According to the Korn Ferry “Future of Work Talent Crunch” report looking at the talent-supply gap in 20 developed countries, the United States’ financial services sector will miss out on $435.69 billion in projected unrealized economic output.
On the startup front, the US is projected to be surpassed by India in the Global Startup Ecosystem Ranking, all due to India being the only country projected to have a labor surplus by 2030 in the financial and business services.
“A global talent crunch could cost nations trillions of dollars in unrealized annual revenues by 2030.”
This labor and skill deficit is with us today and is going to intensify over the next decade. How do we prepare for it and how can companies mitigate these risks?
Why is There a Worldwide Talent Shortage?
While the Great Resignation in the US (a.k.a the “Big Quit”) was making headlines, when adjusted and put into perspective we can see that it follows a pattern: more and more people quit their jobs over the last 15 years.
However, this phenomenon was overblown in the media, over one in four people who quit their previous job (26%) regret their decision, amidst the upcoming recession announced by interest rates hike and massive layoffs this leaves a lot of workers anxious to settle for a stable job.
So if the Big Quit is over, why aren’t we able to hire enough talent to sustain growth? The report cites four main reasons:
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- Global growth requiring more skilled workers
- Demographic trends with a decline in births over the last decades
- Underskilled workforces unable to address the skills deficit
- Tightening immigration from countries with a talent surplus
“The impact of the talent crunch is so significant that the continued predominance of sector powerhouses is in question, from London as a global financial services center to the United States as a technology leader to China as a key manufacturing base.”
Achieve Recruitment Excellence to Hire and Onboard Faster
To overcome the talent crunch, organizations must become agile even in the most traditional areas such as candidate sourcing, candidate assessment, onboarding and performance management. That’s where HR tech platforms and recruitment operations kick in.
Recruiting is moving away from being sales centric and requiring talent teams to spend most of their time on outreach and coordination. Recruiting in 2022 is about building a streamlined talent pipeline. The focus is on removing bottlenecks and intermediaries to reduce wait time, measuring results and improving to achieve recruitment excellence.
New platforms have been built to allow companies to hire in full trust and transparency. Experiences led by humans and supported by algorithms are the way forward.
The HR tech ecosystem is thriving, this signals an unprecedented supremacy for organizations that are able to hire and onboard faster, sustainably and at scale. Businesses looking to meet their growth targets in the next 5 to 10 years should look at recruitment as an opportunity for digital transformation.
Remote Work Enablement Leads to Border-Free Hiring
India is projected to have a skilled-labor surplus of around 245.3 million workers by 2030. It was the only country found in the KF study expected to have a surplus, owed mainly to its vast supply of working-age citizens and government programs to boost workers’ skills.
One way employers must adopt a balanced stance and do their part is to consider building a borderless company culture allowing experts in other countries to complement and support the local workforce. Hiring abroad has never been simpler thanks to global employment platform solutions.
Final Thoughts
The future of work isn’t just limited to temporary trends such as remote work or a 4-day week.
HR leaders, founders and CEOs must look ahead at the next 5-10 years to sustain their growth strategy without taking talent availability for granted. It’s now or never, the HR function needs a seat at the table and to be held accountable to high standards of growth enablement and cost optimization.
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