The labour market in Wales is being reshaped by three key trends – automation, the transition to net zero, and an ageing workforce – transforming both the nature of work and the skills required for jobs in Wales.

A new CIPD report, Lifelong Learning in the Reskilling Era, highlights how these trends offer opportunities, but also risk deepening inequalities if workers are unable to reskill or retrain.

In response, the report calls for a ‘new era of reskilling’ with action from Welsh employers and the UK Government to help people – of all ages – develop new skills, stay in employment and build long-term financial security.

Automation: transforming jobs

Research cited in the report reveals that automation threatens 3.6% of jobs in Wales, higher than the UK average of 3%. Those in low-skilled and administrative roles are particularly at risk, as are young workers (aged 16–24) due to their strong presence in entry-level or low-skill positions.

However, the report highlights that these technological shifts also present significant opportunities for more fulfilling and higher-quality jobs. For example, 28% of jobs in Wales are estimated to be exposed to generative AI which is expected to help reduce repetitive or time-consuming tasks, and create new roles, business models, and industries.

The key challenge for employers will be to ensure that workers are not left behind but are equipped to seize these emerging opportunities. Organisations are urged to prioritise targeted training and reskilling to empower employees to adapt to new ways of working or transition into entirely new roles.

Green skills urgently needed

Wales currently has 11,000 full-time roles in low-carbon sectors, and looking ahead, it is estimated that around 6.3 million workers in the UK (one in five) will see their job change due to the transition to net zero by 2050. For about 10% of workers, this will involve adapting to new skill requirements, while another 10% may need to retrain entirely.

In response, the CIPD’s report calls for urgent investment in green skills training. It warns that without such investment, businesses in Wales will struggle to compete in emerging markets or reap the economic and environmental benefits of supporting the UK Government’s target of reaching net zero by 2050.

Employers in construction, energy, manufacturing, and logistics are especially urged to embed green skills into workforce planning, to remain competitive and drive sustainable growth.

Longer working lives will reshape the workforce

Demographic shifts are also reshaping the Welsh workforce. Employment among 50–64-year-olds in Wales has increased by 32% over the last two decades – more than triple the overall employment growth rate of just 9% in Wales (from 2004-2024). Yet, Wales has one of the lowest employment rates for older workers in the UK at 67%, compared to 76% in the South East of England.

Furthermore, by 2050, the UK will see a 41% increase in people aged 65 and over (from 19% to 23% of the population), while the share of those under 25 will decline from 29% to 24%. This demographic transformation presents a fundamental challenge to how we approach work, retirement, and economic growth.

As people live and work longer, many will reassess their career goals. Some may seek more flexible roles to accommodate caregiving or health needs, while others may pursue retraining for new opportunities later in life.

However, with declining access to training and job mobility as people age, there’s a risk that older people may become trapped in unsuitable roles or fall out of the labour market entirely if their jobs are displaced or no longer fit their mobility needs, impacting their earning potential and wellbeing.

A future-fit workforce in Wales

Considering these challenges – and new UK Government data showing nearly 45% of workers aren’t contributing to a pension – Wales risks falling behind in building a future-ready, financially resilient workforce, without coordinated action from employers and policymakers.

A collaborative approach to reskilling and lifelong learning is urgently needed to help workers – of all ages – adapt and stay in work.

To achieve this, further recommendations for the Government and Welsh employers in the report include:

  • Boost workplace training with more internal skills development, reskilling, and redeployment opportunities. This will expose people new skills and different roles.
  • Address barriers to adult learning like time and cost, especially for those with work or caregiving responsibilities and open up more flexible learning pathways.
  • The Government should consider introducing individual support measures such as training vouchers, flexible learning accounts, and paid educational leave.

If changes to retirement age and the pensions crisis mean we’re all going to work for longer, we urgently need to usher in a new era of reskilling to help people develop into new roles and sectors.

However, the real challenge lies not just in keeping people in work longer – it’s about the quality and sustainability of that work. By reimaging how we support people to learn and adapt throughout their lives, we can build a more resilient, equitable and prosperous future for everyone.