Last Updated on March 2, 2023
The global talent shortage is now undeniable to employers
Few challenges are becoming more clear to corporate leaders than the global talent shortage. Data cited in Envoy INSIGHTS’ Global Talent Imperative shows that skills gaps and labor supply deficits are reaching unprecedented levels that require attention.
A report from McKinsey found that there will be a shortage of over 40 million high-skilled workers worldwide by 2020, and a 2019 study from Korn Ferry predicts that in just another ten years, the talent deficit will grow to 85.2 million workers. According to the report, companies worldwide could stand to lose $8.4 trillion in revenue by the year 2030. Their loss in revenue would be due to the undersupply of skilled workers. If Korn Ferry’s prediction comes to fruition, global productivity, innovation and economic well-being may be affected.
Driving these shortages are a variety of factors, including low unemployment rates and changing immigration policies
Tightening labor markets
As developing countries experience economic growth, unemployment rates are decreasing. According to Deloitte, economies in Japan, Germany, China and the United Kingdom saw their unemployment levels drop to record lows over the past few years.
The U.S. is also in the midst of an extremely tight labor market. For over a year, the amount of unfilled jobs has exceeded the number of citizens seeking work. In fact, at the end of April 2019, there were 7.4 million unfilled jobs and only 5.8 million U.S citizens seeking work, the largest margin on record. Korn Ferry found that the U.S. could face a shortage of more than 6.5 million skilled workers by 2030. Companies may lose a collective $1.7 trillion in missed revenue.
Growing skills gaps
Technological transformation and automation have changed employer needs, eliminating certain low-skilled positions and increasing the demand for technical skills. According to the Smithsonian STEM Imperative, there were a projected 2.4 million unfilled STEM jobs in the U.S. at the end of 2018.
These skills gaps combined with record-low unemployment rates have created challenges for recruiters at U.S. companies. These challenges are especially prevalent in industries undergoing digital transformation. These challenging conditions have driven talent acquisition teams to seek out foreign nationals with key technical skills. According to Envoy’s 2019 Immigration Trends Report, 95% of surveyed employers said that foreign talent was important to their talent acquisition strategy.
U.S. preeminence for global talent challenged
Historically, the U.S. has had little trouble attracting talent to the country. The U.S. had earned the status as one of the most sought-out destinations for foreign workers. However, research shows that this lead may be waning. Emerging economies in foreign countries are convincing some migrants to stay put, while other countries, such as Canada, are adopting progressive policies that are attracting foreign talent in large numbers. Due to increased scrutiny and a largely inefficient immigration process, the U.S. could start to fall behind.
Ready to take strategic action? Find out what employers can do today to improve the acquisition, retention and mobilization of global talent by downloading the full Global Talent Imperative report from Envoy INSIGHTS.
Content in this publication is not intended as legal advice, nor should it be relied on as such. For additional information on the issues discussed, consult an Envoy-retained attorney or another qualified professional.
The post Global Talent Shortage Continues in Both U.S. and World Economies appeared first on Envoy Insights.