In a world where the Fourth Industrial Revolution is rapidly altering the landscape of labour markets, understanding the nuances of skill demand and remuneration becomes pivotal for organisations. Citi, in collaboration with the London School of Economics and the Oxford Martin School, has unveiled its latest Global Perspectives & Solutions (Citi GPS) report, titled ‘SKILLS THAT PAY – The Returns from Specific Skills as Demanded in Job Adverts.’ The report, which meticulously analyses data from job advertisements, seeks to explore the dynamics of skill demand and how the wages attributed to these skills are fluctuating.
Dr Grace Lordan, Director of The Inclusion Initiative at LSE, underscores the significance of comprehending the demand and reward for skills amidst the swift changes in labour markets. She notes, “Hiring has evolved from very specific education and experience criteria towards detailed skills requirements.” A notable trend is the burgeoning demand for soft skills, including inclusive leadership, with innovative methods being deployed to assess these skills during the hiring process.
The report underscores the escalating importance of collaborative leadership over time, both in terms of demand and hourly wages. Previous research indicates that occupations necessitating such skills are less prone to automation. Furthermore, collaborative leadership not only directly enhances individual and company performance but also indirectly does so by nurturing an inclusive environment.
Continuous Learning and Upskilling: Imperative in the Ever-Evolving Data Science Sector
Helen Krause, Managing Director and Head of Data Science at Citi Global Insights, highlights the perpetual evolution of technology and, consequently, the continuous shift in demanded skill sets. She states, “Technology is constantly evolving and hence demanding an evolving skill set.” This underscores the paramount importance of continuous learning and upskilling, particularly for professional data scientists, as certain data science skills may attract a wage premium in one period and lose it in the subsequent one.
The report also identifies a complementarity between soft skills and cognitive skills, specifically between collaborative leadership and research skills. This aligns with previous research that spotlighted the interaction between social and cognitive skills and emphasized that non-linear thinking is pivotal for the future of work. Professionals not only require soft skills but also need to comprehend the implications of numerical calculations.
AI Skills: A Surge in Demand and a Global Quest for Talent
Diving into the realm of Artificial Intelligence (AI), the report bifurcates AI job data into two categories: Tech-AI jobs, which pertain to the technological skills necessary to “run, train and test” AI models, and Broad-AI jobs, which necessitate an understanding of AI technologies without the “hard” tech-skills found in Tech-AI jobs. Since 2015, there has been a fivefold increase in the demand for these groups as a percentage of all U.S. jobs. On a global scale, the number of AI jobs advertised has surged ninefold for Tech-AI jobs and over elevenfold for Broad-AI jobs, while IT sector jobs have nearly quadrupled, and the total number of jobs advertised has almost tripled.
Pantelis Koutroumpis, Director of the Programme on Technological and Economic Change at the Oxford Martin School, points out that the supply of these sought-after professionals is unevenly distributed across the U.S., with California alone hosting nearly a third of the country’s total. He states, “With some states having more than 10 job ads per AI professional, wage implications are also important, making the quest for talent a global endeavour that builds on remote and hybrid arrangements.”
Valuable Insights for Hiring, Planning, and Investment Strategies
The findings of the report illuminate the skills that hold value in the current labour market, offering crucial information that can aid firms in hiring, planning, training, and upskilling workers for daily tasks. Moreover, it can assist companies in attracting and retaining talent by providing insights into the volatility of prices for specific skills.
In addition, the report furnishes a fresh perspective for investors, enabling them to analyse the skills being sought by a company they are considering investing in. This allows them to determine whether the company is pursuing skills that are most pertinent in today’s economy for a specific occupation, serving as a pulse point for their innovation and future readiness.
The digital copy of the report is available here.