Despite today’s high unemployment rates, the global talent risk is growing. Soon staggering talent gaps will appear in large parts of the world threatening economic growth.
Economies will struggle to remain competitive while organizations will compete for talent on an unprecedented scale. Now, human capital is replacing financial capital as the engine of economic prosperity.
The roots of the looming talent scarcity are no mystery. The Northern hemisphere faces talent shortages in a wide range of occupational clusters largely because populations are ageing rapidly and educational standards are insufficient.
The United States, for example, will need to add more than 25 million workers to its talent base by 2030 to sustain economic growth, while Western Europe will need more than 45 million. In Germany, according to a recent assessment, 70% of employers are hard-pressed to find the right people.
In developed countries, ageing and the retirement of baby boomers will have significant implications for how to manage workforce quantity, quality and costs.
Many countries in the Southern hemisphere report workforce surpluses due to high economic growth and stable birth rates. However, there are questions about the employability of these workers — whether they have the necessary skills to get jobs and work effectively. The uneven quality of educational systems in developing countries is one reason why workers are not receiving the training they need to thrive in an increasingly global economy. As one example, only 25% of Indian professionals are considered employable by multinationals.
Read the new analysis by The World Economic Forum and Boston Consulting Group, including seven proposed responses to mitigate the risks.
Global Talent and Skills Scarcities – By The Numbers
The talent gap is a challenge for employers everywhere. To sustain economic growth, by 2030 the United States will need to add more than 25 million workers and Western Europe will need to add more than 45 million employees.
There are an estimated 214 million international migrants worldwide. Collectively, they would make up the world’s fifth-largest nation.
Migration is not only a South-to-North phenomenon; in fact, 40% of the world’s migrants move from one developing country to another.
Foreign nationals are authors of the majority of patent applications filed by many US companies: 65% at Merck and 64% at GE and 60% at Cisco.
Foreign-born workers with university or equivalent qualifications make up just 2% of the European labor market, compared with 4.5% in the United States, 8% in Australia and nearly 10% in Canada.
With 45 million new entrants in the global job market annually – most of them young – 300 million new jobs will be needed between now and 2015 to keep pace with the growth in the labor force.
In North and West Africa, more than one-quarter of the population is under age 15 and unemployment rates for young people exceed 30%.
Employability will continue to be a huge problem worldwide. Because of the uneven quality of education systems, only 25% of Indian and 20% of Russian professionals are currently considered employable by multinationals.
Compared to today, in 2050, most G7 and all BRIC countries will have more than doubled age 65 and older dependency ratios, and all except India will have more aged societies than today’s most aged society (Japan).
Even China faces long-term talent shortages. The number of those aged 60 and older is expanding rapidly, already forming 12.5% of the nation’s population. The country’s one-child policy and its drop in birth rates means that by 2050 the 10 workers now supporting each senior citizen will fall to 2.5.
Eighty-nine per cent of women who voluntarily leave their jobs — for example to raise a child — want to go back to work but only 40% have been able to find full-time, mainstream jobs.
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