As we near the third decade of the 21st century, business leaders face an unprecedented pace of change. The key to handling rapidly-shifting business conditions is a knowledgeable, empowered workforce. Businesses have always thrived on their people.
They are the difference between a reactive company that perilously watches changes unfold, and a proactive one that steers them.
Artificial intelligence (AI) has reached the point where it can democratize knowledge, unlocking it and making it available across the company in new and innovative ways.
IBM Watson services enables companies to do more with the talent they have by digesting implicit business knowledge and sharing it among employees in meaningful ways.
The problem for the C-suite is that those people are becoming harder to find. Macroeconomic effects are eviscerating the existing workforce, while cultural and social ones are making it harder to find and retain new blood.
This POV describes this macroeconomic problem in depth, and then explores the ways AI can help businesses bridge the talent gap.
Watson does this by discovering expertise previously hidden away in the company and scaling it across the entire business, enabling everyone to learn from it.
It translates this knowledge into actionable insights and delivers them to employees at the time and place that they need it most. This boosts employee performance where it matters.
Companies are eager to scale expertise across the workforce to solve a pressing problem. There is a gap for technical skills in the workplace extending across a range of sectors, from healthcare through to engineering. It is hurting business across the globe
Companies are bridging this talent gap by using a time-tested social norm: They get senior people to teach younger people. More than half of employers are now investing in creating internal talent by developing existing employees to fill open positions. This has increased from one in five, showing the urgency with which industry is tackling the problem.
40% of global employers
are reporting talent shortages, which is the highest number since 2007.
Pew Research has pinpointed the problem: Baby boomers are retiring
Boomers (which Pew defines as aged 51-60) are retiring in ever-greater numbers. The research firm is seeing 10,000 men and women retiring each day.
This leaves huge gaps in the workforce. In the healthcare industry alone, more than two thirds of boomer nurses are considering retirement. Who will be there to fill the experience gap when workers like these, with their years of expert knowledge, are no longer available?
The problem here is that the next generation down – Gen X, aged 35-50 – isn't big enough to pick up the slack. There are fewer people in this age bracket to fill these jobs as they become available.
Millennials (aged 18-34) are as numerous as boomers, which should provide employers with some hope, but this group follows a different behavioral profile. Those at the younger end of the spectrum do not have the decades of experience that boomers have accrued over a lifetime of service.
Millennial workers are also more nomadic in their careers than their older counterparts, switching jobs more frequently.
Gallup notes that:
six in ten millennials are open to new job opportunities.
One in five say that they have changed jobs in the last year, which is triple the number of non-millennials.
Job-hopping employees can make it difficult and expensive for employers to find and retain talent in this age group.
It will come as no surprise that this trend is hitting those companies relying on worker knowledge the hardest. Companies in professional services, finance and engineering are all facing similar issues.
One example is in law. Partner compensation research reveals that roughly 38% of partners in law firms will retire in the next decade.
As with some other industries, legal firms are finding it difficult to recruit new talent.
Between 2000 and 2008, companies in this sector grew their workforce by 5% per year on average. Today, that rests at 1.2%.
Why are legal firms struggling to replace their retiring boomer talent? Because the feedstock is drying up.
How can legal companies stop the rot? Automation is key to bringing newer recruits up to speed more quickly and complementing their knowledge.
Articling and first-year legal professions are traditionally saddled with mundane tasks such as reviewing commercial contracts, but they increasingly want to apply technology to solve these problems.
AI is a powerful force in automating mundane legal tasks, freeing up millennial legal professionals for higher-value work. IBM Watson's ability to collate and understand information is well-suited to tackle time-consuming legal research.
Lawyers can ask Watson questions using natural language. It delivers insightful answers that lawyers can use to complete their daily work quickly and more accurately. Its training in legal terminology and concepts supports human knowledge and decision making capabilities.
As a knowledge-heavy sector, financial services faces brain-drain issues similar to law. Bankers are leaving in droves, although the hemorrhage is more due to people leaving voluntarily than due to retiring boomers.
One thing we know about millennials is that they crave meaningful, fulfilling careers. Traditional banking, with its long hours and delayed reward, simply isn't cutting it. As regulators curb bonuses and the industry's reputation remains bruised by the financial crisis, people are looking elsewhere for employment. Headcounts dropped by almost an eighth in four years, and it is costing banks up to $1bn per annum.
Banks are finding it difficult to bridge this talent gap with new recruits:
7% of U.S. graduates
put banking and capital markets on top of their career lists.
Business school grads are naturally more inclined to these sectors, but even there, interest is waning. MIT Sloan School grads eyeing banking careers halved from 31% to 15% in the decade to 2016, while just 37% of Columbia's grads targeted finance in 2016, compared to 55% ten years prior.
As banks court more customers, the need to personalize and serve clients through expert knowledge grows. By using IBM Watson, banks can offset this declining influx of new talent by using automation to empower its human talent. It can assist employees with critical functions including elements of research, prospecting and customer service.
Drawing from deep industry-and company-specific knowledge, Training Watson to answer thousands of questions on dozens of products complements human agents' performance and improve customer service.
By understanding customers in context, it can use this knowledge to recommend products and services with confidence, improving customer relationships and boosting retention.
Closely related to banking is insurance. In this area, too, companies are finding that their existing talent is declining and difficult to replace.
According to a study by The Hartford, just 4% of millennials show interest in insurance as a career.
AI will play a big part in the insurance sector as it adapts to these changing patterns. IBM Watson can learn about the insurance industry by analyzing a company's structured and unstructured documents relating to risk and insurance premiums and products.
