Do you know what skills will be most valuable in your organization, given rapid advances in digital technologies?  Do you know what capabilities you should be investing in to stay competitive? What skills are becoming less valuable?

To make good decisions about investments in critical talent, leaders must understand specifically what specific human skills are increasingly valuable or obsolete due to rapid technology advances. A study by several MIT economists reveals three important trends, and here are some implications for managers.

1. Computer skills have become ubiquitous in the labor market.

It seems obvious that “facility with technology” is required in most jobs today. But the impacts of making what Frank MacCrory and his MIT colleagues call “equipment skills” essential are not well understood. Here are three ramifications of this change:

More Frequent Skill Shortages: A major cause of perceived “skills gaps” in organizations today is the mismatch between employers’ needs for proficiency with specific technologies and the lack of job candidates who have those skills. It may be a relatively simple job that just requires knowledge of Excel and PowerPoint, or a role that demands proficiency with much more sophisticated applications. The demand for technology skills, even in non-technical jobs, is growing much faster than potential employees can acquire these capabilities.

Knowledge Loss Risks Increase: Many executives don’t realize how vulnerable they’ve become to single points of failure where only one employee has developed unique knowledge about a critical computer system or the integration of essential software applications. It may be knowledge of how to maintain and use a particular database, how to handle workarounds for a complex older system, or even who to call when a particular technology system fails.

The “equipment skills” that MacCrory’s team found to be so essential in most jobs today are immensely varied in one sense. But the researchers also found that being competent with technology is now much less of a differentiator between jobs. So, in many cases, workers with strong computer skills are more mobile and marketable, increasing the chances of unwanted turnover.

Obsolete Older Workers: Veteran employees who’ve performed jobs with more limited technology skills become marginalized or obsolete very quickly unless they proactively acquire relevant new capabilities. This has all kinds of implications for performance management.

2. Cognitive skills are increasingly in demand for shrinking middle-skill jobs.

This makes leaders in higher education happy, since they’re rightfully concerned about clarifying the value of a college education. MacCrory and his colleagues found that employers supervising roles ranging from print binding workers and social workers to logging machine operators now have higher expectations about cognitive skills than they did in 2006. For example, they observe, “many machine operators need to understand, diagnose and optimize their tools much more than in the past.”

Indeed, employers expect workers in a wide range of manufacturing and white collar jobs to apply an increasingly sophisticated set of complex problem solving, critical thinking, oral and written communication skills. These cognitive capabilities have become important differentiating factors for employees in jobs that can’t be automated. But here are three management implications of this change.

New Cognitive Skills Poorly Defined. Researchers found dramatic changes in cognitive capabilities required in just an eight-year period (2006-2014). But because these changes have happened so fast, many employers have not defined the specific cognitive capabilities their jobs require.

Young Job Candidates Under Prepared for New Environment. The technology-centered culture Millennials have grown up in (e.g. texting, Instagram, & Google) does not encourage the development of higher-level cognitive skills. So, while more college graduates are being produced today, too many don’t have the intellectual horsepower or communication skills employers need. This makes recruiting and sifting through job candidates more challenging and time consuming.

Some Older Workers Can’t Adapt. My own research indicates that veteran employees, who built careers before computers became so central to their field, sometimes don’t have the intellectual versatility or motivation to adapt to the increased cognitive demands in their role. Again, this can create significant performance management and moral challenges for leaders.

3. Interpersonal Skills Increasingly in Demand!

Computers continue to show a limited ability to perform tasks requiring complex interpersonal skills. So the importance of these capabilities in fields such as sales, nursing and teaching has increased. Characteristics defining “interpersonal” capabilities in the MIT study included: adaptability, assisting or caring for others, cooperation, dependability, service orientation, and stress tolerance. 
There are at least three management implications for the growing importance of interpersonal skills.

More Time Screening for Relational “Fit”. Managers today talk a lot about the importance of “cultural fit” when it comes to hiring. That’s often code for the quality of an individual’s interpersonal skills in working as part of a team.

Finding candidates who fit your organization is much more time consuming than just identifying people with adequate skills. So the increased importance of interpersonal skills will prolong the hiring process in the future. Look for instruments that might help you better predict whether an individual candidate is well suited for your unit. One such tool is Teamability from The Gabriel Institute, an online assessment survey that predicts how an individual will perform as part of a team.

Greater ROI for Investing in Interpersonal Skills. The ability to communicate and collaborate in a more diverse, multi-generational and virtual workplace is increasingly in important. Thus, managers can make their employees more valuable by helping them develop interpersonal skills needed to function in a more complex environment.

An Essential Leadership Competency. Employee retention has become a central objective for many organizations because the costs of turnover are so great. The need to keep high performing, hard-to-replace employees takes leaders who can communicate vision, motivate and empathize. This means interpersonal skills are even more important in leadership roles. When promoting future leaders, it is insane not to take into account their relational competencies, and developing these skills is a worthwhile investment.

Access the study’s findings here in “Racing With and Against the Machine” by Frank MacCrory et al. and wade through all that MIT-type math if you like. Knock yourself out! I’ve just given you the highlights of the ways different types of skills are increasing in importance and some of the implications for managers. Digital technology advances have just begun to impact the mix of skills that will be needed to stay competitive. As a leader, you need to continually watch the horizon to anticipate the impacts technology-driven changes will have on workforce needs, your own capabilities, and even those of your children.