Global Shortage of Skilled Workers

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Report on the Global Shortage of Skilled Workers September 2013
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Where in the world are the skilled workers? Browse this report to see where the global economy is experiencing a skilled labor shortage, the key drivers behind the lack of skilled workers and its impact across various industries.

Transcript of Global Shortage of Skilled Workers

Page 1: Global Shortage of Skilled Workers

Report on the Global Shortage of Skilled Workers

September 2013

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§  Skills  in  Shortage  

§  Global  Impact  of  Skill  Shortages  

§  Drivers  Propelling  the  Skill  Shortages  

§  Scenario  in  2020,  and  Steps  Ahead  

§  Solu?ons  Adopted  

§  Key  Ques?ons  to  Consider  

Objective

Shortage  of  skilled  workers  is  prevalent  across  most  countries  as  of  2012.  This  shortage  is  also  on  the  rise,  having  an  impact  on  the  opera=ons  of  companies.  This  is  especially  accurate  for  companies  opera=ng  in  secondary  industries  such  as  manufacturing,  construc=on,  and  mining.  

In  this  report,  The  Smart  Cube  examines  this  shortage  across  several  countries  globally,  its  drivers,  and  its  impacts  across  industries  and  economies  

Contents  

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Most recruiters consider the absence of technical skills as the main driver for skills shortage across a myriad of industries

SKILLS  IN  SHORTAGE  

Job  roles  affected  by  labor  shortage–2012  

Against  the  milieu  of  the  slow-­‐paced  global  economy,  employers  are  experiencing  difficulLes  in  filling  vacancies  due  to  lack  of  qualified  and  employable  workers;  as  the  global  economy  is  recovering,  the  labor  market  is  increasingly  Lghtening  with  acute  shortage  in  the  Asia  Pacific  and  the  Americas  region  

Procurement  

Procurement  has  grown  from  being  the  purchasing  

department  at  companies  to  an  area  of  strategic  importance  

This  has  resulted  in  the  growing  demand  for  logisLcs,  supply  chain,  and  procurement  professionals  globally  

Finance/Accounts  

An  increasing  number  of  firms  are  facing  a  shortage  of  high-­‐skilled  professionals  with  

extensive  financial  knowledge;  there  is  a  shortage  of  locally  

available  talent  in  several  parts  of  the  world  

Engineering  

There  is  a  significant  shortage  of  engineers  globally,  which  directly  impacts  the  ability  of  companies  to  

invest  and  take  up  projects  There  is  also  a  shortage  of  

engineering  leaders  who  can  take  up  management  roles  in  different  

engineering  fields  

IT  

According  to  Hays,  a  leading  recruitment  firm,  informaLon  technology  (IT)  skills,  such  as  JAVA,  .NET,  C++,  are  in  scarce  supply  globally  during  2012–13  The  growing  importance  of  IT  has  resulted  in  the  shortage  of  workers  across  the  band—from  CIOs  to  

programmers,  and  IT  support  staff  

There  is  a  significant  shortage  of  vocaLonally  trained  individuals  to  occupy  roles  such  as  those  of  electricians,  welders,  plumbers,  and,  maintenance  and  repair  

workers,  globally  

Skilled  Trade   Companies  across  industries  face  a  severe  shortage  of  research  and  development  (R&D)  staff;  

R&D  is  intrinsic  to  the  company’s  technological  advancement  and  top  line  performance,  impacLng  

its  compeLLveness  

R&D  

Major  Technical  Skills  in  Shortage  

Source  Hays  Global  Skill  Shortage  Index  (2012)  

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Apart from technical skills, employers believe that skilled labor with adequate soft skills is also in shortage

