Future of Work: Building a skills-powered workforce in the age of AI in Asia  

Without workforce skills alignment, companies' risk having new technology compromise productivity and impact employee well-being. 

Despite the potential for technology and artificial intelligence (AI) to increase efficiency and productivity, our latest Global Talent Trends survey found that 62% of Asia’s executives and HR say they adopt new technology without transforming how they work, with “too much busy work” cited as the top reason for depleting productivity.

Source: 2024 Global Talent Trends - Asia

Implementing new technology at the workplace should not be an end, but many organizations may be overlooking the need for initiatives to help employees adapt and learn new skills. For instance, three in five employees surveyed say their organization is not good at communicating how AI or automation will improve the way they work. 

The truth is that, to build an adaptable workforce, employers must be first to adapt: What approach should organizations take to transform their workforce and operational models effectively to complement new technology? 

Globally, over 53% of executives we surveyed project that AI and automation will lead to a 10 to 30% productivity boost to their organizations in the next three years. However, these gains depend heavily on whether these organizations can adapt their people and operational strategies, starting with work redesign. 

Work redesign, which is a process where existing job responsibilities and tasks are reviewed, revised and reallocated, can reveal skills gaps within an organization as well as opportunities to upskill and reskill strategically to bring about sustained increases in productivity. This process can benefit many organizations today as existing talent models, which are more focused on job functions versus skills, are often too rigid and lack the agility required to respond to new technologies.

Work redesign is essential to transitioning from a jobs-based model to a skills-powered model capable of unlocking talent potential and adaptability amid rapid technological change. According to our survey, 63% of human resources (HR) professionals in Asia reported that work redesign has already helped increase productivity.

According to our Global Talent Trends 2024 report, half of the executives agree that employee training, upskilling and reskilling will give the biggest boost to productivity. To ensure an effective transformation of your workforce for a machine-augmented future, these three skills-based strategies can help boost workforce scalability and productivity: 

• Deconstruct jobs and redeploy tasks
  Optimize work and create new ways of connecting people to work that reflect the changing needs of their business.
• Unlock organizational agility 
  Develop work models that enable alternative talent pools and flexible working to quickly scale capacity up and down without adding full-time headcounts. Use retention-based talent pools to help manage scarcity and competition, and outsource specialized skills when demand outpaces buy/build models. 
• Identify opportunities from automated work 
  Free up talent from routine tasks and match them based on skills according to organizational needs and problems. 

• Create a skills taxonomy & ontology
  This helps companies recognize crucial interconnected organizational skills to support workforce upskilling and reskilling, as well as career-pathing.   
• Identify skills and map these skills to employees
  This can provide a clear picture of skills employees have, including those they do not use for their existing job roles. When new competencies are required, organizations can identify those with the greatest potential to adapt and excel. 
• Develop a proficiency framework
  Companies need to assess employees against a proficiency framework — using feedback or formal tools — to establish differentiation based on levels of competency or expertise with any given skills. Of the 60% of companies that manage skill proficiency levels in Asia, 24% manage them centrally while 36% manage them locally via business departments or teams, according to our 2023/2024 Skills Snapshot Survey Asia Report 
• Design a skills-based rewards program
  This incentivizes skills development and career progression, and aids talent attraction and retention. Our survey found that 28% of organizations in Asia (vs 17% globally) have skills-based rewards programs in place.

According to our Skills Snapshot Survey - Asia, respondents are optimistic about having a skills-based rewards program with many linking rewards and skills to: 

• Employee self-reporting
  We found 51% of organizations in Asia used employee self-reporting to map skills to individuals. While cost-effective, it may give an incomplete skills profile as employees could face difficulty evaluating their skills.  
• Regular skills assessments
  Managers and peers are asked to evaluate or validate their colleagues’ skills regularly. However, this is a time-intensive approach that can be difficult to scale. The better option may be a segmented assessment strategy based on multiple factors, such as evaluating the criticality and maturity of skills-based practices. Assessments are also increasingly incorporating technology to support a positive employee experience.  
• AI tools for assessments
  Our survey found that 78% of organizations are either using or planning to use AI for skills assessments. AI can infer skills at scale more efficiently based on existing data about employees (job history, learning profile, credentials etc.), which can surface new insights about enterprise skills supply and demand. These skills can then be validated by peers or skills experts, or further assessed by assessment tools to derive more robust employee skills data. 

A focus on implementing skills-based practices can help your organization maximize the potential of human capital and save costs, as this case study shows: 

A global leading financial institution is keen to have its workforce ready for an evolving business with shifting priorities. The company approached Mercer to rapidly identify and deploy talents with the right skills to the most critical aspects of the company in a fast and scalable manner.

Using the following approach, Mercer identified “hot skills” that are highly critical in the client’s industry for success:

• Inferring “hot skills”: AI is used to cross-reference and refine the baseline of “hot skill” clusters between the client’s strategic priorities, focus areas, vision, and Mercer’s industry research. 
• Identifying “hot skills”: We create a shortlist of “hot skill” cluster identification criteria relevant to the company’s strategic priorities, taking emergence, time scale and versatility into account. 
• Industry sessions: We conducted validation sessions with small and medium enterprises (SMEs) to further refine hot skills, deep diving into competencies within the skill groups that drive the greatest impact and mapping them to the client’s technical competency framework and Job Family Framework (JFF) architecture. 
• Mobilizing “hot skills”
  Analyzing sources of data on job families, skills in demand, and talent supply within the organization, we identified a pilot area where the mobilization of hot skills could unlock value and create growth opportunities. Additionally, we identified technologies that use AI to help match workers’ skills and project opportunities at scale. 

As a result, hot skills were identified for the client globally across business functions so they can redeploy talent wherever the need arises.  

While there is steady progress in adopting and experimenting with skills-based approaches in Asia, 42% of organizations cite HR capability or capacity as the top barrier. To overcome this, companies can partner with a trusted HR consulting firm that brings in-depth experience from various industries.  

Mercer is helping companies and governments in Asia transform into skills-powered organizations by leveraging AI and our proprietary data and analytics. We are committed to helping organizations unlock the potential of human capital in a machine-augmented world with bespoke and effective solutions.  

Schedule a non-obligatory chat with a Mercer consultant today.