A global workforce crisis is approaching: an overall labor shortage plus a huge skill mismatch. Declining birthrates and increasing retirements will shrink the pool of available workers. Simultaneously, employers will see a dearth of highly skilled applicants.
Labor Shortages
Global labor shortages will be a growing issue in the coming years, as the Boston Consulting Group detailed in July 2014. Of the four BRIC countries widely recognized for growth potential, only India is safe from an impending shortfall. Germany faces a projected shortage of 2.4 million workers in 2020, which will rise to 10 million by 2030. South Korea, Italy, Poland, Russia, and Brazil are in similar situations. Other countries with a surplus in 2020 will see a deficit by 2030. (The Hard Facts: Acute Shortages, Unrelenting Surpluses: https://www.bcgperspectives.com/content/articles/management_two_speed_economy_public_sector_global_workforce_crisis/?chapter=2)
What’s the Cause?
Causes for this impeding workforce shortage include:
- Birth rates: China’s one child law went into place in 1979; that generation is in their 30s today.
- Retirement ages
- Immigration policies
- Yearly working hours
- Worker productivity/skill levels
The Mismatch in Worker Skills
In addition to an overall labor shortage, there is a skills mismatch on the horizon. Consequentially, organizations and countries will confront challenges in terms of education, qualification, and competencies.
Will technology change this picture and increase productivity?
For decades, technology has replaced many jobs in multiple industries, but the demand for more people and jobs continues to grow. Humans are more efficient with robots, artificial intelligence, big data, and automation. So the key question is not if technology replaces humans, but will technology mitigate this global workforce crisis? The answer is yes and no. This is a more sophisticated version of “it depends.”
While technology will continue to replace humans, we also create new jobs that require new skills and new competencies, worsening our overall skills mismatch. In the coming decades, talented, skilled workers will be at a premium.
As the BCG research details, this global workforce crisis is approaching fast. Currently, we are at the turning point. The question is: How should a company prepare itself for this global workforce crisis?
What’s the Solution?
Every employer needs to create and implement a talent management strategy to recruit and retain talent. This people strategy consists of four parts:
- Skill Assessment Plan: Forecast supply and demand for different competencies, roles, and functions. Human resources and workforce planning should be a critical component of your strategic planning process.
- Talent Recruitment Plan: Create a plan to recruit top talent, not only Generation Y and women, but also retirees.
- Education and Upskill Plan: Create a plan for training, educating, and upskilling employees. Plan for the upskilling challenge ahead of us.
- Worker Retention Plan: Retain your high-value players. How?
- Create a culture where people are excited to come to work.
- Ensure people are in the roles that align with their competencies.
- Establish a clearly communicated purpose.
- Nurture a rewarding, learning culture where people are appreciated.
Pertinent questions going forward will be:
- Will labor shortages impact your company?
- What will you do about it?
- Have you tried to create a learning culture?
- Do you have a Learning and Talent Management System in place?
Ed Sattar is the CEO of 360training.com. For more than a decade, Sattar has made significant professional contributions to the regulatory compliance space across multiple industries. His experiences include extensive research and consulting to regulatory compliance consulting firms, training providers, and state and federal regulatory agencies. During his tenure in the regulatory compliance workflow automation and eTraining space, he has identified key criteria and compliance standards that currently are being published and implemented.