SKILLS  IN  SHORTAGE  

Job  roles  affected  by  labor  shortage–2012  

Work  Ethics  

Leadership  

Language  CommunicaCon  

Team  Work  

Major  SoD  Skills  in  Shortage  

The  a_tude  of  employees  and  their  lack  of  work  ethics  are  major  concerns  across  companies;  

employees  o`en  lack  in  areas  of  Lmeliness,  willingness  to  work,  and  

other  hygiene  factors  While  this  does  not  directly  impact  the  availability  of  skilled  labor,  it  

certainly  affects  quality  

Employers  find  it  most  difficult  to  fill  leadership  

roles,  such  as  CEOs,  CIOs,  and  Directors;  this  is  especially  true  for  technical  leadership  jobs  in  developing  countries  

Companies  are  coming  across  candidates  who  lack  the  ability  to  work  in  teams  and  senior-­‐level  employees  

who  lack  people  management  skills;  these  skills  affect  the  efficiency  levels  in  organizaLons,  

which  are  ‘must  haves’  for  most  employers  

Many  recruiters  face  a  shortage  of  individuals  with  good  

communicaLon  skills;  this  goes  beyond  language  barriers  and  can  be  observed  in  cases  where  candidates  are  not  fluent  and  coherent  even  in  their  naLve  

languages  

Workers  proficient  and  fluent  in  English  are  scarce  globally—especially  in  countries  where  

English  is  not  the  naLve  language  Apart  from  English,  companies  look  for  individuals  who  can  speak  the  naLve  language  of  the  country  of  operaLon;  this  has  parLcularly  

become  important  with  the  global  movement  of  talent  

Companies  across  industries  are  also  facing  challenges  of  shortage  of  labor  with  so`  skills  such  as  communicaLon,  language,  work  ethics,  and  leadership  

Source  Hays  Global  Skill  Shortage  Index  (2012  

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Secondary industries face the brunt of this shortage; the key skills in shortage globally are skilled trade workers, engineers, technicians, and sales representatives

Source:  Talent  Shortage  Survey  Results’,  Manpower  Group  (2012);  

Notes:    1)  Impact  of  skill  shortage  on  the  primary  industry  has  not  been  assessed,  due  to  the  lack  of  a  defined  entry  level  skill  set  

SKILLS  IN  SHORTAGE  

Intensity  and  Geographic  Spread  of  Key  Skills  that  are  in  Shortage–2012  

High-­‐skilled  Workers   AYained  ter?ary  educa?on  (college  level)  

Medium-­‐skilled  Workers   AYained  some  level  of  post  secondary  educa?on  (professional,  voca?onal  training)  

Low-­‐skilled  Workers   AYained  only  primary,  and  some  level  of  secondary  educa?on  

Secondary  Industries  

Manufacturing  

ConstrucCon  

Oil  &  Gas,  and  Mining  

AutomoCve  

Energy  and  UCliCes  

TerCary  Industries  

IT  

Professional  Services  

Financial  Services  

Travel  &TransportaCon  

All  Industries  

Key  Industries  Impacted  

Geographic  Spread  of  Shortage  

Intensity

 of  S

hortage  

Skilled  Trade  Workers  

Engineers  

Technicians  

AdministraLve  &  Support  Staff  

Managers  &  ExecuLves  

Sales  RepresentaLves  

Laborers  

Drivers  

IT  Staff  

AccounLng  &  Finance  

Low   High  

Low  

High  

Key  Industries  Impacted  

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In Americas and Europe, skill shortages of engineers and skilled trade workers is impacting the manufacturing industry severely

IMPACT  OF  SKILL  SHORTAGE  IN  AMERICAS  AND  EUROPE  

Americas  

Key  Countries  Affected  

Region   DescripCon  Main  Industries  Impacted  

Top  3  Job  Roles  in  Shortage  

Brazil  1.  Technicians  2.  Skilled  Trade  Workers  3.  Engineers  

Oil  and  Gas,  Mining  

§  There  were  only  1.95  engineers  per  10,000  inhabitants  in  Brazil  in  2012  

§  In  the  oil  and  gas,  and  mining  sector,  employers  also  face  shortage  of  geophysicists,  rig  managers,  tool  pushers,  and  experienced  execu?ves  

