Skills are the key to successfully

navigating a recession
Higher skilled workers can produce more, helping
economies and businesses thrive.

AI-Powered Talent Intelligence Platform™

 How to out-skill a recession
There are several approaches organizations can take when managing an economic downturn: They can
hunker down, lay off extra employees and freeze all hiring, or go all-in on innovation and develop new
products and ways of operating. But is one approach better, and how can organizations ensure they’re
equipped to succeed?

The U.S. Bureau of Labor Statistics defines productivity as how efficiently inputs (materials, knowledge,
time, etc.) are converted into outputs (goods or services). The well-being of economies and businesses
hinges on productivity, as greater productivity usually leads to higher wages for workers and greater
profits — if organizations can produce more, they can sell more goods or services.

Often, the more skilled someone is in a role, the more outputs they can create via a given amount of inputs.
Not only do highly skilled workers produce more, but they can also help create entirely new products and
services, which, in turn, helps drive greater profitability.

A Gallup and AWS study confirmed that “digital skills provide immense economic value to businesses and
workers worldwide, raising gross domestic product (GDP), revenue growth, innovation, wages, job security,
and job satisfaction for businesses that integrate these technologies and the workers who acquire the
needed skill sets,” but “while both workers and organizations cite strong interest in digital skills training,
companies around the world are struggling to fill vacant jobs that require these skills.”

As AI and digital transformation continue to change the skills required in today’s economy, organizations
focused on hiring and developing talent with highly sought-after digital skills will have the most productive
workforces and the strongest ability to weather economic turbulence.

Eightfold AI Skills are the key to successfully navigating a recession 2

Complex human skills, How skills are changing the nature of work
like problem-solving and The half-life of skills — the amount of time before a skill loses half its
value — is quickly shrinking. In 2017, the measure was about five years,
creativity, will leap in but by 2021, that estimate dwindled to four years. The longevity for
value, and workers with technical skills is even bleaker at just 2.5 years.
these skills will likely
have more employment Much of this change is driven by digital transformation and AI. For years,
AI has been slowly taking over repetitive tasks that don’t require human
opportunities and supervision or nuance. More recent advances in generative AI — AI that
command higher salaries. creates content based on data, like ChatGPT or Deep Dream — have
That also means that the accelerated what AI can do. A new report by Goldman Sachs predicted
competition for top talent, the latest advancements in AI could lead to 300 million jobs being lost
already tough, is probably or degraded.
going to get tougher. As a result, jobs that AI can’t perform will become more specialized.
Kathleen Davis writes, “There are skills that machines just can’t do
and, as Chamorro-Premuzic says, those are the uniquely human skills,
like management, which was recently named as one of the top skills
employers are looking for.” These complex human skills, like problem-
solving and creativity, will leap in value, and workers with these skills
will likely have more employment opportunities and command higher
salaries. That also means that the competition for top talent, already
tough, is probably going to get tougher.

Fastest declining skills in the global airline industry

Kaizen

UML

Java Enterprise Edition

ClearCase

XML

DMAIC

Subversion Rate of change

Value stream mapping > 4x

Microsoft Word 2x-4x

< 2x
Visio

Source: Eightfold AI Talent Intelligence Platform

Eightfold AI Skills are the key to successfully navigating a recession 3

 To acquire the skills necessary for a changing economy, organizations will need to adopt a skills-based
approach to hiring and upskilling. As industries evolve, reskilled or upskilled workers will be more likely
to transition to new jobs, which will help reduce unemployment and mitigate the adverse effects of
economic downturns.

Additionally, upskilling helps employees work more efficiently, produce higher quality work, and improve
their problem-solving abilities. These outcomes improve morale, with nearly three-quarters of employees
with advanced digital skills expressing high job satisfaction and higher confidence in their job security.

To create a flexible, teachable workforce, organizations must first identify the job requirements of
tomorrow and the people with the potential to do them. With skills-based talent planning, leaders can
assess and adjust their workforce strategies to changes, internal or external, by proactively upskilling
employees full-time or contingent talent for others.

