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People Management

Is There a Wage Premium for Human Skills?

Jan 12, 2023 | By Jenna van Schoor
Is There A Wage Premium for Human Skills? - Global SACAP

Human skills are often difficult to quantify, as they aren’t as easy to measure as technical skills. However, recent research by Deloitte suggests that there is a way to measure the effect of soft skills attainment in the workplace.

In this post, we’ll discuss Deloitte’s research into whether there is a wage premium for human skills (meaning these skills are in high demand), and talk more about some of the other soft skills required in the workplace. We’ll then discuss some of the ways you can develop your interpersonal competencies.

Background: Deloitte’s research into human skills

Soft skills are in demand in the workplace. Companies like Deloitte focus on hiring adaptable employees that can demonstrate people skills, regardless of what degree they have. 

To quantify this approach, the Deloitte team in Australia did some research into whether or not there is a correlation between improving human skills in the workplace and an increase in hourly wages. 

Based on research from the USA, the team put together a mathematical model that showed that there was a measurable increase in wages when there was an increase in human skills attainment. To be exact, for every 10% increase in soft skill capacity, there was a correlated 5% increase in wages. 

This shows that there is a wage premium for human skills, but what are these exactly?

Human skills that need to be developed

According to the research, the most significant gaps in soft skills today are:

  • Customer service
  • Organisation and management
  • Digital literacy, and
  • Leadership.  

By increasing these capacities in the workplace, Deloitte’s research suggests that companies can not only improve relationships between staff members but can also increase their revenue. 

These skills are becoming more in demand as the global marketplace and economy evolve. It is expected that by 2030, two-thirds of jobs will be soft skill intensive (according to research in Australia). Implicitly, core competencies are going to become more important than having a certain type of degree over the next decade.

Below, we’ll expand on these in-demand skills, to help get a better insight into the kind of expertise that will be required to better understand human behaviour and prepare for the future of work.

Customer service

Even as businesses start to automate more of their processes, there is still an increasing need for customer service skills. These can cover a broad range of competencies, but empathy, attention to detail and the ability to work under pressure and deal with conflict are key.

Although you might not necessarily work in a retail environment, where customer service is critical, these abilities are useful in any kind of work environment. For example, a strong customer service ethic can be translated into working in a team, dealing with clients and managing relationships with different stakeholders.

Organisation and management

Organisation and management tie into the above set of abilities. Having highly developed interpersonal skills also involves being able to deal with multiple stimuli at once. In a fast-paced work environment, it can be difficult to deal with urgent situations, and still manage your workload. Therefore, organisation and management skills are critical.

One can often learn these competencies on the job, and through trial and error. Yet, with a set of tools to manage your priorities and productivity, organisation and time management can become more systematic, and therefore, easier.

Digital literacy

Digital literacy is becoming even more important, along with developing important interpersonal capabilities. As so much communication takes place online, being able to communicate and manage conversations across a range of platforms is critical, especially as we spend more and more time behind a screen.

Although we might not always interact with clients, customers or stakeholders in person, being able to do so both online and face-to-face is becoming more urgent.

Leadership

While strong leaders have always needed to have a range of soft skills under their belt, in today’s changing world, these are even more in demand. If you consider how much more information there is to process every day, customer service, organisation, management and leadership capabilities are critical.

In an increasingly remote working environment, effective leaders are even more crucial to the success of a business. This means that soft skills are needed to be able to manage teams and deal with clients virtually – without having direct access to their body language or necessarily being able to gauge their exact mood.

Hiring versus training

One of the key points of discussion in Deloitte’s report was whether or not these in-demand skills can be developed or “bought” through hiring. To clarify, is it better to “build” these skills through in-house training and development, or “buy” them through recruitment?

In the report, it was calculated that in Australia, for every $1 spent on recruitment, 64c was spent on training. It’s obvious then that recruitment can be more costly, additionally, training doesn’t offer guarantees when it comes to increasing revenue.

Therefore, as the report suggests, it’s important to find a balance between hiring and training. However, as an individual, you can be proactive and choose to upskill on your own. By developing your interpersonal skills you’ll become a more desirable employee or leader.

How to build human skills

In summary, as we touched on above, according to Deloitte, interpersonal capabilities are going to be more of a focus in the years ahead when it comes to business success. So, how can you constructively develop these in-demand skills?

One way is to take advantage of skills development programmes in the workplace. However, if these aren’t on offer, you can always take matters into your own hands. You can do this by taking online short courses with a specialised focus. These can teach you the human skills you need to thrive, in an accessible and affordable way.

Learn a variety of human skills with SACAP Global

We offer a range of flexible online courses that can help develop your soft skills in a few weeks.

To improve your understanding of customer service, we’d recommend a micro-credential like Intro to Human Behaviour or Effective Interpersonal Communication. Master your organisation and management skills, by understanding what it takes to motivate and run a team.

As for digital literacy, taking a specialised course will help you to become more familiar with interacting with people virtually and learning how to communicate online. Finally, if you’re looking to enhance your leadership capabilities, courses like Intro to Management and Leadership and Intro to Business Environments can help you to upskill and acquire a powerful blend of relevant soft skills. 

Need assistance in choosing a course that best suits you? Get in touch with our team and one of our support staff will be happy to help you.

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