Businesses struggle to reskill workers fast enough for AI era: report

Business leaders say the time required to upskill employees is the main hurdle in adopting a skills-based hiring strategy.

The biggest challenge facing Singapore businesses today isn’t finding talent—it’s reskilling their existing workforce fast enough, according to a new report from Workday.

More than half (52%) of business leaders say the time required to upskill employees is the main hurdle in adopting a skills-based hiring strategy.

As artificial intelligence (AI) continues to transform industries, the demand for new skill sets is rapidly evolving. Yet, many organisations lack clarity on their employees' capabilities, with only 46% of Singapore leaders reporting a clear view of their workforce’s skills.

To combat this uncertainty, companies are moving away from traditional hiring practices that emphasise degrees and job titles. Instead, 36% of Singapore businesses have already adopted a skills-first approach, whilst another 24% plan to make the transition in the next year.

With digital transformation at the forefront, 64% of Singapore businesses prioritise digital skills for the future. However, a lack of soft skills such as communication and teamwork is proving to be a growing concern—34% of companies cite social skills as the most critical expertise currently missing.

Whilst AI is driving workforce transformation, it is also seen as a tool for streamlining tasks and supporting a skills-based hiring approach. More than half (52%) of Singapore leaders say AI helps automate repetitive work, allowing employees to focus on higher-value tasks.

Despite the momentum behind skills-first strategies, business leaders acknowledge that technology alone won’t solve the issue. Resistance to change (49%) and the need for clear communication about the benefits of upskilling (58%) remain key barriers to workforce transformation.

Singapore’s business leaders are increasingly aligning workforce development with economic growth, with 64% agreeing that skills-based hiring boosts productivity and innovation.