Already a major issue, skilled talent shortages will continue to impede growth and if not addressed, could have a significant impact on major global economies by 2030, a study* by Korn Ferry (NYSE: KFY) reveals today.
“Companies must work to mitigate this potential talent crisis now to protect their future,” said Matt Crosby, senior client partner at Korn Ferry. “Left to run its course, this shortage will severely impact the growth of markets across Europe, the Middle East and Africa (EMEA) with a talent deficit of more than 14.3 million workers and $1.906 trillion in unrealised annual revenue across the region at 2030.”
Korn Ferry’s Global Talent Crunch study estimates the gap between future talent supply and demand in 20 major economies at three milestones: 2020, 2025 and 2030, and across three sectors: financial and business services; technology, media and telecommunications (TMT); and manufacturing.
The talent deficit issue could threaten economies and sectors across EMEA:
● Germany could experience the largest deficit in EMEA of 4.9 million workers and could lose out on $629.89 billion of annual revenue by 2030 if labour shortages are not addressed – equivalent to 14 percent of its economy.
● London’s financial market dominance is under threat – the U.K. faces a shortage of more than half a million workers in financial and business services, losing out on $89.98 billion in annual revenues by 2030 – equivalent to 7 percent of the sector.
● Financial and business services are hardest hit across the EMEA region – losing out on more than $358.70 billion in annual revenue by 2030.
● Technological advancement across all sectors could be hindered by an acute labour shortage – TMT faces a shortage of more than 700,000 workers, with the sector losing out on annual revenues of $103.25 billion by 2030.
● Germany and the U.K. face the highest TMT sector opportunity cost – losing out on $30.70 and $27.70 billion in annual revenue respectively by 2030.
● Manufacturing is facing a talent deficit crisis in EMEA of more than 1.1 million workers by 2030, despite having a surplus of highly skilled workers in 2020.
● Germany’s manufacturing powerhouse status at risk, ranking highest within EMEA and second highest among the 20 markets studied for unrealized revenue within the manufacturing sector ($77.93 billion by 2030).
Globally, the study reveals a potential crisis with a sizable mismatch between supply of available workers and business demand:
● The United States, Japan, France, Germany and Australia face the largest threat in the near term, with a combined opportunity cost of $1.876 trillion by 2020.
● Labour shortages in global financial and business services are the most acute, with a potential deficit of 10.7 million workers globally by 2030.
● Technological advancement across all sectors of the global economy could be hindered by an acute global labour shortage of 4.3 million TMT workers by 2030.
● Manufacturing is facing a global talent deficit crisis of 7.9 million workers by 2030, despite being the only sector with a surplus of highly skilled workers in 2020.
● India is the only economy in the study maintaining a talent surplus in 2025 and 2030.
Matt Crosby, Korn Ferry said: “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 in annual unrealised revenue by 2030.”
“The right talent is the greatest competitive advantage there is for an organisation - and that talent is getting scarcer every day,” said Crosby “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.”
“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,” said Crosby.