The global economy created 40M formal sector jobs in 2006
Employment intentions vary.
Employers in Asia and the Americas are the most upbeat
European employers are more careful
10-15% of European employers plan to increase staff
75-85% plan no changes
Increase Decrease No change Don’t know France Netherl Belgium Italy Germany Austria UK Sweden Ireland Norway Costa R Taiwan China Hong K US Canada Mexico India N Zealand S Africa Australia Argentina Japan Peru Singapore Switzerl Spain 0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100% Employers’ hiring intentions, 2q 2007 Source: Manpower Inc.
Manpower Professional Survey 2006 Of 32,000 employers surveyed in 26 countries and territories, 29% said they would have hired more professional staff if candidates had had the necessary skills. 33% of employers in India said they would have hired more permanent professional staff if they could have found candidates with the right skills .
2008 Manpower Talent Shortage Survey 1. Skilled Manual Trades. 2. Sales Representatives. 3. Technicians. 4. Engineers. 5. Management/Executives. 6. Laborers. 7. Administrative positions. 8. Drivers. 9. Accounting & Finance staff. 10. Machinists/Machine Operators. Total Number of Respondents: 42,585 Employers indicating difficulty filling positions: 31% Employers indicating no difficulty filling positions: 69% Margin of error: +/- 3.9% GLOBAL 31 % of employers worldwide are having difficulty filling positions due to the lack of suitable talent available
2008 Manpower Talent Shortage Survey 1. Technicians. 2. Sales Representative. 3. Management/Executives. 4. Sales Managers. 5. Machinists/Machine operators. 6. Engineers. 7. Production Operators. 8. Skilled Manual Trades. 9. Laborers. 10. Restaurant & Hotel Staff. Total Number of Respondents: 3,900 Employers indicating difficulty filling positions: 15% Employers indicating no difficulty filling positions: 85% Margin of error: +/- 1.6% CHINA 15 % of employers in China are having difficulty filling positions due to the lack of suitable talent available
LATAM: Employers having the most difficulty finding the right people to fill jobs are those in Costa Rica (34%) and Argentina (36%)
Skilled Manual Trades.
Skilled Manual Trades.
Accounting & Finance Staff.
Costa Rica Argentina Source: 2008 Manpower Talent Shortage Survey 2008 Manpower Talent Shortage Survey
WHAT’S DRIVING THE TALENT SHORTAGE?
Productivity, services and jobs.
for every manufacturing job lost, ten service jobs have been added.
Number of non-farm jobs, US thousands Source:Barbara Hagenbaugh, USA TODAY,12.12.2002
Source: McKinsey Global Institute
Productivity, services and jobs.
for every manufacturing job lost, ten service jobs have been added.
1.46 billion service jobs worldwide.
160 million could theoretically be offshored.
Estimated to reach 4.1 million in 2008.
% of jobs
“ As companies shift more sophisticated activities to these (low-cost emerging) markets, they are fighting over a much smaller pool of highly skilled workers to staff these operations. As a result, both labor costs and turnover among highly skilled workers are increasing rapidly, making retention ever more difficult.” Source: Innovation in Emerging Markets: 2007 Annual Study. Deloitte Touche Tohmatsu, January 2007 Image source: Getty images Economic Development
Also developing countries experience job offshoring.
Whilst Mexico lost 7% of its share of US apparel imports.
… China gained 19%.
… and Cambodia and Vietnam entered the game.
US APPAREL IMPORTS 1989-2006 (% OF TOTAL APPAREL IMPORTS IN THE US) Source: OTEXA data Cambodia Vietnam Mexico China
Emerging markets face a huge skill gap in moving into higher value services
13% of university graduates meet expectations of global business
High staff turnover rates
Those with skills are in high demand
… and wages are rapidly pushed up
Up more than 20% per year in India’s software industry
3.1 m university graduates per year (2005)
Young professionals with 7 years of working experience, 8.5 m (2003), incl. 1.6 m engineers
600’000 engineering graduates per year
Only 1 out of 10 suitable to work at a multinational firm
Young engineers who would today qualify for work at a multinational company: 160’000
75,000 leaders who can work in global environments will be needed
in 2005 they had only 3,000 to 5,000.
Approximately 3m university graduates per year
Pool of university graduates: 22m (2003)
Only 25% of engineering graduates and 10-15% of other university graduates are suitable for work in the IT sector
Possible labour deficit (IT sector): 500’000 in 2010
Turnover rate: 40%
Wage inflation: 20-25%
Unemployment rate of university graduates: 17.2%
Possibly up to 40% of all university graduates are not productively employed
Fast growing economies with huge labour pools developing rapidly into high end of the services market – with huge labour pools but wrong skills *Source: Deutsche Bank; Tamara Trinh, Alpbach, Aug 30, 2006 McKinsey Global Institute
The number of university graduates will increase by 22 percent in 2006 to 4.1 million.
The national literacy rate in China is 91 percent among people aged 15 and over.
And workers now entering the labor force will have had a minimum of nine years’ compulsory schooling.
Is it really that bad in China?
