With the rise of machine learning and artificial intelligence, businesses across sectors are becoming automated. A McKinsey Global survey found that 80 percent of organizations surveyed have begun a digital transformation in the past five years. Whether a steel mill beginning to monitor operations using AI, or a retail bank shifting a number of operations to its revamped website, the imperative to become a digital organization is ever present.
In fact, as many as half of current work activities have the potential to be automated by 2055, according to McKinsey Global Institute research. Additionally, over half of the job activities that currently exist today are projected to no longer be needed in 2055. The effect of that shift is estimated to be a 24 percent rise in hours spent by U.S. and European workers on soft skills.
These soft skills—non-technical skills necessary within organizations—are much harder to replicate via automation and AI, and they are at the core of this rapidly impending shift. While we’ll discuss soft skills in greater detail in our next post, our research underscores the importance of both developing and rewarding for them in the immediate future.
Companies should encourage employees to acquire new skills—both hard and soft—but it’s also key that employees be rewarded in the job market for these efforts. This raises the question: Are employers rewarding hard and soft skills at the same level, or are employees implicitly pushed to learn one or the other based on the disproportionate return on investment?
We examined 10.2 million job postings from 2017-2019 to analyze how return on skills has shifted. These postings were parsed by the skills required for the job in question, and each position came with a projected salary. We included two skills in each “bucket” to compare ROI:
- For hard skills, we focused on Python—a comparatively newer, popular programming language used by many data scientists—and C++—an older, but quite useful, programming language for many businesses.
- For soft skills, we focused on communication and teamwork, two perennial skills useful for most jobs.
The figure above shows the range of salaries commanded by these different skills. Three interesting patterns immediately emerge:
- Results are relatively consistent for hard skills vs. soft skills, indicating some degree of reliability in the results.
- The mean return for hard skills is over 2x higher than for soft skills: $79,183 compared to $39,661, respectively.
- This vast difference in return is only increasing, as jobs requiring Python or C++ have seen a nearly 12 percent increase in salary commanded from 2018 to 2019, whereas salary has stayed relatively flat for jobs requiring communication and teamwork.
These results point to a potential problem. The narrative around the importance of soft skills is only building. Indeed, the skills outlook from the World Economic Forum shows several of the top 10 growing skills to be soft skills, including creativity and emotional intelligence. However, if such skills are not rewarded in proportion to their purported value, then top talent will not be incentivized to focus on them, choosing instead to invest additional time acquiring hard skills.
Bringing the full range of human skills to the workplace—empathy, communication ability, leadership, compassion—requires that these skills be rewarded in accordance with their value. Otherwise, as much as leaders proclaim the value of soft skills, the focus will be on what is actually rewarded. It will only benefit organizations to accurately track—and effectively reward—soft skills; otherwise the soft skill shortage will remain, and perhaps grow, in the coming years.
Are you compelled to take action? Keep watch for our upcoming post that will discuss soft skills in more depth, including how companies can ensure that they’re developed and rewarded throughout their organization.