As artificial intelligence and automation take over, the only way to guarantee a professional future in business is to work on your "soft skills". Find out what they are and why machines can't replace them.

Any episode of BBC mockumentary The Office could be a masterclass in “soft skills” – specifically, in what they are not. At the fictional Wernham Hogg paper company, where “life is stationary”, the insecure branch manager, David Brent, can be found sleazing onto a job applicant mid-interview or making homophobic cracks in team meetings, unceremoniously dropping news of redundancies or spouting his dubious “rock ‘n’ roll” management wisdom.

Of course, Brent is a caricature but it’s his cluelessness and inability to connect, his woeful lack of soft skills, which make viewers cringe. Indeed, it seems the term “soft skills” is a misnomer: “soft” implies “easy” – that empathy, integrity and collaboration come naturally – but judging by the billions now being spent on teaching them, they don’t. “These are the skills that are hardest to understand and systematise,” according to Harvard Business Review, “and the skills that give – and will continue to give – humans an edge over robots.”

They also have a direct impact on the bottom line, with evidence emerging that soft skills boost productivity and customer goodwill. Oiling the cogs of the corporate machine, they’re the skills that rely on emotional intelligence, such as grit, teamwork and conflict resolution. Underpinning them all are self-awareness and self-management – “the capacity to manage your emotions, to not shout when you shouldn’t, to motivate yourself when you’re feeling down,” says Carol Gill, an associate professor of organisational behaviour at Melbourne Business School. “In the agile, constantly changing world we operate in, if you don’t have soft skills you won’t survive.”

Artificial intelligence, she explains, can make better decisions than humans. “Robots are stacking shelves and retrieving orders. So what skills are valuable? It’s innovation and creativity, which you can’t have without getting lots of heads together, without having empathy with your audiences, whether they be clients or your market. We can get machines and technology to do most things but that’s the one thing they can’t do: relate to other people.”

You may call these skills “soft” (some prefer “transferable”, “durable” or “employability”) but whichever adjective you use, no-one disputes that their stocks are on the rise. A 2017 Deloitte Access Economics report, Soft Skills For Business Success, predicted that those in “soft skill intensive occupations”, such as community workers, managers and sales reps, will make up two-thirds of the workforce by 2030, up from a half in 2000. That’s a shift as big as the move from blue- to white-collar work.

The elevation of soft skills has been a hot topic for some time but the pandemic – and the accompanying digital transformation of the workplace – has only amplified their importance. In a 2021 RMIT Online report, prepared with Deloitte Access Economics, 61 per cent of Australians surveyed said their soft skills had improved during the crisis, mostly in communication, problem solving and time management. “COVID-19 has accelerated the shift towards the need for soft skills,” says Deloitte Access Economics partner John O’Mahony. “Last year [saw] half of Australians working from home, a huge increase in ecommerce, people receiving education and healthcare online. People had to think more about their interpersonal skills.”

Business leaders were also confronted with new challenges, says Gill. “How do I manage people when they’re not in front of me? You can’t just tell people what to do anymore. You have to motivate people. You need to use your influence – which is what leadership is – to align people, even when they might be working different hours in different locations. Soft skills have come to the fore.”

Once just an add-on, soft-skills training is now an integral part of business school programs. Melbourne Business School, for example, is developing a new course called Hybrid Leadership, teaching students how to build teams and stop factions forming when some employees are working remotely and others are in the office. This year, Melbourne’s Small Giants Academy also launched its sell-out Mastery of Business & Empathy program – what it calls a reinvention of the traditional MBA.

A decade ago, Gill was embarrassed to bring up mindfulness in her classes; now she estimates that 70 per cent of her new students are already meditators. In Australia, companies such as IBM, NAB and HSBC encourage it. “Google’s putting it through their organisation because they know it develops soft skills – this capacity to distance [yourself] from thoughts and feelings, to recover quickly from failures.”

As Australia recovers from its worst economic downturn since the Great Depression, resilience and adaptability have become two of the most valuable assets in the soft-skills portfolio, while sexual harassment scandals and royal commissions into banking and aged care have highlighted the worth of an ethical compass. Soft skills have expanded beyond communication and EQ. “It’s now much more around ethics-led leaders and businesses,” says entrepreneur Catriona Wallace, the founder and CEO of Ethical AI Advisory.

Wallace argues that investors still don’t reward ethical, purpose-driven businesses that push diversity and inclusion but there are pleasing signs coming from the “burning platform” of the financial services sector. “You look at some of the big superannuation companies and investment funds – they now won’t fund things that are unethical or affect the environment or if there’s any type of exploitative labour,” says Wallace.

“I think the economic model still doesn’t value soft skills highly enough but I believe it has to come.”

Commonwealth Bank has a long history of leadership training but the year-long banking royal commission, which found Australia’s big banks had put profits before people, necessitated an overhaul of the company’s culture and training priorities. Compared with the CBA of June 2018, when the bank agreed to pay a $700 million penalty for breaching anti-money laundering and counter-terrorism financing laws, “it feels a lot like a different organisation”, says Sian Lewis, CBA’s group executive of human resources.

After the Australian Prudential Regulation Authority surveyed the organisation and interviewed senior leaders, uncovering what Lewis describes as an “overly collaborative, slightly complacent” culture, the bank decided to focus on five key skills: giving and receiving feedback, constructive challenge, trust, self-reflection and asking “Should we?”. Together, they take in a range of soft skills. “It’s difficult to give and receive feedback if you don’t have good listening skills and if you’re not empathetic.”

The bank has since delivered training online and in person, including leadership forums twice a year. These mass gatherings of 2000 managers have also allowed CBA to measure the effectiveness of its training sessions – by doing follow-up surveys with the managers who turn up as well as those who don’t, quizzing them and their teams about their understanding and practice of the five skills. Lewis says attendance makes a significant difference.

