Technological progress is enabling machines to makes them particularly suitable for automation complete many of the tasks that once required or digitization. human beings. That new automation revolution will have a major effect on employment in the Our analysis suggests that 39 to 58 percent of the coming years. Nearly every job will change, many worldwide work activities in operationally intensive quite profoundly, and the overwhelming majority sectors could be automated using currently of today’s employees will need to develop new demonstrated technologies. That is 1.3 times the skills. Preparing for the future of work is one of the automation potential of activities in other sectors defining business problems of our time—yet it is one (Exhibit 1). that most organizations are not ready to address. Beyond the scale of the coming changes in work- The transition to the automation revolution has place roles and activities, what matters most is the been accelerated by the COVID-19 pandemic. nature of those changes. Increasing automation will Companies are emerging from the crisis into a world significantly shift the skill profiles of tomorrow’s jobs. of workplace physical distancing and major changes That has implications for employers and employees in customer behaviors and preferences. Recovery is alike. Companies will need people with the right skills forcing organizations to reimagine their operations to develop, manage, and maintain their automated for the next normal. Manufacturing companies equipment and digital processes and to do the jobs are reconfiguring their supply chains and their that machines cannot. Workers will need the skills production lines. Service organizations are adapting that enable them to access employment. to emphasize digital-first customer journeys and contactless operations. Those changes will In Europe and the United States, for example, have significant effects on the requirements for demand for physical and manual skills in repeatable workforce skills and capabilities, from a dramatic and predictable tasks is expected to decline by increase in home-based and remote working to a nearly 30 percent over the next decade, while need for shop-floor personnel to master new tools demand for basic literacy and numeracy skills and newly urgent health and safety requirements. would fall by almost 20 percent. In contrast, the demand for technological skills (both coding and The future of work will require two types of changes especially interacting with technology) is expected across the workforce: upskilling, in which staff to rise by more than 50 percent, and the need for gain new skills to help in their current roles, and complex cognitive skills is set to increase by one- reskilling, in which staff need the capabilities third. Demand for high-level social and emotional to take on different or entirely new roles. Our skills, such as initiative taking, leadership, and research suggests that the reskilling challenge entrepreneurship, is also expected to rise by more will be particularly acute in operationally intensive than 30 percent (Exhibit 2). sectors, such as manufacturing, transportation, and retail, and operations-aligned occupations, such as maintenance, claim processing, and warehouse Leaders are unprepared 1 order picking. Those sectors and occupations will In operationally intensive sectors, leaders recognize experience a magnitude of change greater than the that automation and digitization will likely create global average because they often employ large significant skill gaps, but most report feeling numbers of people and because the predictable unprepared for the challenge. In a 2017 McKinsey and repetitive nature of many operational tasks 1 To investigate the impact of automation on operationally intensive activities, we looked at specific sectors and occupations. Operationally intensive sectors include construction, finance and insurance, food service and accommodation, manufacturing, mining, oil and gas, retail, transportation, utilities, and wholesale trade. Operations-aligned occupations include facilities management, frontline customer service and sales, frontline equipment repair and installation, frontline production, frontline trade work, logistics transportation and warehousing, order and claim processing, procurement, and skilled operations work. Building the vital skills for the future of work in operations 67