US  §  According  to  a  joint  report  by  DeloiYe  and  

Manufacturing  Ins?tute  published  in  2012,  5%  of  jobs  (600,000  jobs)  in  the  US  manufacturing  sector  remain  unfilled  due  to  lack  of  skilled  labor  

Manufacturing  1.  Skilled  Trade  Workers  2.  Engineers  3.  IT  Staff  

Europe  

Americas  Outlook  §  Skills  shortage  in  the  Americas  is  likely  to  become  severe  by  2015–16  

―  Shortage  in  the  US  is  expected  to  further  worsen  by  2015  due  to  increasing  re?rements  ―  Countries  such  as  Brazil  will  need  to  invest  in  technical  training  ins?tutes  to  cope  with  the  expected  increase  in  labor  shortage  

Romania  

Bulgaria  

Germany  

Manufacturing  

Manufacturing  

Manufacturing  1.  Skilled  Trade  Workers  2.  Engineers  3.  Sales  Representa?ves  

1.  Engineers  2.  Skilled  Trade  Workers  3.  Sales  Representa?ves  

1.  Engineers  2.  Skilled  Trade  Workers  3.  Management  Execu?ves  

Europe  Outlook  §  Talent  shortage  is  expected  to  worsen  in  Europe  by  2015–16  

―  This  is  mainly  due  to  an  aging  popula?on  in  many  countries;  another  factor  contribu?ng  to  increasing  shortage  is  the  s?gma  associated  with  technical  and  voca?onal  educa?on,  which  dissuades  many  students  from  studying  skilled  trades  

§  Skill  shortage  is  impac?ng  Germany’s  manufacturing  sector;  according  to  the  Federal  Labor  Agency  of  Germany,  the  country  will  face  a  shortage  of  six  million  workers  by  2030  

§  Eastern  European  countries,  such  as  Bulgaria  and  Romania,  face  labor  shortage  ―  There  is  a  skill  shortage  in  Romania  due  to  the  

absence  of  people  with  technical  skills  

―  Employers  cite  lack  of  individuals  with  industry-­‐specific  qualifica?on  as  a  major  reason  

Source:  ‘Talent  Shortage  Survey  Results’,  Manpower  Group  (2012);  ‘Skills  Gap  in  US  Manufacturing’,  DeloiYe  and  Manufacturing  Ins?tute  (2011)  

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Oil and gas, mining, construction, and IT industries are facing severe skill shortages in Asia-Pacific and Africa

IMPACT  OF  SKILL  SHORTAGE  IN  ASIA-­‐PACIFIC  AND  AFRICA    

Asia-­‐Pacific  

Key  Countries  Affected  

Region   DescripCon  Main  Industries  Impacted  

Top  3  Job  Roles  in  Shortage  

Japan  1.  Technicians  2.  Skilled  Trade  Workers  3.  Engineers  

Oil  and  Gas,  Mining  

§  Japan  faces  a  severe  shortage  of  engineers  due  to  declining  enrolments  in  engineering,  followed  by  a  low  birth  rate  in  the  country;  this  is  impac?ng  the  manufacturing  sector,  par?cularly  digital  technology,  automo?ve,  and  steel  

Australia  

Manufacturing  

1.  Skilled  Trade  Workers  2.  Engineers  3.  Sales  Representa?ves  

Asia-­‐Pacific  Outlook  §  Asia  will  require  a  large  pool  of  skilled  workers  and  the  skill  shortage  gap  is  expected  to  widen  ?ll  2015-­‐16  

―  This  will  be  driven  by  strong  growth  in  developing  economies,  warran?ng  the  need  for  skilled  workers;  further,  aging  popula?on  will  also  contribute  to  the  talent  shortage,  along  with  low  employability  of  graduates  

