A major commercial crisis is looming over organisations and economies throughout the world. By 2030, we can expect a talent deficit of 85.2 million workers across the economies analysed — greater than the current population of Germany. This global skills shortage could result in $8.5 trillion in unrealised annual revenue by 2030 — equivalent to the combined GDP of Germany and Japan.
While global leaders have bet heavily on technology for future growth—a 2016 Korn Ferry survey found that 67 percent of CEOs believe technology will be their chief value generator in the future of work—they have discounted the value of human capital. Misalignment between automation, AI, machine learning, and other technological advances and the skills and experience talent needs to leverage the full potential of those advances is a main factor contributing to growing talent deficits. Technology cannot deliver the promised productivity gains if there are not enough human workers with the right skills. This has set the scene for a global talent crunch.
To understand the global demand for skilled labour, we assessed the demand for talent versus supply in 20 developed and developing economies across the Americas, EMEA and Asia Pacific. According to our model, by 2025 demand for highly skilled workers will outstrip supply by 13.6 million workers globally and it will rise to 35.1 million workers by 2030.
What does the talent crunch mean for Hong Kong?
Hong Kong is already facing a talent crunch: its highly skilled deficit will stand at 263,000 by 2020 and deteriorate at a rate of 11.0% annually to 746,000 by 2030. 746,000 is the equivalent to 79.5% of Hong Kong’s highly skilled workforce in 2030. Finance will account for 20.4% of these shortages in 2020, which will increase to 23.3% by 2030. Technology and manufacturing will account for 8.4% and 1.5% of total Level A shortages in 2030.
By 2030, Hong Kong could lose out on $219.85 billion USD that will not be realized due to talent shortages. In terms of the size of its economy, Hong Kong could fail to grow by 39.3% by 2030.
Organisations in Hong Kong are aware the talent crunch is coming, but they’re probably not aware of how severe the impact could be. To counter the crisis, Hong Kong should leverage three competitive advantages it already has.
Firstly, many mainland Chinese undergraduates already choose to study their postgraduate degrees in Hong Kong, often staying to work here afterward. Hong Kong needs to encourage this crucial highly skilled talent to keep coming, in higher numbers, over the next 12 years, and make it easy for employers to connect to this source of talent.
Secondly, where mainland Chinese and Hong Kong undergraduates choose to study outside of Asia – for example, those who attend universities in Australia, Canada, the US and UK – significant effort should be made to attract this talent back to Hong Kong following graduation. Globally every country in our study except India will experience a talent shortage at Level A by 2030, so these people are likely to enjoy offers from local employers once they have qualified.
Finally, importing labour has already been a very successful strategy for Hong Kong; the government should leverage the excellent infrastructure it already has for international workers to continue attracting talented expatriates.
At the organisational level, accelerating development through on-the-ground experiences is key. If organisations can give talent a ‘learning platform’ to gain broad experience throughout the business, exposing them to many different disciplines and functions, those people will become more agile and bring greater diversity of thinking to issues – both critical abilities to help organisations navigate an uncertain future of work.