Where Did All the Skill Go? Labor in the Digital Age

Caught up in the war for talent, engineering companies need to think differently about their workforce and how to set it up for success.

“What is really amazing, and frustrating,” wrote science fiction author Isaac Asimov in 1981, “is mankind’s habit of refusing to see the obvious and inevitable until it is there, and then muttering about unforeseen catastrophes.”

Although a comment that could be applied to many things now, in the context of engineering and skills, it rings particularly true. So much has been said on the future of work in recent years and yet so little seems to have been done.

Back in 2018, a now much-quoted Korn Ferry study called The $8.5 Trillion Talent Shortage predicted that by 2030, there will be a global human talent shortage of more than 85 million people, with manufacturing (7.9 million) and technology and media (4.3 million) two of the most affected sectors.

A lot has happened in five years and although ChatGPT was nowhere on the public radar back then, AI, automation and its potential impact on the workforce were constant themes. Today, we can throw leading technologies such as digital twins into the engineering mix and everything that conjures in terms of required skills.

As we look forward, it is important to understand what those skills are and how the latest technology is reshaping the recruitment landscape.

“Every company is a technology company”

Victoria Pelletier, a seasoned speaker on the future of work who’s held senior roles at Accenture and IBM, says that the rapid acceleration of digital transformation has led to a significant shift in roles. The most in-demand skills she’s now seeing within the sector include AI, Web3, AR, VR, IoT, data analytics and visualization and of course, cybersecurity.

The problem is that this list is also relevant to several other sectors, heightening competition for skills. “Every company is a technology company,” Pelletier told engineering.com, but she also points out that there is more to it than purely recruiting a set of people with the latest tech skills.

“There is a need to change the way they work and not just what they’re working on,” she says, referring to the adoption of agile methodologies and DevOps practices. This, she adds should also be driven by a change management function “to ensure the transformation is successful.”

Claire Rutkowski, SVP and CIO Champion at Bentley, agrees. “Hiring for technical expertise isn’t enough anymore,” she told engineering.com. Like Pelletier, she spoke of the need for tech-based skillsets, but also people with experience in sustainability and an understanding of environmental impact.

“Many engineering firms are also looking to reinvent themselves by offering entirely new lines of business—like software services and hosting,” says Rutkowski. “This requires augmenting their teams to include more cybersecurity experts, developers, marketers and digital innovators.”

How to win the war for talent

Any such shift surely re-defines recruitment strategies within the sector. As Pelletier says, there has been “a war for talent,” exacerbated by the pandemic and the rush towards digital tools to enable remote working. The big beneficiaries, she adds, have been service businesses and consultancies that have plugged the gaps. Now, there is “a significant need to build the skills with existing staff to be able to maintain the institutional knowledge, engagement and retention of employees while addressing the demand for growth and transformation,” says Pelletier.

This need to build skills is key. Where there is a move towards more tech-focused capabilities, inevitably skills are also being made redundant. Think of any routine manual processes such as data entry, quality control and analytics, and it’s possible to see automation taking over. The point is that advanced software capabilities are forcing the issue, as engineering organizations and manufacturers look to automation to improve productivity.

This, it seems, is the focus for industry. As Deloitte found in its 2023 Global Technology Leadership Study, less than a quarter of execs surveyed say attracting and developing talent is a top priority. Optimizing operations, modernizing legacy systems, and improving security are top of the agenda—but how can organizations achieve this without the right skills in place?

No retrain, no gain

Prioritization is going to be key for any organization looking to modernize but also keep a lid on costs. For Maziar Adl, co-founder and chief technology officer at Gocious, a product roadmap management software business, using technology to improve productivity must be front and center.

“Companies who increasingly rely on automation and advanced data analysis tools are quickly looking to swap out older processes for new, innovative solutions to help streamline workflows and increase efficiency,” Adl told engineering.com. “Secondly, skills that are excessively siloed may become obsolete as more teams integrate their operations. Engineering firms are now seeking people with a diverse skill set who can contribute across several areas of expertise and collaborate well in cross-functional ways to help achieve the wider company’s overall goals.”

Clearly, with any skills shortage, it makes sense to look inward, to redefine roles and train employees accordingly. Easier said than done, but there are encouraging signs that organizations are recognizing the need to develop and promote new skills from within.

“All the firms I talk with are actively engaged in upskilling their workforce, through virtual training programs, in-person learning events and mentorship,” says Rutkowski. However, she warns that this can also be challenging given widely differing levels of digital maturity and employees spread across multiple locations.

“There are also challenges which are relatively unique to engineering,” says Rutkowski. “Most engineering firms run, to a large degree, on billable hours. Any time taken for training reduces the amount of time available to be billed, which can have an impact on revenue. Trying to balance the need to train with the need to bill is proving to be a struggle, particularly in smaller firms where the margins might not be particularly high.”

This is perhaps where outside help comes in, either in terms of temporary additions to the workforce from consultancies or in the form of training support. Pelletier references the example of Delta Airlines, which is leveraging technology partners such as IBM, to “assist in re-skilling their technology workers in addition to supporting with the digital transformation and cloud modernization directly.”

Utilizing partner capabilities makes a lot of sense, especially as so many engineering firms will no doubt be managing a workforce with aging employees. Traditional culture can play a surprisingly strong role in slowing down transformation, or in some cases creating total inertia. Rutkowski puts this down to disjointed transformation strategies. How can companies know what skills they want if they don’t have an idea of where they are going in terms of digital transformation?

It’s a view shared by Pelletier, who refers to it as “one the greatest challenges,” within the sector. While reskilling can be difficult, it is the associated change management where so many businesses continue to struggle. Pelletier says it’s “the lack of willingness by many workers to move to the new ways of working” that is slowing progress.

With any shift to outcome-based business models enabled through IoT sensors, AI-driven predictive analytics and increasingly, digital twins, the need to address the skills issue becomes even more paramount. A new generation of digital natives will only go so far. Demand is outstripping supply and as interesting and exciting as the new automated, virtualized and dynamic world may be, it will still need skilled people to drive it.