The words ‘talent shortage’ may be music to the ears of an up-and-coming workforce, but they probably scare the bejesus out of most business owners. Afterall, you’re only as good as the people who work for you.
And when a country-by-country analysis of resources by Korn Ferry reveals that by 2030 there will be a global talent shortage of more than 85 million people (a little more than the entire population of Germany) it’s downright terrifying. Especially when you realise it equates to $8.5 trillion in unrealised annual revenues.
Why is the world running out of skilled resources?
To paraphrase Korn Ferry, most of the shortages will be determined by simple demography. For example, Japan and many European nations, have had low birth rates for decades. Whereas in the US, the majority of baby boomers will no longer be working by 2030. And the following generations will not have had the time or training to take many of the high-skilled jobs left behind.
But don’t we have AI to rely on?
You’d think that AI, blockchain and robotics would fill the skills gap, right?
Well no. Because along with the adoption of advanced technologies comes the need for advanced skills to use them.
A recent EY report, Stop talking about the future of work, states that ‘the proportion of Australian and New Zealand organisations prioritising investment in artificial intelligence (AI) over the next three years is expected to double – a leading indicator of the accelerating momentum towards job disruption’.
The World Economic Forum’s Future of Jobs Report 2018 anticipates that, by 2022 (yes, next year!), at least 54% cent of all employees will require significant reskilling and upskilling. However, based on EY figures, 62% of workers themselves are ill-prepared to adopt emerging technologies and fail to understand the impact of technology on their employment opportunities.
Looking beyond AI
But it’s not just workers who are being short-sighted. It seems that employers are also burying their heads in the sand.
A 2018 survey by Mercer Marsh Benefits and the Human Resources Institute of New Zealand reports that while almost half of Kiwi businesses view the talent shortage as a risk – they aren’t gearing up to do much about it. Instead, 92% of them are still placing a priority on attracting and retaining talent.
EY’s report also says that only 8% of leaders are making upskilling their current people their number one priority. As for the rest? It seems that most New Zealand businesses have blind faith in the ability of the market to magically deliver them the capabilities they require, despite the imbalance between digital skills and available digital practitioners.
The fight for the diminishing talent pool
The NZ Ministry of Business, Innovation and Employment Quarterly Labour Market Report from June 2020 says that we lost a further 17,000 workers from our labour force.
While this was a turbulent period due to COVID-19, this number was over and above those newly unemployed, and follows the trend from 2019 with overall net migration slowing (obviously), and an increase in the numbers of baby-boomers retiring.
In effect, we, like Japan, have fewer skilled people to fill the roles we need filled. So where do you look next?
Generate your own talent pool
Just as new technologies will eliminate some jobs, they will also create a raft of new job opportunities which Simplilearn say will include body part makers (who will create living body parts for athletes and soldiers) through to highway controllers (who will monitor automated road and air space management systems to ensure no errors occur).
Since it’s difficult and expensive for businesses to hire the people they need (after all, it’s not every day you come across a body part maker), all employers - unless they have very deep recruitment pockets - must take a strategic approach to invest in their current workforce.
While training employees to take on new roles requires a considerable time and money investment, it’s also likely to be far less expensive than finding someone ‘off the rack’. And of course, the positive impact of training on employee retention is already well documented.
Winning the war
Not only does investing in internal training allow you to avoid recruitment, but it recognises the potential of your current employees, pre-empts competitor poaching, and reinforces your business reputation as a desirable employer.
And importantly, it sends a clear message that while the future is the province of the bold and brave, you want to go there together – with people you value and trust to fight for and with you.
Or in the words of Sun Tzu (author of The Art of War and employee engagement guru): “Treat your men as you would your own beloved sons. And they will follow you into the deepest valley.”