Talent shortages threaten business growth
Rachel Muller-Heyndyk, May 03, 2018
Talent shortages will seriously hinder business growth in the UK and abroad if left unaddressed, according to research
Korn Ferry’s Global Talent Crunch report explored the gap between future talent supply and demand across the three sectors of: finance and business services; technology, media and telecommunications (TMT); and manufacturing. It found that if left unaddressed talent deficits could have a significant impact on several global economies.
The UK and Germany face the greatest threat to the TMT sector, with a potential loss of annual revenues of $27.70 billion (£20 billion) and $30.70 billion (£22.5 billion) respectively by 2030. London risks losing it's place as a leader in the financial market, due to the UK facing a shortage of more than half a million workers in financial and business services – losing out on $89.98 billion (£66 billion) in annual revenues by 2030 potentially.
Manufacturing faces a talent deficit crisis in EMEA of more than 1.1 million workers by 2030, despite having a predicted surplus of highly skilled workers in 2020.
The study revealed a mismatch between supply of workers and business demand across the globe. The US, Japan, France, Germany and Australia face the largest threat in the short term. Failing to invest in talent could cost these countries $1.876 trillion (£1.38 trillion) by 2020. Labour shortages in global financial and business services are most acute, with a potential deficit of 10.7 million workers globally by 2030.
India was the only economy predicted to maintain a talent surplus in 2025 and 2030.
Matt Crosby, senior client partner at Korn Ferry, said that EMEA businesses must act quickly. “Companies across EMEA 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, with an opportunity cost of $1.906 trillion [£1.4 trillion] in annual unrealised revenue by 2030,” he said.
“The right talent is the greatest competitive advantage there is for an organisation – and that talent is getting scarcer every day. Our study reveals that there already isn’t enough skilled talent to go around, and by 2030 organisations and economies could find themselves in the grip of a talent crisis. In the face of such acute talent shortages, workforce planning and a comprehensive understanding of the talent pipeline are critical.”
Crosby added that companies should look for ways to combine technological advancement with a skilled workforce.
“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”, he said.
The Korn Ferry Global Talent Crunch study is based on economic modelling designed by Korn Ferry, Man Bites Dog and Oxford Analytica. It was carried out by Oxford Analytica.