99 Industry  99 IssuesNews

By Johnny Yu

We are living through a time of profound change, one where technological development is forcing us to question what our place will be in the world—and what role humans will play in the workplace of the future. Business leaders are concerned about the impact of a more digitalized world on their relationship with stakeholders. Workers (even the white collar ones) are nervous about the wider adoption of automation and artificial intelligence (AI) in their industries and its expected disruptions to the conventional workforce that is engaged in predictable and repetitive tasks.

“The workplace model is changing fundamentally by the adoption and proliferation of automation and AI.”

It is hard to know for sure what the future workplace model will be. Automation and the advent of AI bring the promise of increased efficiency, productivity, and profitability within reach, if business leaders can work out how to best access their potential. But where do humans fit in, now that we have arrived at the stage where machines can think—the one thing that set us apart from every other creature on our planet? For example, computers far outstrip humans when it comes to analyzing vast quantities of raw data. However, it requires intuition, empathy, and creativity to make sense of the data. Together, man and machines can generate more value for business than either alone, provided that an optimum balance can be achieved within the organizations.

Businesses need people with the appropriate skillsets to grow. In China, key growth sectors can only thrive if the talent strategy fits the country’s new direction—developing the new economy powered by innovation, technology, and entrepreneurship, and solving complex problems currently confronting the economy. The labor market is facing a mismatch of skills demand and supply. Unemployment is evident among college graduates and migrant workers, but companies are still finding it hard to recruit people.

According to PwC’s 20th CEO Survey – China report, while 59 percent of CEOs in China expect to increase their headcount over the next 12 months, 85 percent are worried about the availability of key skills. The challenge is to recruit people with the qualities required to stimulate innovation. CEOs told us that the skills they consider most important and the hardest to find are those that cannot be performed by machines: creativity and innovation, adaptability, emotional intelligence, and leadership.

Business leaders foresee structural changes in the workforce in the next two decades due to the extensive development of robotics, big data and AI. What then is the most suitable people strategy for businesses in a world where humans and machines work alongside each other? It is going to be a huge challenge to get it right, so organizations should plan for multiple scenarios to prepare for a future where no outcome can safely be dismissed as unlikely.

52 percent of global CEOs (compared to 38 percent in China) are presently exploring the benefits of humans and machines working together. 39 percent of global CEOs (compared to 42 percent in China) are considering the impact of AI on future skills needs.

PwC's 20th CEO Survey reveals key skills that are in high demand for companies in China, including creativity and leadershipSource: PwC

Business leaders need to have a clear view of how the development of automation and AI will impact the requirements and relevance of various human skills in the future. It is also imperative that they think critically about worker displacement, and do more to offer retraining, reskilling and retooling to offset the longer term social and economic consequences. What strategies do you have in place to address the skills crunch and to compete for the best talent?

Business leaders are promoting diversity and inclusiveness, seeking the best talent regardless of demographics or geography, and moving the employees to where they are needed—but these methods are not new. In 2014, 93 percent of global CEOs said they recognized the need to make a change to their strategy for attracting and retaining talent, but a staggering 61 percent were yet to take the first step.[1] Today, 78 percent of global CEOs (compared to 65 percent in China) have changed their talent strategies to reflect the skills and employment structures their companies will require in the future, and improve their access to talent and attract the people they need.

A greater percentage of CEOs in China report considering the impact of AI on future skills needs, but lag global trends in other areas. Source: PwC

What is the role of your HR function in the recruitment challenge? With a few exceptions, their level of concern has steadily risen year on year since we began our annual CEO surveys 20 years ago. In 2015, 64 percent of global CEOs felt that HR was unprepared for transformational change and that doubt still lingers. This year, 70 percent of global CEOs (compared to 42 percent in China) said they are rethinking the HR function. The challenge for today’s HR is to use the full range of its expertise and tools to identify skills gaps, anticipate needs, spot potential and build the workforce of the future. Innovation-creating skills can be encouraged through the right training and development, the right environment and culture, and the right performance approach. HR can lead the way in promoting and executing the change, and help “find” the employees with the right skills within the organization.

Business leaders today have to urgently address the consequences of globalization and technology while capitalizing on the opportunities they bring. The workplace model is changing fundamentally by the adoption and proliferation of automation and AI. Business leaders need to have a clear vision on how to recruit, nurture and retrain human skills such that man and machine can add more value together. The HR function needs to evolve with the times so that they can guide their leaders to succeed in the talent challenge by retooling people so that they are fit for the future.


[1] PwC, 17th Annual Global CEO Survey (2014).

Johnny Yu is the PwC China and Hong Kong People & Organisation Management Consulting Leader and Transformation Leader