The world is experiencing a 15-year low point in an ongoing talent shortage. According to the 2021 Q3 ManpowerGroup Talent Shortage and Employment Outlook Survey, 69% of companies globally reported talent shortages in 2021. That's up from just 35% in 2013. And based on a new report from Korn Ferry, the problem is only going to get worse.
By 2030, Korn Ferry estimates the global talent crunch could reach 85.2 million people, resulting in the loss of trillions of dollars in economic opportunity for companies. The industries that will be hit the hardest are what labor market analysts call, 'knowledge-intensive industries' such as financial services; technology, media and telecommunications; and manufacturing.
This hiring challenge is due in large part to the high demand for and low supply of skilled professionals needed in these tech-enabled, knowledge-intensive industries. The talent shortage challenges are even more exacerbated in countries with low levels of unemployment given that employed workers are less motivated to retrain, reskill or move fields.
Why is There a Talent Shortage?
There are myriad factors that can affect talent availability and employment in different countries — changing demographics, public policies, wages, supply and demand, and the education system, to name a few. The workforce and talent pipeline trend we're seeing today is threefold:
- Older Generations Are Leaving the Workforce - According to Pew Research, Baby Boomers — people born between 1946 and 1964 — make up about one-third of the workforce, and most of them are retiring or plan to retire in the next decade. This issue has only been exacerbated by the COVID-19 pandemic. In the third quarter of 2020, nearly 30 million Baby Boomers were forced into retirement, leaving a large and unexpected gap in the skilled labor pool.
- Younger Generations Aren't Prepared to Take Over - While Millennials make up the largest population group, many still lack the managerial experience or skills necessary to fill the vacant spots left by their older counterparts. Furthermore, in a 2012 McKinsey & Co. study of employers, students and educators, employers and students both believed that today’s young people are inadequately prepared for the workforce. As more millennials transition into leadership and in-demand roles, many are thriving and many are facing a steep learning curve. Employers have to compete for the ones who are ready to lead.
- Changing Needs and Expectations - The technologies of the Fourth Industrial Revolution are rapidly and dramatically changing many aspects of work as we knew it. It's also requiring workers to have new, highly-specialized talents and skills. Additionally, worker expectations are changing and they expect better pay, more flexibility, better work-life balance, remote-work options and changes in the way companies measure productivity. And these expectations have only increased over the course of the pandemic.
What Can Students and Professionals Do?
Whether you're a student who hasn't entered the talent market or a professional looking to switch career paths, you need to develop the right technical and soft skills.
According to ManpowerGroup, the most in-demand technical skills include:
- Operations and Logistics
- Manufacturing and Production
- Front Office and Customer Facing
- Administration and Office Support
- Sales and Marketing
The most in-demand soft skills include:
- Resilience, stress tolerance and adaptability
- Critical thinking and analysis
- Reasoning and problem-solving
- Collaboration and teamwork
- Creativity and originality
These are the most in-demand skills in 2021 and cultivating them will help you get and maintain a job. But as our world continues to grow and evolve at a rapid pace, it's most important to be a lifelong learner. “Constant learning—driven by both workers and organizations—will be central to the future of work, extending far beyond the traditional definition of learning and development," says Jean-Marc Laouchez, president of the Korn Ferry Institute.
It used to be that once school was done, people moved into their careers and that was it. However, this way of thinking does not equate to success today or in the future. Continual learning is a pillar of a Thunderbird education and we offer many continuing education options for students and executives — online courses, in-person courses, webinars, and certifications.
What Can Organizations Do?
Evolve. Organizations that want to succeed and close the talent gap need to evolve with the times. Younger generations not only expect more from their employers, they're also willing to take their talent elsewhere if these expectations aren't being met.
Here are a few things organizations can do to solve the talent shortage:
- Reskill and Upskill Employees - It's much easier and cheaper to reskill or upskill existing employees than it is to hire new talent to fill a skills gap. The World Economic Forum estimates that it costs roughly $4,425 to hire a new full-time employee, and the Association for Talent Development has found that upskilling an existing employee costs about $1,300. A few things you can do to foster this growth are identify and build the skills necessary to your business model, launch training programs, utilize peer mentoring, and encourage continual learning in your company culture.
- Give Your Employees What They Want - What do they want? Flexibility, higher wages, remote work! When do they want it? Now! Worker desires and expectations are changing, so do what you can to meet those needs. It's good for them and it's good for the company. Many studies show that employees are more productive and engaged when they are happy, so attract and retain the best by finding ways to give employees some things that are important to them.
- Reimagine How You Measure Productivity - Employees want their productivity to be measured by the quality of their work, not the quantity. Wherever possible, give your skilled workers the space, trust and flexibility they need to provide the highest quality work.
- Change Your Recruiting and Hiring Strategies - The talent acquisition strategies that worked in the past might not serve you well today. Revamp your job postings, hire for transferable skills, work with a data-driven recruiting agency, or create an employee referral program. All of these things could help your chances of filling those vacancies long-term.
- Work with Thunderbird Career Management Services - You are looking for skilled talent and we've got it. Each year, we graduate hundreds of students who are equipped with the technical and soft skills necessary for the challenges and opportunities of the Fourth Industrial Revolution. We've partnered with companies such as American Express, Boeing, Dignity Health and many others to help them find the right T-birds for the job.
Facing a shortage of talent can be worrisome, but these are some things that both companies and workers can do to navigate through disruption and challenging times.