Artificial Intelligence (AI), and automation have completely disrupted the way we work and are deeply enrooted in our everyday lives. This is perhaps why, in our 2016 Korn Ferry survey on the future of work, we found that 67% of CEO’s believe that technology, not humans, will be their main value generator.
This line of thinking has led to the value of human talent and its positive impact on business being overlooked. So much so, that we will be facing a serious global talent shortage in a few years. Our new study, The Talent crunch, shows that in 12 years, demand for skilled talent will surpass supply with a global talent shortage of more than 85 million workers. This deficit is mainly due to the imbalance between technological advances and the talent needed to leverage those advances.
Developed economies will be hardest hit by the imminent talent shortage. Australia, France, Germany, Japan and the United States face the largest threat, losing $1.876 trillion in annual revenues by 2020.
Interestingly, the country that’s at the other end of the spectrum is India. The world’s sixth largest economy is the only one in the study which will have a talent surplus by 2030, with 245 million more workers in the next 12 years.
The surplus of extra manpower is driven by a growing, younger working population with the country’s median age expected to be just 31 years by 2030. This is a huge supply of talent compared to the aging population in China, Japan or the US.
Meanwhile India is expected to surpass China's 1.4 billion population in six years, possibly reaching 1.5 billion by 2030. That would make the south Asian nation the most populous economy in the world.
Beyond the growing population, India’s emphasis on affordable and accessible education, especially at college level will generate armies of Level A talent.
Industries where the talent surplus will be the most visible include the financial services with a surplus of 1.1 million, technology, media, telecommunications (TMT) at 1.3 million and manufacturing at 2.44 million of extra highly skilled manpower in 12 years.
One of the key areas where an opportunity exists for India as well as the global economy is technology, of which India has the largest talent pool.
Technology is the key enabling factor for growth across sectors and India can very easily meet the global future demand for talent in this space. We have the potential to dethrone other economies as regional and global hubs of technology. Organisations and the government need to continue leveraging advances in technology to grow further. But it’s only possible when the focus is on the people.
The factors driving the talent oversupply and its benefits are many: Large and young workforce, affordable education, government focus on skill building, incentives to encourage corporate growth and entrepreneurship. The export of India’s talent pool adds tremendous value to other global economies. Indian talent in the US’s tech industry or the nursing industry of the UK and UAE are just a few examples.
What to do with all that talent
The huge reservoir of manpower also raises questions on a) how to manage unemployment and b) how to make this talent pool employable. The government of India has been working towards making the nation a global economic power house through several job creation and skill development initiatives. However, much more needs to be done. The 2017 India Skills Report shows that the country may have a labour surplus, but it also has a lack of employable talent. The IT sector has been grappling with the lack of the desired level of those skills for years.
The Skill India program, which aims to upskill over 300 million workers by 2022, is showing results, but not to the degree expected. Business and government leaders need to rethink their talent strategy initiatives before skill surplus becomes an obstacle to the growth of India’s industries.
The nature of work is changing faster than many realise. With the increasing growth of the service industries, we are quickly transitioning into a white collar workforce. With the rapid growth in automation and digitization there is an increased need for highly skilled staff. That’s why Indian companies and the government need to invest more in making its workforce more employable and equipping them with the right skills that will be needed by 2030.