§  The  IT  and  professionals  services  industry  is  facing  a  shortage;  according  to  NASSCOM  and  McKinsey,  only  10%  of  IT  graduates  in  India  are  employable  in  the  industry  

Construc?on  

India   IT  

§  Civil  and  mining  engineers,  construc?on  managers,  brick  and  ?le  layers  are  the  toughest  posi?ons  to  fill  ―  Universi?es  are  unable  to  produce  qualified  people  

to  match  the  high  industry  demand  

1.  IT  Staff  2.  Marke?ng  Staff  3.  Engineers  

Africa  §  Skill  shortage  in  Africa  is  equally  distributed  across  countries,  with  a  majority  of  them  facing  a  scarcity  of  quality  workers  

§  As  African  economies  expand,  the  demand  for  skilled  labor  is  expected  to  increase  and  widen  the  skill  gap  

§  The  skill  gap  is  mostly  aYributed  to  the  frail  educa?on  system  and  inadequate  technical  training  in  the  region  

§  According  to  a  survey  conducted  by  the  Na?onal  Employers’  Federa?on  in  2010,  96%  employers  in  Namibia  agreed  that  the  country  had  a  shortage  of  skilled  labor  

§  The  shortage  of  skilled  workforce  is  affec?ng  the  oil  &  gas  sector  in  East  African  countries,  such  as  Uganda,  Tanzania,  and  Kenya  

§  According  to  the  2011  IT  Web-­‐JCSE  Skills  Survey,  an  adverse  impact  of  the  shortage  of  informa?on  and  communica?ons  technology  (ICT)  skills  was  reported  by  66%  of  companies  across  industries  in  Africa    

§  Outlook  for  labor  availability  in  Africa  is  bleak  ?ll  2015–16,  and  companies  will  have  to  resort  to  in-­‐house  training  and  expat  recruitment  in  order  to  fill  vacancies  

Source:  ‘Talent  Shortage  Survey  Results’,  Manpower  Group  (2012);  ‘East  Africa  Skill  Shortages’,  The  Africa  Report  (October  2012)  

Notes:    1)  Skill  shortage  in  Africa  has  not  been  assessed  on  the  same  parameters  as  other  regions,  due  to  lack  of  adequate  informa?on  

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Industry Speak

INDUSTRY  SPEAK  

“The  Hays  Global  Skills  Index  and  report  illustrates  a  major  paradox  in  the  world’s  skilled  labor  markets.  Many  countries  are  suffering  chronically  high  levels  of  unemployment,  yet  employers  are  struggling  to  find  enough  skilled  individuals  to  fill  the  posts  

available.”  –  Alistair  Cox,  Chief  ExecuLve  Officer,  Hays  (2012)  

“As  the  global  recovery  gathers  pace,  cul=va=ng  future  talent  and  allevia=ng  the  shortage  of  skilled  workers  is  becoming  vital  to  ensure  economic  growth.  With  unemployment  high  around  the  world,  migra=on  is  an  emo=ve  subject  but  strategic  migra=on  will  be  necessary  to  create  a  global  workforce  and  alleviate  the  current  shortage.  Countries  should  be  developing  policies,  which  facilitate  posi=ve  migra=on  to  fuel  economic  growth  

through  providing  skilled  workers  where  they  are  needed,  rather  than  crea=ng  barriers  to  immigra=on.”  –  Jeffery  A.  Joerres,  Chief  ExecuLve  Officer,  Manpower  Group  (2010)  

“As  we  move  further  into  recovery  and  business  plan  for  growth,  the  demand  for  people  with  high-­‐quality  skills  and  qualifica=ons  will  intensify.  In  the  future,  people  with  qualifica=ons  in  science  and  math  will  be  par=cularly  sought  aQer,  and  firms  say  it  is  

already  hard  to  find  people  with  the  right  technical  or  engineering  skills.”  –  Richard  Lambert,  Director  General,  ConfederaLon  of  BriLsh  Industry  (2010)  