And it’s not only CBA leaders having to upskill. Now that most bank transactions are done online and AI chatbots can answer simple customer questions, contact-centre agents have to be better at empathising and problem solving. “Most people are only phoning when they’ve got stuck so the base skills of our agents are going to have to grow over time to reflect that,” says Lewis. “It’s much less transactional than it was, particularly over COVID-19: ‘I don’t know how I’m going to pay my bills’; ‘I think I’ve been defrauded’. [Agents] were having to use all of those soft skills to answer.”

A 2019 McKinsey & Company report, Australia’s Automation Opportunity, concluded that workers will spend at least 40 per cent more time using social and emotional skills by 2030. Demand for workers in unpredictable, interactive roles, such as nurses and salespeople, will rise, while demand will drop for those whose jobs can be automated, such as radiologists and mechanics. Wallace estimates that 40 per cent of jobs in financial services, telecommunications, retail, hospitality and tourism will be replaced by AI over the next five years.

According to Kevin Roose, author of Futureproof: 9 Rules for Humans in the Age of Automation, we’ve been training people for the future all wrong: “We’ve been teaching them to become more machinelike – to major in STEM, to become superefficient, to optimise or life-hack their way to success. We need to focus on the more human skills that machines can’t replace.”

Wallace points out that Australia needs another 160,000 data scientists in the next 10 years to keep up with the rest of the world in AI capabilities but she agrees with Roose. “We should be building the opposing skill set so that the machines and the humans augment each other,” she says. “The organisations that don’t get on board this more purpose-driven, softer-skills approach – even if they put AI in and automate everything – will come unstuck.”

Yet when soft skills seem so related to character and personality, can they be taught? It’s a hard yes from Wallace, who spent a decade teaching organisational behaviour and managerial skills at the Australian Graduate School of Management. “It was the engineers who were terrified in week one,” she recalls with a laugh. “It was like, ‘This is a different language.’ But by the end of the 12 weeks, they were completely transformed; they’d learnt a whole new way of thinking and were so excited – because engineers know they’re a bit introverted and awkward in their social skills and they don’t want to be.”

Author and executive coach Arash Arabi remembers his first crushing performance review after he’d been promoted from computer engineer to engineering manager at 32. “She [his boss, the CEO] read some of the feedback to me and my mind was blown,” he says. “They quoted things I’d said, word for word, and when it was read back to me, I understood: I didn’t have empathy. I didn’t understand the impact of my words. I didn’t know how to lead.” His boss gave him Daniel Goleman’s book, Primal Leadership, and Arabi hired an emotional intelligence coach. He turned his life around in two years. “My income quadrupled, my life satisfaction increased a lot, I changed my job and I was much happier with the new work I was doing.”

Soft skills are essential for middle managers and yet they’re often promoted to those ranks thanks to their superior technical skills or sheer competitiveness – qualities that hardly guarantee a good leader. In a changing work environment, the so-called “frozen middle” is at high risk. “It’s not their fault that they’re frozen; the problem is that they were never trained for the job they need to perform,” says Arabi. “Leadership skills are probably the hardest to automate because they’re about people but maybe if middle managers can’t lead better than a robot, they’ll be [replaced].”

A 2016 Gallup poll found only 18 per cent of managers demonstrated a strong talent for managing people, which means that a remarkable 82 per cent aren’t great leaders. In fact, one in two employees has left a job to escape a bad boss. Arabi says there can be a fine line between dynamic, visionary leaders and egotistical, arrogant ones. “The best leader of recent history, Nelson Mandela, is the north star for me – he was charismatic, to some extent extroverted but not egocentric at all. Compare him with Joseph Stalin – he was also charismatic and extroverted.”

Career success can kill a leader’s soft skills. “Sometimes people start with a lot of emotional intelligence and that helps them get those CEO positions but it’s not easy at the top,” says Arabi, who wrote The Wise Enterprise: Reshape Your Organisation for the Age of Uncertainty. “When you’re in power, you can yell at people if you want to so you don’t need to practise emotional self-control anymore.”

Stereotypically, women excel at soft skills, which may be one reason those abilities haven’t had as much currency in the past. Now, however, female leaders are in a position of strength. “No question about it,” says Wallace, who names New Zealand and Finland, both led by women, as the best responders to the COVID-19 crisis. “Feminine skill sets will be highly sought after.” Wallace is already seeing it among the tech companies she advises. “They’re all desperately trying to find women because they need those skills in the business.”

Gill highlights research that shows women are more agreeable and better team players but wonders whether those soft skills might sometimes work against them. “Women need to be more strategic and aggressive in promoting themselves, rather than sitting back and saying, ‘I just want to help from the sidelines,’” she says. “They do have the skills we need but it’s more difficult for them to see themselves in leadership roles so they might hide their talents under a bushel.”

Male or female, it’s the ethical, adaptable and emotionally astute who face the most promising futures. And what about those organisations that don’t invest in soft skills? “The best-case scenario is that they slowly lose their competitive edge but the worst-case scenario is much more dire,” warns Deloitte’s John O’Mahony. “Think of the firms whose unethical behaviour is uncovered in the market – the potential consequences to their brand value are catastrophic.”

So where does this leave the worker who is lacking in the soft skills department? Say, someone with a shortish fuse and fixed mindset, who maybe borders on the misanthropic? “They have to understand the need for change,” says Gill. “Everyone can be fixed but it’s harder when they don’t have that self-awareness.” It seems the David Brents of the corporate world have their work cut out for them.

Home

Why Soft Skills in the Workplace Are More Important Than Ever Before