We all hear about AI, robots and computers replacing jobs but if there aren’t enough skilled workers to manage, apply and deploy this technology, it can’t mitigate the global talent crunch. How will businesses and economies grow in 2030 with a labour shortage of 85.2 million skilled workers? The talent crunch is coming. Are you ready?
A major commercial crisis is looming over organisations and economies throughout the world. By 2030, demand for skilled workers will outstrip supply, resulting in a global shortage of more than 85 million people. Signs are already emerging that within two years there won’t be enough talent to go around. In countries with low employment and booming manufacturing production, including the Czech Republic, Hungary, and Slovakia, a labour shortage has already accelerated automation and increased use of robotics—not to replace people, but because there aren’t enough of them to fill the factories.
But leaders are betting 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. The problem is the mismatch between technological advances, including automation, artificial intelligence (AI), and machine learning, and the skills and experience workers need to leverage these advanced tools. 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.
Korn Ferry’s report, The Global Talent Crunch, assessed the talent supply gap in 20 developed and developing economies at three critical milestones: 2020, 2025, and 2030. What we found is that given the pace of global growth, current and projected demographic trends, the prevalence of under-skilled workers, and tightening immigration, even significant increases in productivity enabled by technology cannot alleviate the impact of the talent crunch. The projected talent crunch is so severe, the ongoing dominance of sector powerhouses could fall into question: from London as a global financial services centre to the United States as a technology leader, and China as a key manufacturing base.
The talent deficit issue could threaten economies and sectors across APAC:
- In total, Asia Pacific faces an imminent labour shortage of 12.3 million workers by 2020, rising to 47.0 million by 2030 at an annual opportunity cost of $4.238 trillion.
- Financial and business services will be hardest hit across the region, with a deficit of 3.7 million workers by 2030, resulting in an annual opportunity cost of more than $439.62 billion if labour shortages are not addressed.
- Significant talent deficits in manufacturing and Technology, media, and telecommunications (TMT) in China and Japan (3.2 million combined by 2030) puts the region’s global dominance at risk
- Japan’s TMT powerhouse status is under threat — it faces a shortage of more than a half-million workers, losing out on $47.80 billion in potential annual revenue by 2030 – equivalent to 20 percent of its entire sector — a TMT opportunity cost second only to the U.S.
- Technological advancement across all sectors of the Asia Pacific economy could be hindered by an acute talent shortage of 2.0 million TMT workers, at an annual opportunity cost of more than $151.60 billion by 2030.
- India is the only economy among the 20 studied with a potential talent surplus, predicting an excess of 245.3 million workers by 2030.
Companies across Asia Pacific must act now to future-proof their business. Left unaddressed, the talent crunch will severely impact the growth of key markets and sectors across the region. Leaders need to keep in mind that the future will be built on the effective partnership between people and technology. The acute demand for workers with the right skills that businesses need, rather than the much-discussed domination of technology in business, could become the defining issue of our age.