Eightfold AI Skills are the key to successfully navigating a recession 4

 Organizations that don’t have the right skills have much to lose
The benefits of having highly sought-after human skills are abundant for both organizations and workers,
but the consequences of not having the right skills can be just as significant. Organizations that don’t invest
in strategic hiring and upskilling risk drawbacks in productivity, innovation, growth, and competitiveness.

As a recent example, Eightfold researchers examined the airline industry. Airlines have faced some of the
most extreme operational challenges in recent history, largely due to the pandemic. In 2020, with tourism
almost non-existent, airlines struggled to maintain expenses and issued furloughs and layoffs, and many
workers — including pilots — taking buyouts or early retirement. From March to June 2020, the U.S. airline
industry lost 126,700 employees, despite the government giving airlines subsidies to keep employees on
payrolls.

Despite these cuts, in 2021, airline leaders said they were bringing back fewer workers to run even leaner.

Air transportation employment, in thousands

600

500

400

300

200

100

0
Jan-20 Mar-20 May-20 Jul-20 Sep-20 Nov-20 Jan-21 Mar-21 May-21 Jul-21 Sep-21 Nov-21 Jan-22 Mar-22 May-22 Jul-22 Sep-22 Nov-22 Jan-23

Source: BLS current employment statistics, January 2020 to January 2023

Research by Marshall Fisher and the Wharton School discovered the “run lean” strategy often fails
because sales and operating profits rise with more and better-trained personnel. The airlines experienced
this phenomenon in 2021 — when they actually added routes to schedules to accommodate the growing
demand for leisure travel, especially during the holidays.

“There were two problems: The airlines’ scheduling people weren’t talking with the operations staff. And
as a result, many airlines suddenly found themselves dramatically overscheduled and just as dramatically
understaffed, forcing flight cancellations,” CBS News reported.

It took until November 2022 for the airlines to return to the employment levels of March 2020. But the
airline industry still faces a pilot shortage that is predicted to peak this year. Leaders who delayed returning
to full staff made inadequate workforce planning decisions. They didn’t consider how understaffing would
lead to lost skills, rehiring difficulty, performance — and overall, lower productivity. Although there was
no way to predict a pandemic, forecasting the return of customer demand, recruiting the right talent, and
retaining talent with the potential to learn new skills should have been the focus.

Eightfold AI Skills are the key to successfully navigating a recession 5

 What high tech can learn from the airline industry
The airline industry made headlines as thousands of passengers were stranded, whether due to staffing
shortages, bad weather, overscheduling, or other factors. Airlines should have been prioritizing digital
transformation — along with training their employees and finding new ones skilled to use the new
technology — to stay ahead of competitors, optimize operations, transform services, and satisfy customers.

Today, the airline industry still faces a labor shortage. To overcome this, airlines must find people in
adjacent occupations who can be upskilled to reinforce the talent pipeline. By looking at adjacent skills,
organizations can exponentially widen the pool of quality candidates. Organizations like Activision
Blizzard are already using AI to identify skills adjacencies in industries outside of video gaming to
increase their candidate pool.

The airline industry could also look at university aviation programs to find students interested in the
industry or veteran-employment programs focused on matching transitioning vets based on their skills.
Airlines should also take advantage of AI. Many factors, including the number of flights per day, crew
licensing and qualifications, and work regulations, must be continuously monitored to create an optimal
schedule. AI models can help airlines adapt to scheduling changes, delays, and cancellations, and may
even factor in predicted crew fatigue and reduce risks.

Eightfold AI Skills are the key to successfully navigating a recession 6

Eightfold’s research Likewise, tech companies can start empowering their workers through
upskilling programs and recruiting programs that tap into universities
provided insight into the and veteran-employment programs. They can also use AI for many
top 10 fastest-rising skills tasks, like chatbot-based customer support, scheduling sales or
in the global workforce. recruiting calls, or even helping marketers create content faster. Talent
Because these areas will Intelligence Platforms, like Eightfold AI, can also help organizations use
become mainstream, the power of deep-learning AI to identify, hire, and upskill the right talent.
organizations should focus Could the tech industry have avoided mass layoffs in 2022 and 2023?
on upskilling their staff Evidence shows that organizations that make cuts deeper and sooner
with these skills. during downturns have difficulty getting back to normal when business
returns. And even then, they’re playing catchup and don’t perform as
well financially as their peers do. Navigating the future is more difficult
when organizations don’t adequately predict or prepare talent inventory
to adapt to new business cycles.

