Deming’s Study on the Changing Labor Market
Deming’s research mapped the development of the U.S. labor market and identified a significant shift: almost all employment growth since the 1980s has occurred in occupations that require strong social skills.
At the same time, many traditional “solo” expert jobs—relying heavily on mathematical and logical abilities but involving little social interaction—have lost relative ground in the labor market. Fields such as healthcare, education, therapy, medicine, and law—all requiring strong interpersonal skills—have increased their share of the workforce, while more isolated expert roles, such as certain engineering and architecture positions, have seen a relative decline.
This trend is also visible in Finland: the share of jobs requiring high social skills grew by approximately 12 percentage points in just two decades, while jobs with low social skill requirements decreased correspondingly.
At the same time, employees are increasingly rewarded for social abilities. Research data shows that socially skilled workers earn higher average salaries than their peers, and this pay gap has grown in recent years. Salary growth has been particularly strong in roles that demand both high technical and high social skills.
Deming found that the highest earnings and career progression go to employees who possess both strong cognitive abilities and solid social skills—but without social skills, technical expertise alone no longer guarantees the same level of reward. In other words, combining hard facts with “people skills” creates an unbeatable combination in today’s workplace. Intellectual ability alone is sufficient in fewer and fewer fields unless paired with the ability to work well with others.
Teamwork and Communication at the Core of Modern Work
Why are teamwork, communication, and collaboration emphasized right now? One key reason is that the organization of human work has become increasingly collaborative and project-based. Complex problems and innovations are most often solved in interdisciplinary teams, rather than through solitary effort. Deming highlighted that employers have long valued the ability to communicate effectively and work as part of a team in new employees—skills that repeatedly emerge in employer surveys as the most important qualities.
Flatter hierarchies and agile ways of working in organizations mean that almost every role involves interaction with other people, clients, or stakeholders. Even traditional expert roles, such as software development or engineering design, have increasingly shifted toward teamwork: the lone expert working in their own “bubble” is becoming a rare phenomenon.
The workplace has increasingly shifted toward team production, where multiple employees work together to produce results by leveraging each person’s strengths. According to Deming, social skills can be seen as a kind of “friction reducer” for collaboration—they lower the costs associated with coordinating among people and enable a more efficient division of labor. In practice, an employee with strong interpersonal skills can negotiate task allocation and “play well” with others more smoothly, allowing the entire team to perform better. This is crucial in a world where jobs involving isolated work in individual offices are disappearing, replaced by roles that increasingly require collective problem-solving.
The nature of work has changed so that collaboration skills, clear communication, and the ability to function in diverse teams are essential for performance and productivity. When each team member brings their own expertise to the table, interpersonal skills act as the glue that keeps skilled individuals productive—communication, empathy, conflict resolution, and the ability to integrate different areas of expertise are crucial for unlocking a team’s full potential.
Effective collaboration doesn’t happen automatically: it requires social intuition, clear role definition, and continuous interaction even among new team compositions—something skilled team players are naturally better at than others.
Technology, Automation and AI Highlight Social Skills
Technological advances, automation, and AI also explain why the value of social skills has increased. Routine and easily repeatable tasks—whether physical or cognitive—can be easily programmed for machines. In recent decades, automation has replaced much work that does not require creativity or human interaction.
In contrast, tasks that require interpersonal interaction, trust, negotiation, or flexible interpretation of situations have proven difficult for machines to replace. Deming summarizes this by noting that computers still cannot replicate genuine human interaction, which has evolved in people over millennia. It is precisely this unpredictable, non-routine interaction that gives humans a competitive edge over machines.
Automation initially targeted lower-level routine tasks, but it is now moving into fields that were previously considered cognitively demanding work for highly educated professionals—if parts of these tasks are repetitive, they too can be programmed. As a result, the remaining jobs increasingly focus on what humans do better than algorithms: creative thinking, adaptability, and working with others. In the future workplace, the organizations and professionals who succeed will be those that leverage technology while investing in human strengths that technology cannot replace.
The Role of HR: Recruit, Develop and Recognize Social Skills
For HR professionals, the rise of social skills translates into concrete actions in recruitment, employee development, and skills recognition. HR plays a key role in ensuring that the organization has future-proof capabilities—not just technical expertise, but also the crucial interpersonal skills. Here are some key perspectives from an HR standpoint:
- Recruitment: It is important to assess candidates’ social skills during the recruitment process, not just their technical expertise. Teamwork and interpersonal abilities can be evaluated through group interviews, case exercises, or behavior-focused interview questions that reveal how a candidate performs in a team or communicates under pressure. Employers themselves widely report valuing soft skills. Therefore, HR should ensure that job postings and selection criteria emphasize collaboration and communication skills just as much as hard skills. When recruitment is done effectively, the organization gains employees who not only perform their own tasks well but also elevate the performance of the entire team.
- Skills Development: Social skills can and should be developed on the job. HR should provide training and coaching that strengthens employees’ communication, teamwork, and leadership abilities. Since social skills are not always reflected in formal qualifications, workplace learning is crucial. HR can also encourage a culture of continuous learning, dialogue, and feedback as part of daily work. The goal is to create a learning-friendly environment where employees feel confident developing themselves in these areas. The better an organization learns to communicate and work as a team internally, the stronger its overall performance becomes.
- Recognition and Reward: HR also plays a role in ensuring that social skills are recognized and valued as part of performance. This means that collaboration and other soft skills are considered in performance evaluations and career advancement. Employees who foster a positive team spirit, share their expertise with colleagues, and demonstrate empathy—for example, in customer interactions—should be acknowledged just as we recognize technical achievements or sales results. HR can help define clear competencies for social skills and train managers to observe and provide feedback on them. When employees see that the organization values good team players, they are motivated to develop their own social capabilities. In the long term, this builds a company culture where people support each other and knowledge flows freely—an essential foundation for innovation and agility in a changing environment.
Deming’s research already proved at the beginning of the decade what HR professionals have observed in practice: a collaborative, communicative, and adaptable workforce makes an organization stronger and better prepared for future challenges. It is HR’s responsibility to ensure that these human skills are recognized, developed, and leveraged—because it is collaboration between people that separates the successful from the rest.
Sources:
David J. Deming, The Growing Importance of Social Skills in the Labor Market, The Quarterly Journal of Economics, Volume 132, Issue 4, November 2017, Pages 1593–1640
https://labore.fi/t&y/sosiaaliset-taidot-ovat-entista-tarkeampia-tyoelamassa/
Subject matter by Ville Ojanen
(Leading Psychologist at Academy of Brain)
Ville Ojanen is a psychologist with a doctorate in cognitive neuroscience. His passion is understanding and influencing the human behavior. Ville combines an exceptionally broad and in-depth understanding of behavioral and neurosciences with practical experience in developing individuals, teams and communities.
He has worked as a clinical neuropsychologist, as an HR professional in Nokia and for fifteen years as an organizational psychologist, coach and keynote speaker. Ville is a serial entrepreneur and the co-founder of Academy of Brain Ltd. He has served in the behavioral science advisor team of the Finnish Prime minister´s office since 2020, currently as a steering group member.
“Change the mind, change the world”
