Despite global trend of talent crunch, India is projected to have a talent surplus that would make its economy to be the only one which will not face an upward revision of wages by 2030. The Salary Surge study commissioned by Korn Ferry noted that unlike any other country surveyed in the study, India will have a highly skilled talent surplus by 2030.
According to the study, a shortage of highly skilled employees in a country could typically drive up salaries for the most in-demand workers by the next couple of years. For organisations around the world, this phenomenon is predicted to add more than USD 2.5 trillion in annual labour costs by 2030. The report found that the world’s largest economies such as the US, China, and Germany will be likely to experience rapidly escalating employee costs.
There are three key milestones of global demand analysed in the Global Talent Crunch; 2020, 2025 and 2030. Some 20 markets were involved in the study including India, which covered across three sectors including financial and business services, technology, media and telecommunications (TMT) and manufacturing.
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In a global level, US firms can expect to pay the most globally facing a salary raise of more than US 531 billion by 2030, while Germany will be the worst affected, facing a potential wage premium of approximately USD 176 billion by 2030.
Meanwhile, the study predicted that in the Asia Pacific region, the salary surge could add more than USD 1 trillion to annual payrolls by 2030, jeopardising companies’ profitability and threatening business models if kept unchecked.
Korn Ferry Head of rewards and benefits for the APAC region, Dhritiman Chakrabarti said, “The new era of work is one of scarcity in abundance, there are plenty of people, but not enough with the skills their organisations will need to survive. While overall wage increases are just keeping pace with inflation, salaries for in-demand workers will skyrocket if companies choose to compete for the best and brightest on salary alone.”
Further, the study found that Japan would be expected to spend the most salary surge with an additional USD 468 billion by 2030. However, smaller markets with limited workforces are likely to feel the most pressure and by 2030, with Singapore and Hong Kong could expect salary premiums equivalent to more than 10 percent of their 2017 GDP, it said.
At a sector level, manufacturing, a critical driver of growth for emerging economies, may be stalled by the huge impact of the salary surge, The India Times reports.
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