Article: Are skills becoming more important than salary?

Skilling

Are skills becoming more important than salary?

A recent World Economic Forum report notes that young candidates across ASEAN member states might be preferring skill development over higher salaries.
Are skills becoming more important than salary?

Markets across Southeast Asia are changing. And rapidly. Digital technologies are fast replacing old ways of working and business across the region are slowly waking to the need to adopt many such technologies to remain competitive in the global market. Countries like Singapore and Malaysia have already begun extensively relying on such technologies while companies in Thailand and Indonesia are following the suit too. Propelled by both global shifts and ever-growing population of digital natives—people connected through the internet, in which the region is noted to have one of the fasted growing population— countries across southeast Asia have begun realizing the potential of digital technologies.

A new study by Cisco shows that companies in Southeast Asia are confident in their digital future, compared to the rest of the Asia-Pacific region. Almost all (94%) Southeast Asian companies think that their digital readiness will help them stay competitive, with a similar number (93%) prepared to adopt new technologies to accelerate their digital transformation. Despite overall confidence levels in Southeast Asia, almost a fifth (19%) of large firms – that is, those with more than 10,000 employees – showed less confidence to adopt relevant technologies, compared with 7% of smaller firms. Top technologies expected to shape the digital future of businesses in Southeast Asia are cloud, cybersecurity, big data and analytics, and automation

 But such growing familiarity might not necessarily directly translate into more profitable ventures or access to newer markets. Although digitalization opens up a host newer avenues for companies to build better products for their customer, a lot is riding on how effectively talent within the region can be grown and developed to meet such skill needs.

Talent considerations

The Cisco report mentioned earlier noted that although the awareness of digital technologies among companies in southeast Asia has remained high, adoption rates have failed to keep up. One of the important reason for this—over 43 percent of IT leaders interviewed for the study highlighted this cause—was the lack of proper talent. 

As is the case with economic transition, Industry 4.0 promises to be of great value but it depends on how effectively and rapidly can people adapt to such changes. This means adopting newer skills and keeping a tab of changes within the job market. But such mechanisms often run into systemic barriers and often one time solutions towards addressing such gaps prove to be ineffective.

Young candidates across the region reflect this rising need and rate skill-building higher than compensation considerations. In a  WEF survey of 56,000 ASEAN citizens aged between 15 and 35, some nine percent of respondents say their current skills are already outdated, while 52 percent believe they must “update their skills constantly.” Only 18 percent believe their current skills will stay relevant for most of their lives.

The WEF report noted that concerns about skills are reflected in the candidates' attitude towards jobs. ASEAN youths say the number one reason they change jobs is to learn new skills – the desire to earn a higher income comes second. The survey showed over 81percent of ASEAN youths believe internships are either equally important or more important than school education. Also, over half are keen to spend time working overseas in the next three years, probably to gain new skills, with a significant portion wanting to work in another ASEAN country.

With outcomes uncertain, learning to become continuous

“It is impossible to predict how technology will change the future of work,” said Justin Wood, Head of the Asia Pacific and Member of the Executive Committee at the World Economic Forum. “The only certainty is that job markets face accelerating disruption, where the lifespan of many skills is shortening. It is encouraging that ASEAN youths are aware of these challenges and show a deep commitment to lifelong, ongoing learning.”

Both corporate and public skill-building programs have begun reflecting this need. The concept of a life long learner has greatly shaped how learning and development programs are built and executed within companies.

Countries within the ASEAN group have also decided to step up their efforts towards equipping their workforce with the right skills. With both private and public players playing an active role in enabling the working population to reskill, the region has seen a spurt in skill-building initiatives. For example, the World Economic Forum announced its ‘Digital ASEAN’ initiative that aimed to aims to train by 2020 some 20 million people in South-East Asia, especially those working in small- and medium-sized enterprises. It also sought to supplement such goals by inducing monetary support by raising $2 Mn in contributions to provide scholarships for STEM students within ASEAN and aiming to ensure an additional 200,000 digital workers are hired across the region. With other big tech companies like Microsoft and IBM building an active interest in ensuring one of the largest working populations in the region is skilled to find jobs in an ever-increasing disruptive future, only time would show the efficacy of such initiatives. 

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Topics: Skilling, #SkillUp

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