Employees work at a digital spinning workshop of Jiangsu Dasheng Group in Nantong, Jiangsu Province of China
Employees work at a digital spinning workshop of Jiangsu Dasheng Group in Nantong, Jiangsu Province of China © VCG via Getty Images

Industrial companies across the world have faced a shortage of digital skills for years.

But, more recently, the coronavirus pandemic has sped up digitalisation, increased stresses on supply chains while also causing some to leave the workforce — a combination of factors that has turned a chronic problem into a near-crippling crisis.

In May 2020, in the early months of the pandemic, when McKinsey surveyed 60 global supply-chain executives, only 10 per cent of respondents said they had sufficient in-house digital skills. A year later, that figure dropped to 1 per cent.

Daniel Swan, a McKinsey manufacturing and supply chain expert, says there was a “clear recognition” among executives that addressing the digital skills gap was a priority even before the pandemic. Now, though, “it’s gone from number ten on the agenda to number three”.

The skillsets required vary from job to job. For example, where a maintenance mechanic would have previously fixed physical machinery, this role might instead now require someone to diagnose and fix a problem in an automated system through a computer.

The challenge is now to bridge this gap. “Everybody’s looking for the same talent right now, so you can’t just go and hire these people [externally],” says Swan. “No doubt about it — you’ve got to hire some — but people are going to have to train their existing workforce.”

According to Mary Ann Pacelli — an expert on workforce issues in the Manufacturing Extension Partnership, a government-backed agency in the US that supports manufacturing businesses — the biggest challenge of retraining for employers is accessing resources and funding. “If you’re out in the middle of a cornfield in the Midwest, you might not be near a college or company that can come in and train your workforce. And there’s a cost to it,” Pacelli says.

However, the Covid-19 crisis appears to have given employers more confidence in the value of virtual training, which can remove some of these access barriers. “The pandemic forced more people to have to do that and now we have companies asking for online training,” she explains.

In the UK, the Materials Processing Institute (MPI) research centre is taking virtual training one step further. It is piloting the use of augmented reality as a way to train staff as they work — and as a training tool that captures workers’ viewpoints when demonstrating tasks in situ. These videos can later be accessed by other employees in training when they put on their headsets.

“It’s being used as a training tool to get people up to speed in a safe and quick way through simulations in an immersive environment,” says Chris McDonald, chief executive of the MPI. “Another way is by providing additional information to engineers on site so, if they approach a piece of processing where there’s a problem, they can get additional information. Or experts back at base can be there with them, through the augmented reality, and that’s a sort of upskilling piece.”

Pacelli says that on-the-job training — whether achieved through digital technology like this or through standard face-to-face instruction — is a critical step in the journey to acquiring skills, but one that employers sometimes neglect.

While training from a school, college or programme might provide employees with hands-on experience as well as desk-based knowledge, to be truly beneficial, the application of that general knowledge needs to be taught in specific situations in the employees’ workplace when they return, she says. “Companies need to better understand their expectations of colleges and know what they have to do when that person gets back . . . That’s where a lot of training falls apart.”

If companies can successfully retrain their workforces, however, they will not just be staving off immediate staffing problems but helping to future-proof their businesses. Given the speed with which new technologies and digital developments are occurring, “it’s a life-long learning thing”, notes McDonald. “You can imagine that someone might need to make these sorts of transitions multiple times throughout their career . . . We have a skills environment that’s really geared around schools, but the balance will shift, we need to do more training on-the-job.”

According to McDonald: “This revolution is going to happen regardless, but Britain will be more successful and people’s lives will be better if we manage a just transition for workers.”

He has personal experience of industrial transition going “badly wrong” in his former mining community in Durham. “Hard-earned skills become obsolete overnight . . . The first industrial revolution raised living standards at the end of it but they fell during it, and we can see there’s a risk of the same thing happening again,” he argues.

“If we didn’t intervene and you ‘fast forward’ two generations, maybe people would get there eventually. But they’d have to go through a lot of turmoil in between. So why would we make that choice when we could help people through it?”

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