90 percent of the world’s top 500 multinationals have now invested in China but for China to fuel its current growth levels, it needs to develop internally the same level of talent in seven years that exists now in the UK and France. Image source: Getty images
The Growing Pain – Talent Shortage Source: 2004 survey, American Chamber of Commerce in Shanghai, along with six other Chambers of Commerce Large candidate pool, still growing. Flat wages due to fierce competition for jobs. Entry Level White Collar Workers Emerging shortage in supply over last 2 years. Shortage mainly in coastal cities. Rapidly increasing wages. Blue Collar Workers Growing candidate pool. Demand outstrips supply. Stiff competition among companies - may ease in 6-8 years. Mid-Level Managers Severe shortage - 40% of employers indicate difficulty to fill Senior Manager positions. More difficult and more expensive in future. Senior Managers
Fast growing economies with huge labour pools developing rapidly into high end of the services market – with huge labour pools but wrong skills
Offshoring will be a two way street – Jobs are going where people are
EU and US will become recipients
Labour markets will be truly global – People are going where jobs are
ICT makes global work organizations a reality
Access to tacit knowledge frames how we work – technology will break the barriers
The global war for talent is getting tighter
Offshoring will be a two way street
All the Bangalore tigers have set up development centres in China
Indian companies have actively invested in all of Europe
Infosys provides BPO and IT services to international clients from its facilities in the Czech Republic, London, Germany and Mauritius in more 20 languages
Wipro operates under the Norwich Union brand in the UK
Wipro’s Wireless Solutions Unit operates out of Finland
TCS has moved its insurance outsourcing operations to the UK
Labour markets will be truly global
India’s expanding aviation industry employs 350 pilots from the West
Online customer service in India employs young Europeans recruited in their home countries
Over 50Kexpatriates work in India
Infosys gets 98% of our revenues from outside India
employs 300 Americans – in India
Large numbers fr UK planned in 2007
126 Americans from leading US universities in training at Infosys’ Mysore campus
Finance workers unions from around the Asia-Pacific region and India are coordinating action
against moving jobs to less regulated places
The global war for talent is getting tighter early signs
A declining workforce Source: Eurostat and UN Population Division
An ageing and declining workforce Source: U.S. Census Bureau/ Caden Corp.
European employers will be dealing with increasingly older staff; in the next 9 years:
At the same time there will be less young people to chose from:
This is exacerbated by a declining indigenous workforce of about 4%.
The aging workforce conundrum is that the older employees who have the talent companies most need to retain are those who have the financial flexibility and employment options to retire or downshift to a more flexible work arrangement.
Savvy employers will develop innovative ways of retaining these critically important contributors as long as possible.
Understanding and Engaging Older Workers The key to older worker engagement is to focus on the same issues that are important to other age groups
Net immigration flows Net emigration countries Net immigration countries annual average 95-00 Source: United Nations (2002) Annual net number of migrants, 2005-2015 (‘000) 1,330 748 -329 -647 -1,194 N America Europe Africa Latin America Asia Source: UN UN definition of regions Migration
Mexicans/Hispanics into the US. East European Union workers to the UK. Indians/Pakistanis into the UAE. Pakistanis into Malaysia. Anyone with skills into Singapore. Koreans into Japan. Polish into Germany. Africans into Europe. Migration
Global Competition Image source: Getty images The dynamic nature of society is making it more complex for employers to manage their workforces, ensuring that they have the right skill sets available, for the right jobs, at the right time.
Four-year degree Isolated Tailored programmes One-size fits all Global Cost Industrial Economy Knowledge Economy The Knowledge Economy Virtual learning communities Forty-year degree ROI Local
How to survive the Talent Crunch of tomorrow
A talent shortage can be addressed by reducing the demand for talent or increasing the supply, or even both.
This means reducing the number of jobs for which talent is in short supply and/or tapping into previously untapped potential in order to increase the total available pool of employable talent.
Winning in the Future of Work Reduce demand, increase supply
Optimizing Talent Flow
Joint responsibility for the future of education, skills and learning lies with:
To implement work training programs, equipping the workforce with ‘soft skills’ that are increasingly in demand in today’s flatter organizational structures.
To develop educational tools and systems to meet the needs of the knowledge economy and equip the workforce with core portable skills such as team work, problem solving, information computer technology skills etc.
- Employees need to embrace lifelong learning. This involves an attitudinal shift.
Developing world will continue to claim its stake in the global economy.
will be good for world GDP growth
will effect an inflation reduction on manufactured products
more consumers coming on-stream
increased demand for finite resources
upward pressure on energy, raw materials, foodstuff prices
Seven assertions – 1.
Seven assertions – 2.
Pressures for labour market reform in Europe will continue to build up.
Its labour markets underperform compared to the US and Asia
It loses global market share and forfeits economic growth opportunity
The notion of security will build more on availability of jobs and access to new opportunities
the longer and deeper Europe goes in the wrong direction, the more painful the reform is going to be
the risk is real if the current positive trends are interpreted that no reforms are needed
Seven assertions – 3.
The location of jobs that can be moved is continuously challenged.
the mobile job market will continue to grow
technology will continuously increase the offshoring potential of jobs
developing countries continue to move to higher value services
huge need to overhaul skill systems
the most important factor for location will be availability of skills
EU/US will become recipients of offshoring (if they have the right skills)
Seven assertions – 4.
The jobs that cannot be moved will be subjected to three forces:
demographics and indigenously available labour to fill jobs
upward cost pressure due to scarcity of labour supply
application of technological developments
changing the nature of the job and the skill requirement for it
immigration will mitigate upward cost pressures in labour markets
Seven assertions – 5.
The practice of global work organizations will increase and change.
technological advances will break down barriers for tacit interaction
a more technology savvy new generation with greater tolerance for ICT shortcomings
the way we look at team and people management will change
broader geographical boundaries of tacit interaction
greater workforce diversity
Seven assertions – 6.
Demography will force a rethinking of policies and regulations.
to ensure labour supply government policies will:
the rethinking process will start from addressing illegal immigration
encourage longer working lives
facilitate reconciling of private and professional lives
governments will manage budgets
entitlements will be reduced
companies will rethink talent strategies
older workers’ retention and recruitment strategies
global mechanisms to access talent
talent retention – internal flexibility for multiple skills specific to one company
access to talent – external flexibility for specific skills for multiple enterprises
Seven assertions – 7.
Skill development systems need to respond to changing workforce demographics and the challenges of skill development, re-skilling and up-skilling.