Technology and training

Programs to help displaced employees learn new skills face a wide variety of challenges

Charles Wallace
6 June 2016

5 min read

As automation and technology replace more jobs in more industries, displaced workers are finding that the programs intended to help them retrain are riddled with gaps and inconsistencies. In some parts of the world, available training doesn’t match available jobs. In others, funding and accessibility are inadequate. Everywhere, however, the challenges – and the numbers of people in need of help – are poised to multiply exponentially.

Automation, artificial intelligence and robots are increasingly replacing workers in performing routine tasks. Just ask the travel agents who have been displaced by booking websites, assembly line workers replaced by websites, and the professional drivers whose jobs will soon be eliminated by autonomous vehicles. 

How bad will it be? According to one unpublished study quoted by the BBC in August 2015, the coming wave of technological breakthroughs endanger up to 47% of US employment. Y Combinator, an organization promoting the idea that every person on Earth should receive a minimum income, paints an even bleaker picture. “We think there could be a possibility where 95% — or a vast majority — of people won’t be able to contribute to the workforce,” said Matt Krisiloff, manager of Y Combinator’s basic income project. “We need to start preparing for that transformation.”

As the trend picks up speed, two burning questions face companies and governments alike: how to retrain displaced employees for new careers and how to ensure that workers who keep their jobs can update their skills throughout their working lifetime.

In the United States, for example, the federal government has two signature pieces of legislation aimed at helping out-of-work individuals: the 2015 Trade Adjustment Assistance Reauthorization Act, designed to assist employees who lost their jobs due to cheaper imported goods; and the Workforce Investment and Opportunity Act of 2014. Both programs provide financial assistance to train or retrain displaced workers. Because of overlapping jurisdictions, the burden of retraining employees laid off due to technology, however, falls largely on state and local governments, which receive financial support from the federal government.


The BBC reported in August 2015 that the coming wave of technological advances endangers nearly half of all US jobs.

“Retraining through our nation’s community colleges is a way to reduce the skills gaps” of at least some displaced workers and increase their earnings, Robert LaLonde of the University of Chicago and Daniel Sullivan of the Federal Reserve Bank of Chicago wrote in a recent paper about retraining. “Although workers may still experience significant earnings losses relative to their previous positions, training can be a socially desirable investment that can help trim these losses, and can have positive effects on their communities.”

Washington state, for example, on the northwest US coast, has what is known as a “workforce training and education coordinating board” that works with 34 community colleges and technical schools throughout the state. The students, who numbered nearly 11,000 last year, include laid-off workers learning new skills and employed workers receiving “upskilling” to move their careers to the next level, according to Kendra Hodgson, policy associate with the board.

“The bedrock mission is to educate people to a higher level of skill and knowledge,” Hodgson said, adding that businesses work with individual colleges to produce curricula that meet their staffing needs. For example, when local hospitals reported a severe shortage of nurses a decade ago, she said, a number of schools geared up to teach nursing until the shortages were addressed.


Europe has the most elaborate training opportunities, thanks to the region’s taxpayer-financed social welfare programs, which are more generous than those in North America and Asia. The European Union has set a target for at least 40% of its population aged 30-34 to be qualified to at least a university-level education by 2020, said Steven Bainbridge, vocational expert at the European Centre for the Development of Vocational Training, which is known by its French initials, CEDEFOP, and is based in Thessaloniki, Greece. He said that the EU will probably exceed its target.

“We’ve succeeded in raising the qualification levels but there is some debate about whether people are doing [retraining in] the right thing, because we still have shortages in science, technology, engineering and mathematics,” Bainbridge said. “On the other side, we’ve had a rise in people who are overqualified for their jobs.” One reason, he said, is that during the recent recession, when highly skilled workers were willing to take jobs below their skill levels, employers were in hiring mode.

Retraining adults who lost jobs due to automation is “another major problem we have,” Bainbridge said. Publicly funded training programs often are not linked to the labor markets to determine which skills are in greatest demand and then train displaced workers for those jobs.

As a result, some companies in Europe are taking measures into their own hands. Vattenfall, a leading Swedish electricity generator, set up an internal support organization for 445 laid-off workers and provided SKR 205 million (US$23.7 million; €21 million) to provide them with vocational training. The workers received a skills assessment; a tutor then created a specialized course of study for each worker.


One of the most elaborate training programs in Europe is Germany’s vocational program, which is tracked and measured by BIBB. BIBB sets standards for the country’s elaborate system of apprenticeships, a dual system of vocational high schools and universities working with companies for on-the-job training.

BIBB currently is drawing up plans for determining the job qualifications for Industry 4.0, also known as “hyperconnected industry” or the Industrial Internet of Things (IIoT), said Gert Zinke, a BIBB spokesman.

Retraining adults who lost jobs due to automation is a major challenge that is likely to grow. (Image © BraunS / iStock) 

“The new qualification requirements demand a comprehensive understanding of systems and processes, which are not now being addressed by the firms providing the training,” Zinke said. Since robots are doing much of the actual production work, jobs also will require employees to be skilled in topics that include robot maintenance and repairs, factory scheduling and operations planning. The new curricula should be finished, he said, within the next two years.

Many German companies, however, are already designing and building their machines for the IIoT and connecting existing machinery to the IIoT for predictive maintenance. 


Another issue being hotly debated involves ongoing training for workers to ensure their skills remain up to date, in the same way that airline pilots and specialist physicians are required to obtain yearly certification with the latest methods and technology. 

Till Leopold, project leader of the human skills initiative at the World Economic Forum in Switzerland, says more industries globally are requiring continuous recertification, but that others have yet to determine which skills updates to require.

“Some industries are ahead of the curve and some are struggling,” Leopold said. Determining requirements, he said, is best left to each industry because they know better than government regulators what skills are required. 

In Denmark, however, the government gives workers two weeks of training every year to ensure that their skills are up to date with global standards. In Asia, the government of Singapore, which is keen to preserve the nation’s reputation as an Asian hub of excellence, now gives workers a “SkillsFuture Qualification Award” of as much as Singapore $1,000 (US$750; €660) if they complete a job training course and receive a specialist diploma.


Increasingly, Leopold said, workers who still can’t find jobs are turning to hyperconnected businesses for contract work. These self-employment options include driving for on-demand car service Uber or working on a freelance basis for websites that match employers and workers for contract jobs in marketing, accounting, medical recordkeeping and other service-related fields. As a result, more employees are being held responsible for their own training.

Another trend, being reported mainly in the US and Europe, is a growing emphasis in education on outputs rather than inputs. In the future, he said, employers will be less interested in knowing applicants’ grade-point averages and the courses they took than in knowing the skills– the output – a prospective worker can deliver. This will permit employees to have more portable careers, Leopold said, because their qualifications will be more universally recognized and applicable. ◆

From the International Monetary Fund: “Toil & Technology”

Related resources


Register here to receive a monthly update on our newest content.