This creates a training platform for new sales agents, so that they can quickly understand the nuances of the insurance industry, and the company's own specific product and service set. By scaling expertise and learning across the entire workforce, Watson makes employees in this sector more efficient with clients, more quickly.
The public sector is an aging industry. In the U.S., one in four employees is now older than 55. A storm is coming as these workers prepare for retirement in the next decade. Who will replace them?
Certainly not millennials. Just 17% of federal workers are in this age bracket, and just 1.2% are under 24. The stream of younger people interested in a government career is drying up as they turn their back on longer-term pensions and other benefits that traditionally attracted government workers.
IBM Watson offers an opportunity to bottle existing government institutional knowledge and use it to get new employees up to speed quickly.
Some industries facing an aging workforce kick the can down the road. In oil and gas, which like many other sectors is seeing boomers leave, companies are doing their best to delay retirement as they scrabble to retain hard-won technical knowledge.
of oil and gas extraction employees were over 55 in 2016, compared to 16% in 2008 and 11% in 1999.
Hydrocarbon companies also face challenges in passing on knowledge from older to younger. Whereas boomers learned from manuals, millennials tend to like hands-on learning. Delays in extraction projects during the oil price crash have exacerbated that problem by making it more difficult for younger employees to learn from older ones on the job.
Encapsulating detailed knowledge and making it easily digestible is a use case made for AI systems like Watson. The technology has been proven to reduce the time spent searching for expert knowledge by 75%, leading to millions of dollars in annual savings as it makes more efficient use of highly-paid employees' time. It accelerates research and discovery in an industry that relies heavily on innovation in the race to find and use natural resources efficiently.
Skills shortages are also affecting the electronics and IT industries, reports indicate.
The problem here is not with a shortage of young professionals, many of whom are eager to work in this exciting industry. According to 28% of IT employers, the issue is the speed of technology development. It is moving so quickly that professionals find it difficult to keep up.
Although more than half of IT employers expect to increase headcount in 2018, new technology is outpacing training. Two thirds of IT employers face a moderate to extreme skill shortage and nine in 10 say this is negatively affecting business in areas such as productivity, employee satisfaction and staff turnover.
The other issue facing this dynamic sector is that workforces are often distributed and project-based. IT tops the list of industries for which telecommuting jobs are available, and temporary contractors make it difficult to retain a permanent base of knowledge.
IBM Watson can help bridge the gap created by a shortage of talent. The antidote to the talent shortage lies in business data; in the thousands of structured and unstructured records and documents that embody company knowledge.
By digesting vast amounts of industry- and company-specific information, Watson can turn it into new business insights that change how employees work. Watson helps companies bridge the knowledge gap in several ways:
It mines for deep technical expertise
Watson uses the power of the cloud to work its way through many kinds of documents, digesting and distilling information from them into a rich database of deep technical knowledge. Because it has already been trained in the industry-specific concepts that its customers need, it understands the information that it is consuming, making queries easier and answers more relevant.
It unlocks intangible knowledge
The tangible knowledge in any company is just the tip of a vast, invisible iceberg. Much of the intellectual property lies locked away inside the heads of engineers, or buried in intricate technical documents. Watson helps companies to recover their 'unknown unknowns,' finding this information and making it retrievable by others in the company.
It provides new insights and perspectives
Watson is more than just a simple search engine. Instead of blindly relying on keywords, it understands the concepts employees are searching for. This enables it to see connections in business and technical knowledge that human employees may miss. Watson's deep insight enables it to apply solutions for one problem to another, unrelated problem.
It shares knowledge across the organization
By centralizing knowledge from around the company, Watson makes it possible to share solutions and insights between different stakeholders that may otherwise never have connected. It digests employee experience in one region, delivering that experience and know-how to employees in other parts of the company. It also spans the age gap, giving newer employees access to an untapped wealth of experience gathered over the years by senior workers.
It leaves you in control
Sharing needn't compromise security. Watson's automation leaves your company in the driving seat. It applies enterprise-grade data governance tools and techniques to your data, enabling you to decide what to share and what to keep private. This delivers deep insight without compromising on competitiveness or compliance
It supports existing tools and workflows
Watson empowers your employees by working around them, rather than the other way around. Watson services can embed directly into your organization's workflows so that employees can draw on its insights when and where they need them. IBM has worked with leading industry partners such as SAP, Salesforce and Box to integrate Watson directly into their technologies. This enables it to support your existing processes with minimal disruption.
It frees up time with frictionless interactions
Watson's human-centric interface uses natural language processing to interpret questions, making it easy for employees to draw on its knowledge while staying focused on their tasks. This enables them to focus on their work and complete tasks more quickly with more experience and insight at their disposal than ever before.
Taking the First Step
Businesses don't need massive consumer- generated data sets at their disposal to benefit from Watson's capabilities. Watson can apply its AI algorithms to smaller sets of proprietary enterprise information and can find new insights to help employees think about their work in new ways.
By starting small, companies can learn quickly about how to unlock the value in subsets of their business data. From there, they can apply their experience with Watson to more data in other parts of the company, transforming business as they go.
Companies will continue to invest in people as they seek to improve performance in their chosen markets. For the first time, AI can empower and enhance those people by distilling and sharing knowledge between them all.
Watson is not only a viable way to bridge the talent gap, but a valuable tool for your existing workforce. By unlocking the hidden knowledge in your company, it empowers your newer recruits to learn more, faster.