“Increasing  talent  shortage  in  Asia  Pacific  could  harm  organiza=ons'  innova=on  efforts  as  CIOs  struggle  to  adapt  to  ongoing  technological  change.  Half  of  employers  in  the  region  have  problems  with  skills  shortages.”  –  IDC  Report  on  Growth  of  IT  in  Asia  Pacific  (November  2012)  

“Concerns  about  finding  sufficient  skilled  employees  in  technical  and  engineering  job  func=ons  is  likely  to  grow  in  the  future.”  –  EIU  Survey  on  Skills  Gap  (2012)  

“The  success  of  any  na=onal  or  business  model  for  compe==veness  in  the  future  will  be  placed  less  on  capital  and  much  more  on  talent.  We  could  say  that  the  world  is  moving  from  capitalism  to  ‘talen=sm’.  Talent  grows  businesses  and  economies:  understanding  and  harnessing  talent  mobility  is  now  more  cri=cal  than  ever.  The  talent  crisis  points  out  serious  imbalances  in  human  capital  markets.  On  one  side,  there  are  talent  shortages.  On  the  other,  high  

unemployment  rates  and  employability  challenges  slow  down  economies  and  threaten  future  growth  across  the  globe.  The  new  “Millennial”  genera=on  is  calling  for  a  change.  At  the  same  =me,  talent  is  landing  at  the  top  of  CEOs’  agendas.”—  Klaus  Schwab,  Founder  and  ExecuLve  Chairman,  World  Economic  

Forum  (2011)  

"Foreign  direct  investment  (FDI),  and  the  projected  increase  in  FDI  into  Africa,  will  mop  up  talent.  The  demand  for  talent  in  Africa  is  going  to  outstrip  supply.  As  a  result  of  the  higher  demand  for  talent,  the  price  of  talent  is  going  to  go  up,  and  it  is  going  to  con=nue  to  go  up,  for  as  long  as  there  is  a  skills  

shortage.”—Ray  Harraway,  Tax  Human  Capital  Director  at  Ernst  &  Young  Africa  (March  2012)  

Source:  ‘Manpower  Suggests  Strategic  Migra?on,  Promo?ng  Skilled  Trades  Key  to  Plugging  Talent  Gap’,  Manpower  Group  Press  Release  (August  2010)    

Notes:    1)  Images  have  been  sourced  from  secondary  sources  including  scienceonline.com  

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The shortage of skilled labor is resulting in supply-demand mismatch, primarily due to lack of responsiveness of the education system to the needs of labor market

DRIVERS  –  SKILL  SHORTAGE  

Mismatch  between  skill  demanded  and  

supplied  

Paradox  for  policy  makers—

high  unemployment  despite  shortage  of  skilled  labor  

Industrial  sectors  such  as  construcLon,  

manufacturing,  and  mining  have  been  parLcularly  

affected  

Global  Shortage  of  

Skilled  Workers  

Aging  PopulaCon  

Demand  Outpacing  Supply  

Low  employability  of  Graduates  Ke

y  Factors  Impa

cLng

 Sho

rtag

e  

Very  High  

High  

Medium  

Low  

Very  Low  

Impact  on  Labor  Shortage:  

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Aging population worldwide is having a severe impact on the size of labor force across the globe

DRIVERS  –  SKILL  SHORTAGE  

§  Aging  popula?on  is  affec?ng  the  labor  availability  in  many  countries,  and  this  is  likely  to  con?nue  over  the  next  decades  

§  According  to  a  UN  Report  published  in  2012,  by  2050,  the  popula?on  aged  60  and  above  will  outnumber  the  popula?on  aged  15  and  below  

§  Aging  popula?on  and  increasing  re?rements  are  affec?ng  many  developed  countries  including  the  US,  the  UK,  and  Japan  

§  There  are  approximately  about  810  million  individuals  aged  above  60  as  of  2012  and  this  is  projected  to  increase  over  2  billion  by  2050  

