Although the world is on the brink of a talent crisis, business leaders are seemingly unaware of the challenges ahead and are, instead, focusing on technology at the expense of their people. They are misreading the impending talent shortage as a fleeting phase of an economic cycle, rather than a permanent structural change.
A recent report by Korn Ferry Institute revealed that Australian companies will have a talent shortage of over 739,000 by 2020, which is forecast to increase to 2.2 million by 2030. Knowledge-intensive industries such as financial services will be among some of the most impacted.
According to Korn Ferry Business leaders are misinterpreting the value of technology and automation in the workforce in filling this labour deficit. This means several things for businesses. First, there will be $228.1 billion AUD in unrealised revenue within the next year. Companies will have to pay a $40,220 AUD premium to highly skilled workers on top of inflation by 2030. This is especially present in countries with lower employment as employed workers have less reason to retrain or upskill. Although Australia’s attempting to bridge that gap through job growth, our unemployment rate is still growing.
In fact, more than half of Australian C-suite believe their companies are safe from the talent shortage, and almost three-quarters of those surveyed believe technology will surpass people as their greatest value creator by 2030. However, Korn Ferry argues that while robotics and machine learning will automate a range of functions, changing the nature of jobs and employment there will still be a need for highly skilled individuals to manage, apply and enhance automation.
This is already a concern with the National Australia Bank showing that majority of businesses reported difficulties in finding suitable labour and a report by the Manpower group said that one-third (34%) of employers say they can’t fill open jobs.
Andrew Lafontaine, Head of Organisational Strategy Practice, Korn Ferry ANZ said that “leaders that prioritise building a highly skilled talent pipeline will shield their companies from the worst effects of the talent crunch, which include constrained growth, paying a premium for mission-critical talent and fighting with competitors in the same shallow pool.”
“With the rate and extent of transformation we are seeing in the market, leaders must focus on what makes their organisation unique to employees, both in terms of the company’s core purpose and the rewards they can offer people – beyond the salary.”
The lack of skilled workers needed to drive business strategy could be the defining issue of the age, threatening the GDP of nations as well as the profitability of organisations. The shortage may slash the growth of key global markets and sectors. Worldwide, companies could fail to generate $8.452 trillion by 2030. The undersupply of skilled workers is also likely to contribute to the salary surge adding $2.515 trillion to annual wage bills globally by 2030.