Securing Talent in the Age of Job Polarization

Why is it that futurists and AI researchers are warning about technological unemployment, while I as a manager find it harder than ever to recruit? The answer is job polarization – let's take a deep dive to understand what's happening and how you can secure access to the competence your organization needs.

In recent years, alarm bells about technological development risking widespread unemployment have resurfaced. This is a familiar old ghost that I have written about before, but what's interesting this time is that it is primarily people who know a great deal about technology who are raising the alarm.

For my own part, I gained a pivotal insight when I moved to a rural area a few years ago.

The issue is not primarily about whether there will be more or fewer jobs in total. More important is that old jobs are disappearing everywhere, while new ones are arising almost exclusively in larger cities. And that there is a polarization occurring between, on the one hand, low-skilled and, on the other, high-skilled jobs.

In short, technological development and automation are nowadays primarily replacing traditional middle-class professions. During the 20th century, it was usually simple jobs that were replaced by machines. But today, when automation is more about new software than new machines, the development instead leads to accountants and radiologists losing their jobs.

When the jobs that disappear are qualified ones, it leads to the labor market becoming polarized. Previously you could see the labor market as a pyramid, with many simple jobs, somewhat fewer mid-level jobs, and a few truly high-skilled positions at the top. But now the entire structure is changing shape.

Instead of a pyramid, what emerges looks like an hourglass. The simple jobs at the bottom are still many. Certain professions and tasks disappear, but as long as the tasks are both tricky to automate and straightforward in terms of skill requirements, there are so many job seekers that automation struggles to be profitable.

At the top, the number of high-skilled jobs has increased – in particular the demand for competence in developing and maintaining software. But in the middle we find a new hourglass waist. Mid-level professions are decreasing in number, and since these jobs have often been desk jobs with relatively expensive employees, they are ideal candidates for replacement by software.

While you could previously start as an errand boy and end up as a director, it is now increasingly difficult to climb the ladder. Without mid-level jobs, there is no pathway to advance to the top. It is simply very difficult to be promoted from Uber driver to business developer.

To enter the group of high-skilled workers, you first need to obtain a university degree, which unfortunately shuts many people out – either because they lack the means or resources, or because they live in a place where it simply isn't possible.

This means we face both high unemployment and high skills shortages simultaneously, which is a major societal challenge. But what does it mean for you as a leader? How do you secure access to talent when there is fierce competition for the highly skilled workforce?

Here are three concrete pieces of advice:

- Distribute your organization

When all employers are competing for talent in major cities, it is a significant competitive advantage if your staff can work remotely, as you can then hire people in rural areas who have fewer offers to choose from. This is becoming increasingly common in the tech industry.

- Invest in internal training

If you can retrain your employees instead of replacing them, you help prevent a major societal challenge, but also avoid the fierce competition for ready-trained staff. How do you identify talent within your own ranks?

- Recruit for potential rather than knowledge

Five-year university degrees are a narrow bottleneck. If you have followed the previous advice, you already have the capacity to train staff internally. If you can then hire employees with great potential rather than already proven qualifications, you can save a great deal of time and money.

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Alfred Ruth

This post is written by entrepreneur, author, and speaker Alfred Ruth. Read more about automation and artificial intelligence on his blog.

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