§  As  of  2012,  one  out  of  every  nine  individual  is  aged  60  years  or  above,  while  by  2050,  one  out  of  every  five  is  likely  to  be  in  that  age  group  

§  In  2012,  the  propor?on  of  older  individuals  (aged  above  60)  who  are  economically  ac?ve  is  higher  in  the  less  developed  regions  (50%  among  men  and  22%  among  women)  than  in  the  more  developed  regions  (26%  among  men  and  15%  among  women)  

§  Older  individuals  in  the  less  developed  regions  work  un?l  more  advanced  ages  (above  60)  largely  due  to  the  limited  coverage  of  social  security  schemes,  as  well  as  low  pension  values  received  by  those  who  are  covered  

   Key  Factors  Impac?ng  Shortage  

Aging  PopulaCon  

55.7%  

67.9%   68.0%  66.2%   66.6%   65.7%  

58.6%  

67.8%  64.0%  

67.4%  

62.2%  64.3%  63.0%   63.4%  

57.9%  

63.6%  60.3%  

62.9%  

Africa   Asia   Europe   La?n  America  and  the  Caribbean  

North  America   Oceania  

2012   2025   2050  

Percentage  of  PopulaCon  Aged  Between  15  and  64  Years,  2012–2050  

Source:  UN  

Source:  ‘Ageing  in  the  Twenty-­‐first  Century:  A  Celebra?on  and  a  Challenge’,  UNFPA  (October  2012);  Department  of  Educa?on,  Australia  (2012)  

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Low employability of graduates and demand outpacing supply are the key factors driving the global shortage of skilled workers

DRIVERS  –  SKILL  SHORTAGE  

Source:  ‘Talent  Shortage  Survey  Results’,  Manpower  Group  (2012)  

Demand  Outpacing  Supply  

§  One  of  the  main  drivers  of  skill  shortage  globally  is  the  lack  of  a  link  between  what  is  taught  in  schools  and  what  is  needed  by  at  the  job  front,  which  leads  to  high  levels  of  unemployment    

§  In  many  countries  the  educa?on  system  only  provides  theore?cal  knowledge  and  students  are  onen  not  equipped  with  requisite  job  skills  

§  Further,  the  curricula  is  onen  out-­‐dated,  and  students  have  no  present  day  relevant  knowledge;  this  is  par?cularly  true  for  technical  professions  and  low  quality  of  teaching  is  also  prevalent  in  many  ins?tutes  

§  The  lack  of  employability  skills  also  contributes  to  the  difficulty  faced  by  employers  to  fill  vacancies  

§  In  many  cases  the  labor  shortage  experienced  in  a  field  is  not  due  to  the  shortage  of  adequate  personnel,  but  due  to  their  low  quality  and  employability;  employers  find  candidates  lacking  generic  skills  such  as  communica?on,  team  work,  and  ?meliness  

§  Employability  of  fresh  graduates  is  a  major  concern  in  certain  Asian  and  African  countries;  according  to  an  annual  employers’  survey  conducted  by  Manpower  Group  in  2012,  28%  of  employers  in  Asia  stated  that  low  employability  is  a  problem  within  the  region  

   Key  Factors  Impac?ng  Shortage  

Low  Employability  of  Graduates  

§  In  many  parts  of  the  world,  the  demand  for  skilled  labor  is  growing  at  a  rate,  which  is  outpacing  the  labor  supply  growth  

§  Increasing  demand  is  based  on  increased  investments  in  projects  and  growth  in  various  sectors  

§  IT,  oil  and  gas,  and  mining  industries  in  Australia  are  witnessing  high  levels  of  growth  and  in  turn  are  demanding  skilled  labor;  the  growth  of  the  labor  market  however,  is  not  able  to  match  the  total  demand  

§  According  to  the  American  Society  of  Engineering  Educa?on,  as  of  2012,  the  US  needs  to  graduate  10,000  addi?onal  engineers  every  year  to  keep  pace  with  the  demand  

