By 2030, McKinsey Global Institute estimates that up to 800 million jobs will be displaced by robotic automation. Coupled to that is the unprecedented rise in unemployment caused by COVID-19. According to the International Labour Organisation, global unemployment increased by 33 million in 2020 alone.
With such shocking statistics you’d be forgiven for thinking we’re awash with skilled individuals desperate to get back into work. The actual picture couldn’t be more different, and the war for talent a term first coined by McKinsey’s Steven Hankin back in 1997 is far from over. In fact it is rapidly picking up pace and a study by Korn Ferry found that more than 85 million jobs could go unfilled by 2030. According to a recent survey by ManpowerGroup attracting and retaining skilled workers has rarely been so challenging and 54% of companies globally now report talent shortages – the highest in over a decade.
The situation can be explained in part through basic demography. Birth rates are falling across the globe and by the end of the century nearly every country could have a shrinking population. To put this into context, in 1950 women were having an average of 4.7 children in their lifetime. By 2017 this had nearly halved to 2.4, and by 2100 the University of Washington’s Institute for Health Metrics and Evaluation predict it will fall below 1.7.
In parallel, populations are aging with as many people turning 80 as there are being born. In the US, the majority of baby boomers will have retired by 2030, yet the younger generations will not have had time to acquire the skills and experience necessary to backfill the many high-skilled jobs left behind.
The issue is being amplified by the level of demand being placed on roles requiring higher cognitive skills, social and emotional skills and technological skills. Indeed, demand for occupations such as managers, technology specialists and health care professionals is set to rise by nearly 20% by 2030, while demand for administrative and manual roles will decline just as steeply with the rapid adoption of automation and AI.
COVID-19 has done nothing but accelerate this shift in skill demand and further polarised the global job market. Many low skilled, manual jobs are unlikely to return, while companies are struggling to acquire talent with necessary digital, leadership, communication and decision-making skills. Furthermore, the rapid adoption of remote working has made many more roles location agnostic. Talent doesn’t recognise borders and organisations increasingly need to shield their current expertise from competitors worldwide. With a list of companies globally to choose from, the rapidly shrinking global talent pool is firmly in the driving seat.
Back in 2019 winning the war on talent wasn’t easy. Over a year later the post-pandemic world will make it harder still. To have any chance of winning, organisations must act fast and prioritise their people strategy. But rather than spending millions to charge directly onto the battlefield and acquire new talent, a better approach, as highlighted by a recent Harvard Business Review article, is to invest in the talent that’s already in place. As the author highlights “Poach-and-release is no longer a sustainable model for talent acquisition.” Leaders that place more emphasis on the retention and upskilling of their existing workforce will reap the benefits whilst those left on the battlefield will likely suffer long lasting wounds.
