It’s a paradox that’s hard to grasp, and it comes from the new study titled Global Talent 2021 conducted by Oxford Economics in conjunction with (among others) global HR consulting firm Towers Watson. According to the Executive Summary of the study:
On the one hand, 40 million workers in the industrialized world are unemployed, according to recent estimates by the International Labor Organization. Yet executives and managers tasked with hiring new workers often say they are unable to find the right people with the proper skills to fill their vacancies.”
I’m not sure I buy the notion that all of those 40 million workers don’t have the proper skills to be employed, but that’s the big reason that so many companies say they can’t find the right people to fill their jobs. The Global Talent 2021 survey digs into that, as well as where talent is in relative abundance, and, how the world’s labor markets will need to adjust to the workplace changes we see happening all around us.
Balancing talent supply and demand
The study found that the balance between supply and demand of talent differs a great deal from market to market in ways that will significantly impact the global workplace over the next 10 years.
The report notes: “Specifically, as the skills employers require become more complex, labor shortages are projected in many mature markets, including the U.S., Germany, Canada and Italy. Meanwhile, a surplus of skilled talent is likely to emerge in locales such as Brazil, Colombia, India and South Africa.”
“The dynamic changes in global economics and ever-evolving technology necessitate that companies rethink how they address their shifting talent needs. Some of these changes run counter to what most companies have been experiencing in various markets,” said Ravin Jesuthasan, global practice leader for talent management at Towers Watson, in a press release about the survey. “These new realities make it incumbent on HR executives to consider new and creative ways to access talent across the globe.
The survey suggests that a decade from now, eight of the top 10 countries with the largest talent surpluses will be in the developing world, led by India, Indonesia, Colombia and South Africa.
In these economies, the increasing abundance of skilled workers will compress the wage premium for talent, allowing for investment in new technologies and business models that will fuel growth well beyond 2021. By contrast, mature economies like the U.K., U.S., Japan, South Korea, Canada and Italy will confront shortages of skilled workers, in part because of their aging demographics.
This is a deep and detailed survey with lots of data and a variety of findings that are not easily quantified in a simple blog post. However, here are some of the highlights worth noting:
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- The most dramatic jump in employment demand will be in emerging Asia, according to survey respondents, where the need for new employees will jump some 22 percent. Other emerging markets that will see above-average growth in required staff are Latin America, the Middle East and Africa (13 percent) and Eastern Europe (10.5 percent).
- Employment demand in Western Europe, by contrast, is projected to grow a rather modest 3.5 percent, according to the survey. In industries such as business services, energy, travel and transport, and life sciences, staffing levels will actually decline. Somewhat stronger job growth is expected in North America, where surveyed executives expect overall employment to rise 6.1 percent over the next three years.
- Business transformation will require new skills. The vast majority of companies are engaging in transformation initiatives to rethink their global strategies, business models and organizational approaches. This transformation also requires a repositioning of employee skill sets across all levels of seniority. Digital knowledge, agile thinking, interpersonal and communication skills, and global operating capabilities will be talent areas in high demand over the next five to 10 years.
- Companies will need to address the talent mismatch. In the developed world, where talent shortages in a number of managerial and technical fields are expected to persist, companies will be forced to think more explicitly about the trade-offs among outsourcing work, offshoring staff and retraining workers.
- HR executives who adopt an evidence-based approach will see significant results. Firms were asked 42 targeted questions on the five core principles of evidence-based change: logic-driven analytics, segmentation, optimization, risk leverage, and integration and synergy. The research shows conclusively that implementing the five HR principles boosted employee engagement.
“Significant” changes in the talent landscape
“Our study underscores the need for executives to prepare for the major realignment of the global workforce, which is already under way,” said Lou Celi, President of Oxford Economics America. “These changes in the talent landscape, brought on by rapid technology adoption, continued globalization, shifting demographics and increasing competition, are significant — and permanent.”
The study was conducted by Oxford Economics in partnership with Towers Watson and a number of others listed in the research report at www.blogs.oef.com/globaltalent2021, and in collaboration with the Organization of American States. It was conducted in the first quarter of 2012, reaching a total of 352 HR professionals worldwide. Of them, roughly one-third were Chief Human Resource Officers; another third were senior vice presidents, vice presidents or directors of HR; and the rest were HR managers and analysts. The survey reached executives in all regions around the world and represents a wide range of industry sectors.
There’s a lot of deep data in this study (you can get very detailed the Executive Summary here) and a lot of recommendations for talent managers and HR professionals. But, it doesn’t really get to what I think is the key issue: with all this looming talent shortage, why aren’t we doing more to retrain and recast those 40 million unemployed workers worldwide. They can’t ALL be unable to learn and adapt.
Yes, that’s the $64,000 question, I suppose, but then again, that’s a harder question to craft a survey around, isn’t it?
Of course, there’s a lot more going on than another survey about the looming global talent shortage. Here are some HR and workplace-related items you may have missed. This is TLNT’s weekly round-up of news, trends, and insights from the world of talent management. I do it so you don’t have to.
- Is HR simply missing qualified candidates? Like I said earlier, I don’t entirely buy the notion that we have a big shortage of workers with the right kind of skills, and this story from USA Today seems to support that point of view. “A Beyond.com survey backs the view that poor communication often prevents human resource officials from identifying viable candidates,” the story notes. “Job descriptions are often too vague or too specific, and HR staffers may rule out qualified applicants because they don’t understand what hiring managers want, says Rich Milgram, CEO of Beyond.com, a job search Web site.”
- Smartphones creating OT issues for employers. According to a Atlanta Journal-Constitution story (I found it in the Denver Post), “Smartphones and BlackBerrys that enable work any time, anywhere are increasingly blurring the lines between work life and personal life — and introducing the sticky issue of when overtime is owed to workers. The always-connected worker and the pressures of the uncertain economy have led many to feel they should always be working — because they can, thanks to the growing use of smartphones. That’s allowing work to bleed into evenings, weekends and even sleep, with some people taking their phones and BlackBerrys to bed with them. And the situation becomes tricky for hourly employees, who qualify for overtime.”
- Cutting everyone to minimum wage. Here’s one way to deal with a city’s budget crunch: cut all city workers to minimum wage. As the Philadelphia Inquirer reports, “Firefighters (in Scranton, PA.) have been running into burning buildings for $7.25 an hour. ‘That can inhibit how you perform,’ said firefighter Bob Zoltewicz … ‘You have to try to keep that salary out of your mental state.’ Since the mayor of this financially distressed city decided to deal with budget woes by paring the paychecks of all 400 city workers to minimum wage a week ago, it has been difficult for people to think about much else.”