40%   41%  31%   30%   31%   34%   34%  

2006   2007   2008   2009   2010   2011   2012  

Companies  Facing  Difficulty  Filling  Jobs  Globally1,  2006–2012  

Source:  ManPowerGroup  Survey  (2012)  

Notes:    1)  This  has  been  sourced  from  a  survey  conducted  by  ManpowerGroup  in  2012  with  38,000  employers  

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Globally, a shortage of high- and medium-skilled workers, and a surplus of low-skilled workers is expected by 2020; this represents a training and development opportunity

SCENARIO  2020  

Source:  ‘The  World  at  Work:  Jobs,  Pay  and  Skills  for  3.5  billion  people’,  Mc  Kinsey  Global  Ins?tute  (June  2012)  

§  Mostly  high-­‐  and  medium-­‐skilled  workers  are  in  short  supply  globally  as  of  2012  

§  According  to  McKinsey  Global  Ins?tute,  by  2020,  there  will  be  a  13%  shortage  of  college-­‐educated  or  high-­‐skilled  individuals  globally  

§  Shortage  of  high-­‐skilled  workers  will  be  most  prevalent  in  developing  economies,  with  about  50%  of  the  shortage  in  China  alone,  in  2020  

§  The  expected  shortage  of  medium-­‐skilled  workers  (secondary  educated)  is  about  15%  by  2020  

§  Most  of  this  shortage  is  expected  in  developing  and  labor-­‐intensive  economies  of  South  Asia  and  Africa  

§  However,  by  2020,  there  is  likely  to  be  a  surplus  of  low-­‐skilled  workers,  largely  in  the  developing  countries  

§  Most  of  the  excess  supply  of  low-­‐skilled  workers  is  expected  in  India  and  other  developing  countries  

§  While  the  shortage  of  skilled  manpower  in  developing  countries  can  be  overcome  by  improving  the  educa?on  system,  the  problem  in  developed  na?ons  will  be  more  difficult  to  tackle—as  it  is  mostly  not  the  educa?on,  but  the  demographics  that  leads  to  the  shortage    

40   45  

-­‐94  

High-­‐skilled  Workers  

Medium-­‐skilled  Workers  

Low-­‐skilled  Workers  

Global  Deficit  of  Skilled  Workers    In  millions,  2020  

Source:  The  World  at  Work,  McKinsey  Global  Ins?tute,  June  2012    

85  Million  

Global  Shortage  of  Skilled  Workers  in  2020  

What  will  be  the  shortage  of  skilled  workers  in  2020?  

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The availability of skilled labor in some of the prominent countries is unlikely to change drastically in the decade ending in 2020

STEPS  AHEAD  ?  

Source:  World  Bank  Educa?on  Sta?s?cs    

Availability  of  Skilled  Labor–2010   Availability  of  Skilled  Labor–2020  

%  Of  Labor  Force  with  College  EducaCon  

Size  of  Lab

or  Force  

5   10   15   20   25   30  

800  

0  

500  

150  

100  

50  

China  

India  

Brazil  

US  

UK  

Germany  

Australia  

Japan  

Kenya  

Romania  

Size  of  Lab

or  Force  

5   10   15   20   25   30  

800  

0  

500  

150  

100  

50  

%  Of  Labor  Force  with  College  EducaCon  

China  

India  

Brazil  

US  

UK  Germany  

Australia  

Japan  

Kenya  

Romania  

Although  the  size  of  labor  force  and  level  of  educa=on  are  set  to  improve,  countries  are  not  likely  to  undergo  a  major  systemic  change  

This  possible  scenario  in  2020,  and  its  lack  of  progress  from  the  present  scenario,  poses  a  serious  ques=on  for  the  decision  makers  today  regarding  the  steps  that  need  to  be  taken  to  tackle  this  

shortage  over  the  next  decade  

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Governments are focusing on education, training and development, and policy related changes to tackle the talent shortage

