Within five years, 30% of current workforce skills will be obsolete. That is the reality facing multinational, market leading technology firm, Siemens – and no doubt other firms across the globe. Following extensive and in-depth work and job analysis carried out by the firm, it realized now was the time to rethink and invest in the skills needed for its future, and to support its workforce make the shift.

Its research is backed up the findings reported in The World Economic Forum’s latest Future of Jobs report. In it, the WEF concluded that 50% of all employees will need reskilling by 2025 as the adoption of technology increases. The challenge facing organizations is how best to identify those with transferable skills and knowledge to support a program of internal mobility and also develop the future skills required in the future.

For Siemens and its global workforce of 293,000 employees, the challenge is very real.

Establishing a Fund for the Future

Siemens knows that those skills needed in the future are scarce in the external hiring market and, as a firm, faces stiff competition for talent from other tech companies, car manufacturers and digital firms. However, it recognizes the strength and power of its current internal talent and its ability to pivot to acquire new skills.

In agreement with its Central Works Council in Germany, the firm chose to create a €100 million Fund for the Future in 2018. This fund was established to finance qualification and reskilling projects in Germany until the end of 2022 and is in addition to the company’s regular annual training and continuing education budget of around €500 million.

Assessments to Understand the Best Fit with Future Skills

Siemens has a strong track record in and commitment to understanding the skills, behaviors, preferences and motivators of its workforce, investing in psychometric assessments for many years. It also understands that, in such a large organization, it can be overwhelming for applicants to understand the opportunities for training and learning available. Siemens had developed some years ago an award-winning applicant assessment to help the candidate to understand how their own interests and skills matched with different training routes within the firm.

Building on that success, Siemens worked with Aon to bring together a new combination of fully mobile-enabled assessments of vocational interests and abilities, attitudes, learning styles, cognitive abilities as well as an indicator of ‘willingness to change’. The results from these assessments, together with the biographical information, pass through a complex matching algorithm developed by the Aon team.

The Qualifications Navigator

Once completed, the employee receives a report highlighting the top three best matches between their own interests and those identified as a future skill for Siemens. It also offers development action suggestions and ideas to acquire new skills. Armed with these top three suggestions, the employee is then able to request an in-depth feedback session with one of the Siemens Professional Education team.

From there, they may apply to join one of the 30 reskilling routes the firm has researched, sourced and will fund. These include undertaking courses such as a Bachelor’s degree in robotics, computer engineering or digital marketing, or qualifications to pursue a role in IT application development, as an industrial electrician or a process manager.

The Start of a New Chapter in Talent Mobility

This is a story not of employer-imposed learning, development and training, but an example of how employees are given access to tools to make informed choices about their career paths – and given the opportunity to study in new areas, acquire skills in new fields and learn how they can contribute to the   future success of the organization.

Siemens employees are seizing the opportunity to reassess where their interests and skills lie – and the investment in such employee support and development is inspiring. We expect other organizations will be following their lead.

A Challenge for All Sectors

While technology giant Siemens has facing this challenge right now, the future skills profile of all organizations should be under review.

Credit : AON Empower Results

Provident fund plans 3% initial contribution

For the compulsory provident fund plan structure employers and employees both are required to contribute 3% of their salaries and add up to 10% of their salaries by year 10, with the salary cap of 60,000 baht per month (approximately $ 1,714).

However, if an employee earns less than 10,000 baht per month (approximately $ 286), then the employer would be the only contributor. For the administration of the compulsory provident fund, no details have yet been confirmed about the person who will manage the investment.

The Fiscal Policy Office said the government is preparing to adopt the compulsory provident fund plan in 2018 for the first year, starting with companies with 100 or more employees, and then will gradually applying the plan to every company with one employee. Up to the 6th year of this law enforcement

3 ways to affect employers

Companies that already have private funds yay not require further contributions to the compulsory provident fund. But may need to consider adjusting existing plans to be in the same direction with details for the employer.

1. Current Provident Fund Structure

An employer who already has a provident fund plan, their current contribution structure should be re-examined. Especially cost analysis to understand the impact that will occur if the government increases the minimum rate of provident fund payments from 2% to 3% for funds operated by private companies. And it might be a good time for employers to consider a comprehensive corporate provident fund in terms of overall fund structure and investment strategy. To ensure that it is consistent with the various strategic goals of the organization.

2. Transition from a Defined Benefit Plan to a Defined Contribution Plan

Many companies in Thailand still use the defined benefit plans that prevent the company from knowing the expenses to the company until the benefits are paid upon retirement. And because the provident fund is compulsory defined contribution plans, the employer should consider the existing plan structure. And assess whether there should be an amendment or not to reduce the risk of costs that will increase.

Moreover, as with government agencies and non-governmental companies around the world, companies in Thailand should also consider modifications to their defined benefit plans. To be a defined contribution plan that is good or not This might be a good opportunity to consider if it hasn’t changed. Changing the plan may help the company reduce its long-term debt burden from the company book. As well as enabling the company to manage the income statement more accurately. And reduce the long-term risk of salary increase and return on investment.

3. Determining the Use of Compulsory Provident Funds in the Future

It is estimated that companies that do not have their provident funds, will have to implement this compulsory provident fund plan. On the other hand, a company that already has a provident fund, for them no action is required. While there is not much information on how compulsory provident funds can be implemented, companies need to reconsider their existing retirement benefit plans., including welfare regulations and supervision.

