This article was first published on hrone.lu
By Virginie Laye, Senior Manager, PwC Luxembourg
This year has been (and still is) a big challenge for everyone, Covid-19 has heavily impacted the economy in Europe, even if Luxembourg has a solid economy, it has suffered as well.
Employment is being and will be very touched, there is a transformation of the ways of working, remoteability is the new normal and it’s here to stay. The transformations we were already experiencing have been extremely accelerated without prior notice due to the very sudden crisis.
There are plans for heavy layoffs in the most affected sectors, tourism in general as well as connected industries (e.g. air transport)… We also have sectors that are less affected, such as the financial sector in Luxembourg.
We have a forced acceleration of the implementation of technology as a common platform, everything that helps to manage remotely or to a lesser extent autonomously.
We also have a declared desire for independence and the relocation of certain so-called strategic productions, in the medical field, in food…
Europe needs to invest in its workforce, it has been reinforced by the Council of Europe during its last communication, emphasizing the need to invest in Upskilling and Reskilling to support the economic recovery and social cohesion. Europe bets on better aligning the skills and competences of the workers with the current and future labour market needs. This is a huge opportunity to empower people of all ages to prepare for and contribute to a competitive European industry, able to remain relevant and further grow in adapting, at speed, to radical changes.
Many countries have already taken a similar route: India started some years ago with the aim of creating a skilled workforce of 500 million people by 2022. Skills Norway, under the Norwegian Ministry of Education and Research is working to ensure education and training of the citizens. Singapore is running a movement called Skills Future, to provide Singaporeans with opportunities to develop their potential.
It is not a matter of joining or not the movement, it is a matter for every government to reflect on when to join, as there is no doubt the topic will become a burning platform for every country in the coming months and years.
On another note, it is also on the to-do list of companies to first understand the evolution of their business thus also of their roles and how these change and will look like in the future. Secondly, it is highly important for them to also identify and be aware of the current competencies of their employees and the skills set required for these jobs of the future, to allow direct training on the new required competencies and have employees accordingly skilled. This up-/reskilling process reduces the costs of firing and hiring new employees, promoting at the same time talent retention.
Looking at an example in the Luxembourg market, the average cost across the sectors of hiring a new employee versus upskilling can save you around 80.000€ per employee, in the case of firing versus upskilling, it goes up to 170.000€. It makes a big difference when talking about hundreds of employees.
There is certainly a shift of mindset to happen here.
The organizations participating in Upskilling programs have already experienced major benefits: having a stronger corporate culture, greater innovation mindset, and higher workforce productivity. This is a reality-proved and socially responsible way towards growth for everyone.
Also, people are willing to improve their skills, they consider upskilling as part of their responsibility, 77% of adults would learn new skills now or completely retrain to improve their future employability, according with PwC survey “Upskilling Hopes & Fears”, from September 2019.
Upskilling is a topic on which companies, governments and individuals can work together. It is a win-win-win relationship that will make us stronger to maintain the competitiveness and resilience of the Luxembourg labour market.