How to Deal with the Looming Talent Shortage

Talent Shortage

Who’s Got Talent?

How many times have we heard that robots are coming for our jobs? Whether it’s from science fiction or straight from the mouth of Elon Musk, it’s a dystopia we’ve been anticipating for quite some time. However, based on a recent study from Korn Ferry, a global organizational consulting firm, we may have been misplacing our fears on the wrong targets.

In a sweeping country-by-country analysis, the biggest issue isn’t that robots are stealing all the jobs – it’s that there simply aren’t enough human beings to take them. According to the study, by 2030 there will be a global human talent shortage of more than 85 million people. For scale, that’s roughly equivalent to the population of Germany. Left unchecked, in 2030 that talent shortage could result in $8.5 trillion in unrealized annual revenues.

Talent Crunch

So, how did we get here and what can we do about it? For starters, many of these problems stem from simple demography. Japan and many European nations, for instance, are continuing a decade long decline in birth rates. For countries with the deadly combination of low unemployment and a booming manufacturing sector – the Czech Republic, Poland, Hungary, Slovakia, and many others – labor shortages are accelerating automation and increased use of robotics “not to replace people, but because there aren’t enough of them to fill the factories,” the report says.

In the United States, the graying population is a major contributor to the talent shortage, with some 10,000 baby boomers reaching retirement age every day for the next 19 years. Even last year, U.S. job vacancies hit a record 6 million per month. The fact is, younger generations will not have had the time or training required to take many of the high-skilled jobs left behind.

“As with many economies, the onus falls on companies to train workers, and also to encourage governments to rethink education programs to generate the talent pipelines the industry will require,” says Werner Penk, President of Korn Ferry’s Global Technology Market practice.

Follow the Leader

The impact of the talent crunch is so significant that the continued predominance of sector powerhouses is in question. For instance, the United States is the undisputed leader in tech, but the talent shortage could erode that lead fast. In tech alone, the US could lose out on $162 billion worth of revenues annually unless it finds more high-tech workers. When you look at India, which is projected to have a surplus of more than 1 million high-skilled tech workers by 2030, it’s not difficult to imagine them as the next tech leader.

“As a result,” the report says, “organizations may be prompted to relocate their headquarters and operational centers to places where the talent supply is more plentiful. Governments will be forced to invest in improving their people’s skills to avert corporate flight and to defend their nations’ income and status.”

Be a Life-Long Learner

The savviest organizations are taking on the onus of training talent themselves, increasing their hiring of people straight out of school, says Jean-Marc Laouchez, president of the Korn Ferry Institute. These firms are also trying to instill a culture of continuous learning and training. “Constant learning – driven by both workers and organizations – will be central to the future of work, extending far beyond the traditional definition of learning and development,” he says.

Though we love to blame robots, the truth is that global growth, demographic trends, under-skilled workforces, and tightening immigration policies are much more sinister culprits. There isn’t one solution to this alarming trend, but there are a series of insights and implications we can use to inform how we attract and retain top talent.

Insights

  • Demand will be biggest for highly educated professionals, technicians, and managers. Professionals will be in particularly high demand in the trade, transportation, and communications industries in developing nations.
  • In the next two decades, demand for professionals in manufacturing will peak at more than 10 percent in developing countries, exceeding 4 percent across all countries sampled.
  • Healthcare research and development alone will generate enormous demand for skilled labor worldwide.
  • Employees without critical knowledge and technical skills will be left behind.

Implications

  • On the business side, introduce strategic workforce planning to address imbalances between labor supply and demand.
  • On the government side, easing migration will attract the right talent globally.
  • On a personal level, increase your chances at long-term employability by advancing technological literacy and cross-cultural learning skills.
  • For HR managers and recruiters, develop a talent “trellis” by focusing on horizontal and vertical career and education paths.
  • Management should be willing to ditch the 9-to-5 and encourage contract, freelance, and virtual mobility to access required skills easily.
  • Hiring teams need to continue their diversification and equality efforts by tapping women, people of color, folks from the LGBTQIA community, older professionals, and immigrants.

To learn more about how your brand can prepare for the looming talent shortage, contact Founding Partner Tracy Lloyd at tracyl@emotivebrand.com.

Emotive Brand is a brand strategy and design firm in San Francisco.

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