KEY CONCEPT

The most valued jobs and occupations in the labour market are those that require social skills — that is, the ability to work with others — or even better, a combination of social and cognitive (knowledge-based) skills.

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IDEA SUMMARY

There are two types of skills involved in the tasks of a job. The first is cognitive — an employee’s knowledge, training and experience that puts the employee in position to accomplish the requirements of the task. Cognitive skills can range from a factory worker’s skills on an assembly line to the skills of a surgeon or the knowledge of a physicist. The second type of skills involved in a job or occupation is social, which is the ability to work with others, to collaborate in some way to accomplish the task. Social skills are also apparent at all levels of the organization, from customer service and sales personnel to C-suite executives.

Cognitive and social skills are not mutually exclusive, although most jobs would have a dominant characteristic.

A study of labour statistics by Harvard professor David Deming shows that, perhaps counterintuitively, cognitive skills are not as highly valued in today’s information-age workplace as social skills. Specifically, using mathematical knowledge (that is, jobs that require a high level of arithmetic and analytical reasoning) as an example of high-level cognitive skills, the data for job growth between 1980 and 2012 showed that:

• The greatest growth in jobs occurred in occupations that required both high levels of math and social skills.
• Occupations that required low levels of math skills but high levels of social skills were the next fastest growing category of jobs, but only in the lower 66th percentile of wage levels.
• The worst growth occurred in jobs that required high levels of math skills but low-level social skills.

In short, Deming notes, job growth has been weak among occupations that don’t require a high level of social skills — even if they require a high level of math skills. In contrast, jobs that require a high level of social skills have increased by 24% during that time period.

Deming’s analysis of wage growth confirms the higher value given to social skills:

• Occupations that required both high levels of math and social skills showed the highest growth in wages.
• Occupations that required low levels of math but high levels of social skills showed a modest growth in wages.
• Wages for occupations that required low levels of math and low levels of social skills declined.

Examining the routineness of a job helps explain the growing value of social skills, and the declining value of cognitive skills, notably the analytical and mathematical skills in the statistics cited above. (At the core of Deming’s research is a highly sophisticated social skills model he developed based on the concept of workers ‘trading tasks’ horizontally to exploit their comparative advantage. Deming’s explanations for the job patterns cited above are drawn from this model.)

Some jobs or occupations require a high level of ‘routine’ tasks, which Deming defines as tasks that are either repetitive — performing the same mental or physical task over and over— or that rely on a high level of automation. Automation is the key factor in the equation. As technology becomes more sophisticated, computers acquire the capacity to take over more and more routine jobs — even those that require high math or analytical skills. Airline pilots, financial managers and software developers, for example, have jobs that involve highly sophisticated cognitive tasks, but tasks that are increasingly automated — which explains why job growth in these occupations either slowed or declined between the years 2000 and 2012.

However, and this is the heart of the matter, even the most sophisticated computer technology cannot replace a human being’s social skills, which requires collaborative and adaptive behaviour (e.g. negotiation, coordination, persuasion and perceptiveness) that cannot be replicated through a computer program. The work of lawyers and editors, for example, cannot be routinized and thus cannot be automated.

While social skills are, in general, more valued than cognitive skills, the most valued occupations of all are those that require high levels of both types of skills — what Deming calls ‘complementarity.’ These types of occupations are the least vulnerable to automation.

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BUSINESS APPLICATION

An organization’s hiring and evaluation practices can often undervalue the all-important social skills. Hiring managers, for example, should not only look at a candidate’s training and experience, but also seek to uncover, during the interview process, accomplishments based on that candidate’s social skills.

Social skills are perhaps more overtly examined during employee evaluations (e.g. they would be included in 360-degree performance appraisals); nevertheless, managers, for example, who ‘make the numbers’ might be rewarded despite poor social skills that undermine the long-term viability of their teams or business units.

In the context of careers, Deming’s research shows that the path to higher wages and more secure jobs is the acquisition of cognitive skills coupled with the development of social skills.

As more and more cognitive tasks become automated, it is the human interaction component of a job that defines success. This has deep implications for how organizations should hire, develop and promote their employees and managers — and how all of us should manage our careers.

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REFERENCES

The Growing Importance of Social Skills in the Labor Market. David J. Deming. NBER Working Paper (August 2015). 

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