By Guy Vereecke, Managing Partner of Ahead (Belgium)

Never waste a good crisis: easier said than done? For some sectors such as aviation, tourism, hospitality, and the performing arts, it is difficult to see the COVID-19 crisis as anything other than a threat.  For others such as diagnostic labs, personal protective equipment manufacturers, food delivery services and providers of web-conferencing tools the crisis was a gold mine. There are also multiple examples of companies that reinvented themselves.

The impact of the crisis differs from sector to sector and from company to company.

In general, companies run into trouble because they miss important market trends or fail to respond to them accordingly, but external shocks, like the COVID-19 pandemic can accelerate them.

If from one day to another your customers are in lockdown and you can no longer sell your products or services, then a liquidity crisis is just around the corner.  Plenty of companies cannot survive a quarter without sales.

We may conclude that in a crisis, cash is king, but we like to add: equity is even more important. Why? Because equity will enable companies to secure financing.  In other words, the challenge for companies is that they need liquidity to survive in the short run, but in the long term, they need to boost their equity position, which requires profitability to be restored and strengthened.

To reinstate a healthy core, you will have to restructure.  Do it thoroughly: desperate times call for desperate measures.  It includes the elimination of excess capacity, cost savings, opening new markets … two recommendations: do it fast and lead by example.

Restructuring is an essential part of bouncing back, but not the full story.  Once you have protected your core and completed the first steps, it is important to go back to the basics of strategy development to regain profitability, which means answering the questions: “Who is our customer?” and “What do we provide?”; “What is our value proposition?” and “What is our operating model?”.

In a matter of months, you can add more sales channels, making the leap to digital, or even acquire a competitor.  Nevertheless, it is also important to take a longer-term perspective.

Several studies describe companies that managed not only to survive the financial crisis but flourished afterwards and found that they had absorptive agility.  Just like boxers, an exceptional breed of dogs, companies can be rated on agility and power of absorption.  Agile or adaptive companies spot and seize opportunities in the market, while absorptive companies are able to absorb shocks and survive crises.

How can companies become more agile? 

By making sure they consistently detect opportunities and act faster than their competitors, by analysing their product portfolio and shying away from reallocating resources to the more profitable activities.  Agile companies also need to build absorption capabilities, to be able to withstand shocks. Interestingly, the more agile companies tend to become, the more profit they generate and in doing so, they improve their absorption capabilities.

Agility and power of absorption are not mutually exclusive, but complementary and therefore companies should strive to excel in both, and build absorptive agility in order not only to survive a crisis, but to emerge as a leader.

Do not forget that your strategy should include all stakeholders and that business as usual is not an option when society and public opinion has changed following a crisis.

By Conor Harty, Managing Director at Harty  Virtual  HR  (Ireland)

No different to other countries, Ireland is experiencing the effect of the pandemic as an accelerant of the conversation around forms of work.  Two issues have emerged as potential for impact at several levels in the management of staff.  They are the right to disconnect and, a right to request remote working.  Both are framed under a desire for more attractive work/life balance.

It is acknowledged that we have lagged behind some other European countries on the idea of a right to disconnect.  This is now being addressed through a code of practice.  In legal terms this may not be highly enforceable in terms of sanctions against an employer, but not having a policy is embarrassing and disadvantageous if an organisation is asked to account for itself at a third party adjudication forum.

The other aspect to work life balance in 2021 is the right to request home working.  The government has laid down some markers which are going to make this something more than a hopeful request to be easily brushed aside.  Firstly, it has set a floor on the matter whereby non-frontline public sector workers may work outside of their place of work for 20% of their working time.  Secondly, it intends to support working from home (as one form of remote working) with some tax benefits.  Thirdly, it is recognising that working remotely is not just working from home, so it is supporting investment in work hubs to offer facilities closer to home and reducing commuting.

This could be viewed as a reversal of the normally centralising direction of mass movements of people that occurs with industrial and technological shifts.  The thrust of the legislation will be that employers will need to demonstrate reasonableness in refusing a request for remote working.  This may be difficult if they have kept their business open through the flexibility of staff who adopted remote working during the pandemic.  Future requests will no doubt seek that employers fund the cost of remote working, where this is carried out from a work hub.

Of equal interest will be the approach to managing people in this new era where it will be reasonable to request remote working.  Given that Ireland positions itself as a high value knowledge industry base providing access to the EU market, it has attracted staff from other countries in increasing numbers over the past two decades.  Many of these are on career journeys, be they citizens of the EU or beyond it.  Therefore, employers may be initiating a debate on remote working where such self-expatriated professionals wish to return to their native country, and remain in employment from there.  This may well accelerate the strategy of the work geographically following the talent, with highly-sought talent becoming even more borderless.   This quite a pivot from companies looking to off-shore low value tasks to now accepting the remote accessibility of globally scarce talent preferring to offshore itself.

At a more local level, talent strategies will need to take account of the changing circumstances; less so on hiring, but more on the development of staff who wish to work remotely as much as possible.  Talent professionals will also need to take account of the need to manage staff development and growth, if only to remain compliant with employment equality legislation.  There are ample opportunities for direct and indirect discrimination cases.  A careless stereotyping of staff who opt for remote working as not being career motivated could be costly as would a thought process develop in an organisation that only those who opt to base themselves at the traditional office location are favoured for career advancement.  Similarly, talent professionals need to ensure that managers take a whole view of the remote worker and prioritise their talent offering to support and develop staff.

This is not a time to revive and recast Atkinson’s model of the core and contingent workforce. Talent Managers will need to understand their target market of knowledge professionals as becoming more diverse in their career preferences and expectations – and respond with employer branding that emphasises trust and wellness.  Globally, remote working will open up great opportunities for organisations that view it as a positive shift in work/life balance.