The global talent shortage is a growing concern that will have significant implications for businesses and economies in the coming years. According to a Korn Ferry , by 2030 there will be a global human talent shortage of more than 85 million people, equivalent to the population of Germany.
❗️This talent shortage could result in $8.5 trillion in unrealized annual revenues if left unchecked.
Companies are forced to spend more money on salaries and various employee incentives to attract and retain skilled workers.
The difficulty in retaining talent has also led to a redistribution of skilled workers, with smaller companies scooping up workers made available by recent big-tech layoffs.
The lack of skilled professionals hinders corporate growth and innovation, leading to issues with product performance and morale.
Decoding the Factors Driving Talent Shortages
The talent shortage is driven by several factors, including demographic shifts and the rapid pace of technological change.
Many developed countries, such as Japan and European nations, have experienced low birth rates for decades, leading to an aging workforce.
In the United States, the retirement of baby boomers will leave many high-skilled jobs unfilled, as younger generations may not have the necessary training and experience.
Many employees lack the technical expertise necessary to qualify for newer, more complex roles, leading to a void in the industry.
❌ Traditional recruiting methods have also been found to be ineffective in accurately assessing a candidate’s skills in certain tech fields, resulting in underqualified or mismatched hires.
Overcoming Challenges: Talent Shortage and New Technologies
At the same time, the adoption of new technologies like artificial intelligence, machine learning, and automation is transforming the job market, creating demand for specialized skills that are in short supply.
The World Economic Forum estimates that by 2025, 50% of all employees will need reskilling due to the adoption of new technologies.
This skills gap is expected to be particularly acute in industries like technology, finance, and manufacturing.
How Does Talent Shortage Impact Competitive Advantage?
The impact of the talent crunch could be significant, potentially eroding the competitive advantages of sector leaders.
For example, the United States’ dominance in the tech industry could be threatened by a shortage of high-tech workers, potentially costing the country $162 billion in lost annual revenues.
Meanwhile, countries like India could emerge as the next tech powerhouse, with a projected surplus of over 1 million high-skilled tech workers by 2030❗️
Strategies for Addressing Talent Shortage
- To address the talent shortage, organizations and governments will need to prioritize talent strategy and invest in reskilling and upskilling their workforces.
- This may involve increased hiring of recent graduates, fostering a culture of continuous learning, and collaborating with educational institutions to develop the skills needed for the future.
- Additionally, companies are diversifying their workforce by targeting diverse candidates and cultivating a more inclusive pipeline.
Failure to act could have far-reaching consequences for businesses and economies around the world.
