, things are more normal now, but we still have a shortage: 2.5 million more vacancies than job seekers.”
This imbalance, coupled with ever-present advances in AI, has created what Madgavkar calls a “skills tsunami.” She defined the term as the massive shift in skills that workers will soon need. There is also, she added, a “silver tsunami,” describing the institutional loss of talent and perspective as millions of older workers retire.
Responding to both tsunamis with agility comes down to supporting and nurturing employees. “How do we increase internal mobility to help our existing workforce learn more skills?” said Madgavkar. “How do you get back to performance management? The companies that do this well are ultimately the most successful.”
An important aspect of performance monitoring will be continued productivity growth. On the panel, Kweilin Ellingrud, director of the McKinsey Global Institute, defined productivity growth as simply “producing more, with the same or fewer inputs.” It matters to everyone, even those at the very bottom of the corporate ladder, because productivity growth determines living standards over time. The good news: Average productivity growth has increased sixfold since the turn of the millennium, Ellingrud said. “Globally, productivity is a great story.”
“Customers ask: How can I equip the middle manager to deliver full value to their other teams?” Brooke Weddle, a senior McKinsey partner, said. “That will likely require fewer managers, and for those that remain, a realignment of their roles.”
Then there are the persistent talent shortages, both in the technology sector and in the skilled trades. “Given the churn we are experiencing, not only do we not have enough skilled workers, but there is also a mismatch resulting in what we call $5 billion in costs to American businesses,” Weddle said.
This story originally appeared on Fortune.com
Batten down the hatches: both a “tsunami of skills” And According to a panel of McKinsey executives, there is a “silver tsunami” on the horizon.
In 2010, the U.S. had about 12 million more unemployed people than there were job openings, senior McKinsey partner Anu Madgavkar said at the consultancy’s media day last week. “Despite the ups and downs of Covid, things are more normal now, but we still have a shortage: 2.5 million more vacancies than job seekers.”
This imbalance, coupled with ever-present advances in AI, has created what Madgavkar calls a “skills tsunami.” She defined the term as the massive shift in skills that workers will soon need. There is also, she added, a “silver tsunami,” describing the institutional loss of talent and perspective as millions of older workers retire.
Responding to both tsunamis with agility comes down to supporting and nurturing employees. “How do we increase internal mobility to help our existing workforce learn more skills?” said Madgavkar. “How do you get back to performance management? The companies that do this well are ultimately the most successful.”
An important aspect of performance monitoring will be continued productivity growth. On the panel, Kweilin Ellingrud, director of the McKinsey Global Institute, defined productivity growth as simply “producing more, with the same or fewer inputs.” It matters to everyone, even those at the very bottom of the corporate ladder, because productivity growth determines living standards over time. The good news: Average productivity growth has increased sixfold since the turn of the millennium, Ellingrud said. “Globally, productivity is a great story.”
“Customers ask: How can I equip the middle manager to deliver full value to their other teams?” Brooke Weddle, a senior McKinsey partner, said. “That will likely require fewer managers, and for those that remain, a realignment of their roles.”
Then there are the persistent talent shortages, both in the technology sector and in the skilled trades. “Given the churn we are experiencing, not only do we not have enough skilled workers, but there is also a mismatch resulting in what we call $5 billion in costs to American businesses,” Weddle said.
This story originally appeared on Fortune.com
**Navigating Workforce Challenges in the Age of AI and Retirement**
In a recent panel discussion, McKinsey executives highlighted an impending “skills tsunami” and “silver tsunami” that could significantly impact the labor market. Anu Madgavkar, a senior partner at McKinsey, explained that while the job market has normalized since the COVID-19 pandemic, there remain 2.5 million more job vacancies than job seekers in the U.S. The “skills tsunami” refers to the substantial shift in required worker skills due to advancements in AI, while the “silver tsunami” describes the large-scale retirement of older workers, leading to a loss of institutional knowledge.
To address these challenges, companies must focus on internal mobility and performance management to help employees acquire new skills. Productivity growth, which has increased sixfold globally since 2000, is crucial for improving living standards and will be a key metric of success.
Brooke Weddle, another senior partner at McKinsey, emphasized the need for middle managers to adapt and realign their roles to maximize team value, despite a likely reduction in their numbers. Additionally, persistent talent shortages in both the technology sector and skilled trades are causing significant financial strains on American businesses, estimated at $5 billion in costs.