Once dismissed by serious businesspeople as mushy nice-to-haves, so-called “soft skills”—critical thinking, problem solving, communication, leadership, adaptability and emotional intelligence—are in high demand and short supply.
Now more appropriately referred to as “power skills,” a term coined by Dartmouth University president Philip Hanlon, these abilities tend to be less tangible and are often correlated with the personality traits that determine the way we act and interact with others.
The labor market is increasingly rewarding interpersonal skills. In the past three decades, jobs requiring high levels of social interaction grew by nearly 12 percentage points as a share of the United States labor force. Jobs requiring fewer social skills, including many STEM (science, technology, engineering and math) occupations shrank by 3.3 percentage points. Recent studies from Harvard and Stanford reveal that jobs with high social skill requirements have experienced greater wage growth than others.
Critical Thinking and Creativity
Power skills are not new to insurance, an industry that thrives on attracting and retaining clients and the ability to solve problems. But three trends are driving an increase in their demand.
The nature of work is rapidly changing. Study after study shows that millions of jobs are at risk of becoming automated. Artificial intelligence and other forms of technology will significantly transform the industry in the next three years. Chatbots are increasingly capable of handling routine client service functions from quoting to claims. According to Lemonade, its “AI Jim” can process a claim 316,800 times faster than the top-ranked insurer’s claims department. Similar technology will be adopted for managing simple commercial claims.
With machines capable of doing more routine service functions as well as sophisticated data analytics, smart organizations are reassessing what they look for in the people they hire. Technical knowledge, industry certifications and on-the-job experience aren’t enough. Billionaire entrepreneur Mark Cuban predicted in a recent Money magazine interview that “a liberal arts degree in philosophy will be worth more than a traditional programming degree.” Cuban’s belief is that AI and automation will transform the job market so much that degrees that teach how to think in a big-picture way and to collaborate more effectively with our colleagues will become more prized.
Increasingly, people are valued based on their ability to do what machines can’t do. Machines can produce and interpret data, but only humans have the critical thinking and creative skills to find ways to apply the data to gain a competitive advantage. Only people have the ability to simulate real human interaction. Reading the minds of others and reacting, interpreting social cues, adapting and playing off each other’s strengths are skills that have evolved in humans over thousands of years. The ability to manage these interactions is at the heart of power skills and humans’ advantage over machines.
The pressure to innovate is intense. With more than $2.5 billion invested in insurtech over the past 18 months, innovation is the word of the day. As technology facilitates new ways of doing business and enables insurance buyers to assume greater control, traditional companies are striving to remain relevant and at the forefront of superior customer experience. Meaningful innovation, not just increased efficiency, requires people with power skills that include deep empathy for the customer experience, the ability to think creatively and critically, the flexibility to adapt to new realities and the interpersonal skills to work effectively across department lines to accomplish difficult tasks.
The workforce’s expectations of leadership are changing. Projections indicate that within the next two years millennials and Generation Zers will comprise more than half the workforce. They are more educated, based on undergraduate and advanced degrees, than previous generations, and in many ways they view the business world differently. A company’s culture and reputation for social responsibility, equality, inclusivity and diversity in management are major drivers in choosing a place to work.
These young professionals have little regard for hierarchies and traditional forms of authority. They expect equal access to information and to be involved in company decision making, including how, when and where they work. They anticipate their jobs will be collaborative, interesting and challenging with continuous opportunities for growth.
Millennials and Gen Zers place a high value on the human element at work. They want to feel like they belong, to feel valued and to work in a supportive, culturally compatible environment. According to a 2018 study conducted by Rainmaker Thinking, a firm that monitors the impact of generational change in the workplace, “supportive leadership” and “positive relationships at work” rank as Gen Zers’ top two most important considerations in accepting a job.
In a different job market, leaders had the luxury of expecting employees to adapt to the prevailing corporate culture. Given the high demand for quality people and a limited talent pool, the pressure is on leaders to adjust. That means beefing up key power skills, such as communication, flexibility and emotional intelligence.
Building Power Skills
From small businesses to major corporations, companies are finding it increasingly difficult to hire applicants who can communicate clearly, problem solve, take initiative and get along with co-workers. According to an Adecco Staffing study, nearly half of executives believe that workers lack the power skills necessary to help a business succeed.
Part of the problem is basic power skills are assumed. People figure that, by the time you reach the workplace, you’ve learned to get along with others, be part of a team, communicate your ideas, write clearly and solve problems. Once you enter the business world, especially in a field like insurance, technical training is a necessity, and management and leadership training tends to focus on more advanced skills (while assuming the foundational skills are already in place).
Colleges and universities are rushing to fill the skills gap, but businesses can’t afford to wait. They need the skills now, and the payoff can be significant. An MIT Sloan study found that power skills training in problem solving, communication and decision making yielded a 250% ROI in eight months. Success factors included an overall boost in worker productivity, faster turnaround on complex tasks, and improved employee attendance. A Harvard, Boston University and University of Michigan study showed that training on power skills that included problem solving, self-awareness and interpersonal communication produced real results on metrics such as productivity and retention. The ROI on the skills training was 256%.
Power skills are essential to the way we work today and closely tied to a company’s success. It’s time for power skills to stand shoulder to shoulder with technical skills in every organization’s training and development efforts.
Paterson is executive coach and president of CIM. email@example.com