Without proper planning, there will be various periods where there’s a

surplus, a shortage, or a group of employees with skills that don’t match
current needs. It’s impossible to say if the tech layoffs could have been
entirely avoided, but with a skills-based approach, layoffs certainly could
have been mitigated, and talent could have been redeployed into more
productive roles. Then organizations could continue to maintain and
sharpen their people’s skills, and keep producing at high volumes before,
during, and after any kind of downturn.

Fastest rising skills in the global airline industry

Machine learning

Data analytics
AngularJS

Digital marketing

Git

Analytics

Talent acquisition
Rate of change
Jira > 4x

Commercial aviation 2x-4x

Financial risk < 2x

Source: Eightfold AI

Eightfold AI Skills are the key to successfully navigating a recession 7

 3 steps to build a skills-based talent strategy
Along with digital transformation and focusing on skills, there are three
steps organizations should take to implement a skill-based talent strategy.

Identify the most immediate skills needs

1 Creating programs to advance the skills and engagement of
people isn’t enough. Organizations must identify the most
immediate skill needs and prioritize these areas for the greatest
return on investment. With limited budgets for professional
development, they must ensure they’re investing wisely and that
their workers are receiving the most benefits.

Talent Intelligence Platforms, like Eightfold AI, enable

organizations to identify current or future skills gaps. Talent
leaders can then use that information to build a plan for acquiring
those skills through hiring, upskilling, or even bringing in
contingent talent for project-based work.

Increase awareness about skills-development programs

2 Talent leaders must make an ongoing effort to alert employees
about skills-development programs. Workers may not be aware
of career-advancement opportunities and may miss out on
participating in these programs. Organizations should use
communication campaigns and feature ambassadors to highlight
the benefits of skilling and coaching initiatives.

For example, organizations could create an internal talent

57% marketplace, a hub where the organization lists new projects, gigs,
mentorships, and events that can help employees gain desired
skill sets. A talent marketplace like this could also help managers
“Organizations with a skills-
identify employees outside of their teams with the skills they need
based approach are 57% to complete a critical project.
more likely to be agile.”
– “Navigating the end of jobs,” Deloitte
Create the time and space for people to participate
3 The lack of time to improve skills and reach professional goals is a
significant obstacle to career advancement. People must make a
considerable effort to learn new skills and apply that knowledge.

Organizations should give employees the time and space to focus

on learning and development. In doing so, organizations will get
the skills they need to grow, and their employees will feel engaged
and valued.

Eightfold AI Skills are the key to successfully navigating a recession 8

Unrivaled
talent
insights.

Extraordinary
workforce
potential.

Discover your workforce’s potential

Workforces fueled by skills-based talent planning, upskilling, and professional development are
essential for organizations as the global economy enters its next phase. To succeed, organizations
must have the ability to adapt and pivot to constantly changing needs.

Eightfold’s Talent Intelligence Platform uses deep-learning AI and one of the world’s largest global
talent data sets to provide unrivaled insights into your workforce and the industry at large. Recruit
talent efficiently, exceed diversity goals, retain top performers, and upskill and reskill your workforce
with a single solution for all your talent needs.

Transform your workforce.

About Eightfold AI
Eightfold AI’s market-leading Talent Intelligence Platform™ helps organizations retain top performers,
upskill and reskill their workforce, recruit talent efficiently, and reach diversity goals. Eightfold’s
patented deep learning artificial intelligence platform is available in more than 155 countries and 24
languages, enabling cutting-edge enterprises to transform their talent into a competitive advantage.
For more information, visit www.eightfold.ai.

©2023 Eightfold AI, Inc.