These Industries Will Face the Biggest Talent Shortages by 2030
July 24, 2018
The skills gap is widening, unemployment in the U.S. is at its lowest rate since 2000, and nearly 60% of employers struggle to fill job vacancies within 12 weeks. But if you think it’s tough to find great talent now, new research from the Korn Ferry Institute suggests that things are only going to get worse.
By 2030, the global talent shortage could reach 85.2 million people—costing companies trillions of dollars in lost economic opportunity.
Knowledge-intensive industries like financial services will be some of the hardest hit. These industries require a high volume of skilled workers—and as demand outpaces supply, competition for qualified candidates will soar. This is especially true in countries where unemployment is low, since employed workers have much less incentive to retrain, reskill, or enter a new field.
Here are three sectors that the research shows will be hit hard by the oncoming talent crunch—and what you can do to avoid a crisis.
1. Financial and business services will be 10.7 million workers short
The financial and business services industries are vital to virtually every global market. In the U.K. and the U.S., for example, they account for about a third of the national economy. Korn Ferry Institute’s study predicts that for this sector, talent shortages will be the most severe—and could really damage the industries’ growth.
Within the next two years alone, the talent deficit for these industries may reach almost three million workers globally. This is partly because competition for talent is already tight in these sectors, with the rapid adoption of disruptive technologies leading to a shortage of qualified candidates. And by 2030, that shortage could jump to nearly 10.7 million people—resulting in $1.3 trillion in lost revenue.
Among the 20 countries studied, only India is expected to see a surplus of talent in these industries by 2030. A separate study by Oxford Economics sheds more light on this: within the next decade, India’s pool of college-educated talent is projected to rise by more than 45 million, making it easier for companies to find qualified talent and fueling business growth.
By contrast, the U.S. will be hit the hardest by the talent shortage, losing $435.69 billion in unrealized economic output—or 1.5% of the whole U.S. economy.
2. Technology, media, and telecommunications will fall short 4.3 million workers
The digital skills gap is already hampering digital transformation at 54% of companies. And that gap is widening: Korn Ferry’s research predicts that by 2020, the technology, media, and telecommunications (TMT) industries may be short more than 1.1 million skilled workers globally.
Fast forward to 2030, and that deficit may reach 4.3 million, or 59 times Alphabet’s entire workforce. And since companies across all industries already struggle to find great digital talent, that’s a big problem for everyone.
In total, these shortages are predicted to cost the TMT industries $449.7 billion in unrealized revenue.
Again, India is the only country expected to enjoy a talent surplus in these industries. Skills shortages will be the worst in Hong Kong and the U.S.—which could seriously hurt the U.S.’s chances of remaining the tech leader of the world, according to the report.
Interestingly, while almost every country will experience a serious shortage of highly skilled TMT workers (people who have completed post-secondary education), most will have a surplus of mid-low skill workers, or people with upper secondary education or less (like a high school education). So while highly skilled candidates will be in short supply, the companies that come out on top may be those that focus on training and upskilling employees.
3. Manufacturing will face a 7.9 million people deficit
The global manufacturing industry is expected to experience a deficit of more than two million workers by 2020—and by 2030, that shortage could reach more than 7.9 million people. The resulting loss in revenue may be as high as $607.1 billion.
In the U.S., Korn Ferry attributes this shortage in part to the country’s aging population. Over the next 19 years, 10,000 baby boomers will reach retirement age every day. This makes it crucial for recruiters to plan ahead and attract more millennial and Generation Z candidates to avoid talent shortages down the line. Companies may also want to focus on upskilling these young employees through apprenticeships and workforce training programs.
India’s projected surplus of educated talent means it won’t face manufacturing labor shortages, but every other country studied will. In countries which already struggle to find manufacturing talent, things will only get worse. In Hong Kong alone, the shortage of highly skilled manufacturing workers will be equivalent to a whopping 80% of its industry’s workforce.
Preparing for the talent crunch: look for crucial soft skills and focus on training today to avoid shortages tomorrow
Within the next 12 years, demand for highly skilled workers is going to skyrocket—especially across knowledge-intensive industries. But every industry will feel the ripple effects of the talent crunch, so it’s important to be prepared.
“Constant learning—driven by both workers and organizations—will be central to the future of work, extending far beyond the traditional definition of learning and development,” says Jean-Marc Laouchez, president of the Korn Ferry Institute.
Investing in training initiatives now and encouraging a culture of continuous learning will help your company stay ahead of the growing talent shortage. Focus on upskilling new and current employees, because finding talent with the skills you need will only grow harder and harder.
To make this possible, companies like Walmart, CVS Health, and Starbucks have used training programs to upskill entry-level workers and help them move up within the company—encouraging loyalty and broadening the company’s skill base. Others, including LinkedIn, offer learning and development benefits as a perk, letting employees develop skills in the areas they care about the most.
Since nearly 60% of employees with digital skills say they’re willing to invest their own time and money to keep their skills relevant, these perks help existing employees upskill while showing candidates that your company is invested in its people’s growth.
You can also expand your net to find candidates with crucial hard-to-teach soft skills but fewer hard skills, which can often be taught on the job. Using tactics like predictive assessment tools and job auditions can help you spot candidates with a lot of potential that might not be reflected on their resumes.
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