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World – Korn Ferry report says talent shortage could ‘debilitate’ key markets and sectors worldwide

02 May 2018

A global talent crisis could cost nations trillions of dollars in unrealized annual revenues, according to the “Global Talent Crunch” study released by executive search firm Korn Ferry International Inc. (NYSE: KFY). Already a major issue, skilled talent shortages will continue to impede global growth and if not addressed, could have a significant impact on major economies by 2030, according to the report.

The study estimates the gap between future talent supply and demand in 20 major economies at three milestones: 2020, 2025 and 2030, and across three sectors: financial and business services; technology, media and telecommunications; and manufacturing. It found that left to run its course, this shortage will create 85.2 million unfilled jobs and nearly $8.5 trillion in unrealized revenue in the economies analyzed.

The talent shortage crisis could undermine market dominance within sectors:

  • Labor shortages in financial and business services are the most severe with a potential deficit of 10.7 million workers globally by 2030, which could cause the sector to lose out on annual revenues of US$1.3 trillion.
  • Technological advancement across all sectors of the economy could be hindered by an acute global labor shortage of 4.3 million technology, media and telecommunications workers by 2030.
  • Manufacturing is facing a talent deficit crisis of 7.9 million workers globally by 2030, despite being the only sector with a surplus of highly skilled workers in 2020.

By 2030, the report expects a talent deficit of 85.2 million workers across the economies analyzed. The shortfall of Level A workers could equal 21% of the highly skilled workforce of the 20 countries in the study. India is the only economy in the study maintaining a talent surplus in 2025 and 2030, driven by a burgeoning working-age population. This global skills shortage could result in US$8.452 trillion in unrealized annual revenue by 2030.

The study also found a sizable mismatch between supply of available workers and business demand at country level. Developed markets will be hardest hit by imminent talent shortages. Australia, France, Germany, Japan and the US face the largest threat, with a combined opportunity cost of US$1.876 trillion in annual revenues by 2020.

“The world can’t afford to have tens of millions of unfilled jobs and trillions of dollars in unrealized revenue,” said Alan Guarino, vice chairman, Korn Ferry CEO and board services. “Companies must work to mitigate this potential talent crisis now to protect their future. If nothing is done, this shortage will debilitate the growth of key global markets and sectors.”

The study is based on economic modeling designed by Korn Ferry, consulting firm Man Bites Dog and Oxford Analytica, and executed by Oxford Analytica.

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