Global Talent Crunch

Gartner’s survey shows global talent shortage was the top emerging risk organizations face globally in 4Q18. According to the survey, “talent shortage” outweighed “accelerating privacy regulation” and “cloud computing”, which were once rated as the top risks. “Talent shortage” is now the key concern.

Top Five Risks by Overall Risk Score: 1Q18, 2Q18, 3Q18, 4Q18 (Source: Gartner, January 2019)

By 2030, the global talent shortage could reach 85.2 million people, where shortage of skills is the key driver to talent crunch, according to Korn Ferry’s research. Even companies that are using more robotics foresee a growing demand on human talent with advanced skills. The companies might use robots in place of people from the factory floor, and redeploy these people to the research laboratory. However, the mismatch between technological advances and the skills and experience a worker needs to leverage these advanced tools is still a problem.

Below are three knowledge-intensive industries that the research shows will be threatened by the global talent crunch:

1. Financial and business services

By 2030, this industry could face a deficit of 10.7 million workers, which may lead to failure in generating $1.313 trillion of revenue in the market. According to research, the talent crunch will be even more damaging for small but currently mighty spots like Hong Kong and Singapore as small economies have limited opportunities for expansion. Thus, upskilling the existing workforce is critical.

2. Technology, media, and telecommunications

The research forecasted that by 2030, the labor-skills shortage will reach 4.3 million workers with unrealized output of $449.70 billion. U.S. as the world’s tech leader, could face a loss of $162.25 billion due to talent shortages. India, meanwhile, will see a surplus of 1.3 million skilled workers by 2030, offering more opportunities for the nation.

3. Manufacturing

By 2030, the manufacturing industry could face a labor shortage of 7.9 million with $607.14 billion of unrealized output. The industry can be sustained by short-term surpluses driven by China and Russia, until 2020. However, developed countries such as U.S. already struggle to fill certain manufacturing roles.

Based on the research, U.S. is projected to be one of the countries that would face significant talent shortage. Korn Ferry attributes this shortage in part to the nation’s greying population, with 10,000 baby boomers in U.S. expected to reach retirement age each day for the next 19 years. By 2030, the country could experience unrealized revenue of $1.748 trillion due to labor shortages, equivalent to 6% of its entire economy.

Organizations therefore have to be prepared for the talent crunch. Companies need to invest in training initiatives and focus more on upskilling both new and current employees.

Reference:

Korn Ferry, The Global Talent Crunch

Gartner, Inc., 4Q18 Emerging Risks Report and Monitor