Career and Workplace

Why Soft Skills Still Matter in the Age of AI

As AI starts to reshape the workforce, research by Letian Zhang shows that mastering soft skills like communication and critical thinking may be even more crucial than technical know-how.

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Employers have been trying to “upskill” workers to compete in an automated, artificial intelligence world.

But a new paper warns bosses and workers not to forget general—and potentially even more important—fundamentals that serve as a foundation for ongoing learning. Sometimes called “soft skills,” colleagues’ ability to communicate, interact, and think critically underpins how people acquire more advanced professional skills.

Employers need to do a better job identifying and enhancing those foundations to remain competitive, say Harvard Business School Assistant Professor Letian Zhang and coauthors in their new paper, "Skill Dependencies Uncover Nested Human Capital.” The research, published in the journal Nature Human Behaviour, offers a roadmap for companies and policymakers to understand how skills build by “nesting” and reward skilled employees with higher wages.

“The labor market is changing really fast and understanding the skill landscape and the progression of skills is so important today,” says Zhang. “Highly specific, advanced technical skills are obviously important, but fundamental skills are actually really important too, if not more important.”

As artificial intelligence transforms entire industries and labor markets, the report reminds businesses rushing to keep pace not to lose sight of the basics. The research also helps explain barriers to career mobility and offers insights for reducing them.

Zhang collaborated with Moh Hosseinioun, a postdoctoral fellow at Northwestern University’s Kellogg School of Management; Frank Neffke, a scholar at the Complexity Science Hub Vienna, a research organization; and Hyejin Youn, an associate professor at Seoul National University.

‘Nested structures’

“Nesting,” a term originally associated with ecological scholarship and now widely used in other academic fields, describes structures with interdependent parts that accumulate and spread over time.

Think of a small sapling growing into a mighty tree with a tall, thick trunk and branches sprouting from its sides— and branches sprouting from branches, explains Zhang.

In the case of professional development, general skills are at the base of the trunk and more specialized skills branch out from the trunk. Combined, they make a “nested structure,” one component leading to another with new components depending on each other.

“Just as mastering calculus requires a prior understanding of algebra and geometry, education and career paths are both cumulative and sequential, with each step building upon the previous one,” the authors write.

Sequences of skills

Based on an analysis of 70 million job transactions in 20 million resumes and skill-level rankings from the US Bureau of Labor Statistics and other sources, the authors show that there are indeed set sequences—or nested structures—of how people learn and gain skills over years.

Specific skills build upon broader, fundamental ones—as shown in millions of job descriptions that list different requirements—for a broad number of professions. They include computer programming, mathematics, biology, and medicine.

Inside the Research

The researchers sized up the requirements for almost 1,000 occupations, ranking a skill’s importance and the required proficiency. For example, speaking is important for lawyers and paralegals, but lawyers who argue in court need to be more adept speakers. The skills fell into these categories:

  • 31
    General skills, such as oral expression and the ability to speak English
  • 43
    Intermediate skills, like mathematics and the ability to negotiate
  • 46
    Specific skills, including dynamic flexibility and programming

The researchers used government data to create a sample of workers so that they could compare patterns among different demographics. The age of 30 stood out as a turning point; before 30, general and nested skill levels increase rapidly, stabilizing after 30.

Higher wage premiums

The authors found that these “nested structures” routinely commanded higher wages—not surprising considering the years it took to acquire advanced skills, one after the other, over a career. That time-consuming progression makes the total skillset a valuable commodity.

The authors also found that under some conditions, nearly 80 percent of the wage premium commanded by those specific additional skills depended on their underlying foundational skills. Those skills include reading, verbal comprehension and expression, mastery of certain levels of mathematics, critical thinking, leadership and teamwork qualities, and other positive, hard-to-measure attributes.

“We found there are general skills or knowledge behind the curtain, skills that are not immediately seen,” explains Youn. “We tend to forget that these skills are even there. But they are there—and they’re very important.”

Racial and gender disparities

Education plays a key role in the development of general skills and serves as a base for future specialized skills. But what happens if someone receives an inadequate education, and thus inadequate acquisition of general skills, early in life?

The authors found evidence of racial and gender disparities in higher-paying nesting structures, likely the result of unequal access to quality education or stereotyping that pushes people away from certain professions at different points in their lives.
The authors stress that many general skills can be acquired and honed long after high school or college.

“But it gets tricky to reteach fundamental skills later in life,” says Youn. “Once you reach a certain point where you need to make a living, it’s really, really hard to go back to get those fundamental skills. This is what we call ‘skill entrapment,’ and it’s what causes disparities.”

The findings have implications for retraining programs, says Hosseinioun. “Essentially, you can’t just take workers and teach them programming skills or graphic design and then expect them to do well,” he says. “People can learn fundamental skills over time and later in life, but not all of a sudden.”

Policymakers, educators, and employers need to better “prioritize fundamental skill development across all demographic groups and regions” via education and training programs in order to address skill disparities.

‘AI is a definite disruptor’

Nested structures, and the higher paying jobs associated with them, have become more pronounced over the past two decades, as technological advances and other changes require ever-more advanced skills.

“Technology is intensifying nested structures,” says Zhang. “There are other things at work here, such as organizations getting increasingly complex in their roles and requiring new and different skills. AI is a definite disruptor.”

Image by Caleb Jack for Unsplash.

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Skill Dependencies Uncover Nested Human Capital

Hosseinioun, Moh, Frank Neffke, Letian Zhang, and Hyejin Youn. "Skill Dependencies Uncover Nested Human Capital." Nature Human Behaviour 9, no. 4 (April 2025): 673–687.

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