This article is sponsored by Sanne
The drive to embrace emerging technologies to provide investors and stakeholders with a smoother client experience; reduced friction accessing data or capital; and increased transparency had been gathering pace even before the acceleration provided by the current covid-19 pandemic.
According to the World Economic Forum Future of Jobs Report 2020, up to 85 million jobs could be lost globally across all industries by 2025 due to the shift in labor between humans and machines. From the top 10 jobs that are predicted to be most impacted, it will probably come as no surprise that seven could be linked to supporting the real estate investment industry. These include:
- Data entry clerks
- Administrative and executive secretaries
- Accounting, book-keeping and payroll clerks
- Accountants and auditors
- Business services and administration managers
- Client information and customer service workers
- General and operations managers
One would also not be too presumptuous to assume that the real estate investment sector might therefore experience a higher-than-average relative impact than the overall workforce. This is representative of the overall financial services industry, where around 50 percent of respondents to the WEF survey expected to reduce staff due to technology or automation to achieve growth plans. This is no surprise given the drive to transform the alternative investment sector and broader process-driven clerical roles that are primed for automation and transformation.
It might not be expected that 38.1 percent of respondents in the financial services industry expected to increase their workforce due to technology or automation in order to achieve growth plans. This was accompanied by 38 percent also expecting to increase the use of contract staff due to technology or automation. Interestingly, the survey overall predicts that potentially 97 million new roles will be created by 2025.
The implications for real estate
The answer to why jobs overall will increase lies in how new digital technologies are adopted and, more widely, the impact of digital transformation on value chains and operating models. They are often “human-centric,” which drives a need for higher emotional intelligence-based skills rather than process or computation skills. You cannot automate these skills… yet.
Digital is about data-rich, high-touch, high-micro personalized experiences or services which we have come to expect from the latest app or digital service. We should not expect anything less in real estate.
The sort of roles and skills which respondents thought would drive this new world are focused on data, digital and emerging technologies. So how can we apply these to our sector?
While some businesses may already have some of these roles and capabilities, digital transformation is going to drive a significant expansion of these roles far beyond the current remit of technology teams that have historically been banished to the back office. We will need digitally literate, highly analytical, innovative individuals who harbor the deep sector expertise investors and stakeholders have come to expect.
This is not an easy task. There remains a massive skills gap – the highest perceived barrier to adoption of new technologies in financial services. And to make matters tricky, the third-highest barrier to adoption was a skills gap amongst the organization’s leadership teams.
Recruiting from other sectors or improved education will be part of the solution, but these individuals lack industry experience and are not accessible in this timeframe. Consequently, addressing this skills gap is key to achieving the level of rapid wholesale transformation which is being targeted.
Bridging the gap
If we consider the top 10 skills for 2025 and we compare those to skills common within the job types that will be most impacted in the financial services sector, we quickly see that a number of core skills are common. They might need to be realigned to a different role, but they do not need to be completely relearned.
As businesses embark on their digital transformation, planning this re-skilling is key to the success of the program. Starting this process early, or pre-empting this before a full-scale transformation is commenced, will reduce friction in the transformation process and yield faster and better results as teams understand the change and possible new roles from the outset.
The key is to remove the mindset of “I will lose my job if we automate,” as this simply does not have to be the case. The first step is to map the expected roles and their skills to your existing role profiles in order to determine training needs.
“As businesses embark on their digital transformation, planning the re-skilling [of their teams] is key to the success of the program”
Turning practice into reality
The level of the new skills will depend on the new role and stage within the digital transformation. Senior roles often require less detail as they rely on the traditional managerial and strategic skills but, as noted above, insufficient knowledge at this level can hamper adoption and possibly growth. The survey predicted that over 57 percent of new financial services jobs will be retrained within six months, with over 25 percent taking less than a month. Respondents overall also noted that over 66 percent of reskilling pays back within a year.
There are a multitude of learning options available depending on the learning style of the individual and circumstances. Virtual classrooms and online learning were already mainstream but have become the norm during the pandemic, and bite-sized learnings managed around BAU can support a balanced learning structure rather than long periods out of the office. These new learning styles also support on-the-job and on-demand learning during a transformation as well as accommodating a move to agile flexible working practices and the continuous development required as businesses move to become digital.
Specialist skills and the gig economy
As our businesses become more agile and transformations progress through different stages with varying skill set requirements, the flexibility and benefit of a contract-based workforce is clear for businesses. Enabling access to specialist skills as required is essential when using emerging or advanced technology.
It also provides an opportunity for the workforce: individuals (or groups) with specialist skills will form and focus on their chosen passion and expertise. Given the niche nature of our industry, some specialties may be best served from these individuals or groups rather than retained in house. In many cases, this flexible working arrangement and lifestyle is also targeted by an increasing proportion of the workforce, which is now beyond solely the millennial nomad.
The industry as a whole is currently looking both inwards and outwards to understand how it can transform in a digital world, and there is no doubt that this will have a transformational impact on the workforce. It is this workforce, however, which is needed to enable our transformation. By providing positive value-adding reskilling opportunities that support the case for digital transformation, a potential skills gap can be addressed and converted from a weakness and threat into an opportunity.