Employers worldwide are undergoing a market shift that is expected to affect the supply and demand for skilled talent over the next decade, according to a study conducted by Oxford Economics in partnership with Towers Watson.
The study finds that there is a race between technology and education as technology increases demand for highly skilled workers and emerging economies are growing their supplies of talent through wider access to education.
As employers are expecting more complex skills, labor shortages are predicted in many mature markets, such as the United States, Germany, Canada and Italy. There is also a surplus of skilled talent expected to emerge in Brazil, Colombia, India and South Africa.
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"The dynamic changes in global economics and ever-evolving technology necessitate that companies rethink how they address their shifting talent needs," says Ravin Jesuthasan, global practice leader for talent management at Towers Watson. "Some of these changes run counter to what most companies have been experiencing in various markets. These new realities make it incumbent on HR executives to consider new and creative ways to access talent across the globe."
By the next decade, eight of the top 10 countries with the largest talent surpluses are believe to be in the developing world. Leading these countries are expected to be India, Indonesia, Colombia and South Africa. As these countries are seeing more skilled workers, it should compress the wage premium for talent to make way for investment in new technologies and business models that will encourage growth well beyond 2021. However, mature economies are expected to face shortages of skilled workers, partly because of their aging demographics.
Respondents say the most dramatic bump in employment demand will be in Asia where the need for new employees will jump 22.2 percent. Among other emerging markets that are believed to experience above-average growth in required staff are Latin America at 13.4 percent, the Middle East and Africa at 13.2 percent and Eastern Europe at 10.5 percent.
Meanwhile, employment demand in Western Europe is projected to grow by only 3.5 percent, the study finds. Staffing levels for business services, energy, travel and transport, and life sciences are expected to fall while job growth is predicted to rise 6.1 percent in North America over the next three years.
The study also finds that most employers are rethinking their global strategies, business models and organizational approaches, necessitating the repositioning of employee skill sets across all levels of seniority, and there is expected to be a greater emphasis on working in several different countries throughout one's career.
"Our study underscores the need for executives to prepare for the major realignment of the global work force, which is already under way," says Lou Celi, president of Oxford Economics America. "These changes in the talent landscape, brought on by rapid technology adoption, continued globalization, shifting demographics and increasing competition, are significant — and permanent."
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