$10 Trillion at Risk in a Global Workforce Crisis?

October 19, 20183:35 pm
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There will be global labour-force imbalances between 2020 and 2030, according to a global workforce crisis study conducted by Rainer Strack, a global leader of the human resources topic at Boston Consulting Group (BCG). Rainer and team calculated that this crisis will risk approximately $10 trillion dollar – around US (60 percent) and more than 10 percent of total worldwide gross domestic product (GDP).

A question remains, what is the cause of this major loss worldwide and how do we overcome it?

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Rainer, in his TED talk, explained that we will face labor shortage, skill mismatch, and cultural challenge in workforce. He took an example of Germans and showed that there will be 8 million gap between labour supply and labour demand. The data showed that there are 25 countries which are responsible for 70 percent of the world’s GDP and 15 of them will face labour shortage by 2030. These include well-developed countries such as Australia, Germany, Japan, and South Korea.

Among the problem caused by this crisis is that there will be more of low-skilled employees and lack of high-skilled employees. This will lead skills mismatch in the workforce. However, rapid development of new technology like AI will help companies address this issue. Technology can replace low-skilled jobs and create more high-skilled jobs for employee. Moreover, BCG study showed that 60 percent from 200.000 high-skilled job seekers are willing to work abroad. This will help lower skills gap between countries. The most wanted country people are willing to move is USA with 42 percent, followed by UK, Canada, Germany, Switzerland, France, and Australia.

Respondents were also asked to rank the most important aspects in workforce. The result was outstanding as salary no longer becomes a priority. Fixed salary ranks at number eight, while number one is an appreciation of employee’s work, followed by good relationship with colleagues, good work-life balance, and good relationship with the higher-ups. It can be concluded that, the demand of employees will be more personal in the future as they want to be more appreciated at work.

Rainer emphasised that employees are looking for recognition in their job “not only once a year with the annual bonus, but every day.” Therefore, employee recognition should be developed as a must-have habit because this will bring positive impact to the company. When employees feel that their jobs are recognised and appreciated by others, this will make them happy and in turn, improve productivity.

As for solutions for the workforce crisis, companies need to increase their ‘people strategy’ such as how to forecast supply and demand, how to attract more skilled people into company, how to educate and upskill employees, as well as how to appreciate and manage relationship culture. Other measures businesses can do include raising retirement age, changing immigration policies, bringing in more women to the workforce, and launching education and training initiatives.

In conclusion, employment will be more and more personal in the near future. By 2030, more employees will look for recognition in the workforce while company needs to provide more comfortable work environment. This is not about salary when it comes to job search, but how company will treat their employees. So, it is all about attitude. Rainer said that “one crucial underlying factor is to change our attitudes. Employees are resources and assets, not cost, not headcounts, not machines.”

To read the full paper, click here.

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