SOLUTIONS  ADOPTED  

Source:  Department  of  Educa?on,  UK,  ‘Immigra?on  rules  aim  to  ease  skill  shortage  in  Germany’,  Business  Day  Live  (February  2013)  

§  The  UK  has  a  severe  shortage  of  skilled  labor,  primarily  engineers  and  technicians  

§  In  May  2012,  the  UK  government  approved  opening  of  15  University  Technical  Colleges  (UTCs)  across  the  country  during  2013–15  

§  UTCs  are  designed  to  meet  the  shorqall  of  engineers  and  technicians  by  offering  students  a  high-­‐quality,  technical  educa?on,  which  can  lead  to  appren?ceships  and  higher  degrees  

§  Once  the  15  UTCs  are  set  up,  the  UK  will  have  a  na?onal  network  of  34  UTCs  

§  In  October  2012,  the  UK  government  announced  a  scholarship  program  to  aYract  top  graduates  to  train  as  teachers  for  computer  science  programs  

§  The  ini?a?ve  is  aimed  at  improving  the  standard  of  educa?on  and  thus,  crea?ng  a  beYer  pool  of  skilled  labor  

§  The  program  is  backed  by  companies  such  as  Microson,  Facebook,  Bri?sh  Telecom,  and  IBM  to  reduce  the  gap  between  the  educa?on  and  industry  requirements  

§  To  effec?vely  u?lize  its  oil  resources,  Ugandan  government  decided  to  develop  resources  with  strong  background  in  oil  and  gas  within  the  country  

§  The  government  sent  people  abroad  for  training  courses  who  are  now  a  part  of  the  team  leading  their  oil  sector  every  year  

§  Till  2012,  the  government  had  sent  30  people  to  Trinidad  &  Tobago  to  study  oil  and  petroleum  related  courses  

§  The  German  government  is  taking  steps  to  liberalize  immigra?on  laws  to  make  it  easier  for  non-­‐EU  workers  to  find  employment  in  the  country  

§  This  is  being  done  to  overcome  severe  skill  shortages  in  engineering,  train-­‐driving,  electronics,  and  plumbing  jobs;  according  to  OECD,  the  country  will  face  a  shortage  of  5.4  million  workers  with  voca?onal  and  ter?ary  educa?on  by  2025  

§  The  German  Chancellor’s  cabinet  has  passed  new  immigra?on  rules  in  February  2013,  to  reduce  red-­‐tapism,  in  order  to  help  workers  get  their  qualifica?ons  recognized  easily  

Measures  taken  by  the  UK  

Government  

Measures  taken  by  the  Uganda  Government  

Measures  taken  by  the  German  Government  

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Industry players are adopting innovative strategies to tackle the talent shortage across a myriad of industries

SOLUTIONS  ADOPTED  

Source:  Namibia  Ins?tute  of  Mining  Technology;  ‘Queensland  LNG  projects  will  need  imported  labour’,  Reuters  (October  2011);  Department  of  Educa?on,  UK  

Manufacturing  

Case  example—Mazak  (US)  §  Like  most  manufacturing  firms  in  the  US,  Mazak  was  facing  a  

talent  shortage  during  the  last  decade;  however,  instead  of  wai?ng  for  government  to  take  steps,  Mazak’s  leadership  decided  to  take  proac?ve  measures  

§  In  2008,  the  company  started  a  training  campaign  for  entry  level  posi?ons,  which  the  company  calls  ‘Tooling  University’  ―  The  training  program  involves  computer-­‐based,  classroom,  and  

on-­‐the-­‐job  training  with  Mazak  machines  

―  Apart  from  its  own  training  ini?a?ves,  the  company  has  also  collaborated  with  local  community  colleges  to  offer  a  two-­‐year  program  for  appren?ce  engineers  and  machinists  

§  The  company’s  president  sees  this  as  a  remarkable  improvement,  which  has  enabled  them  to  hire  300  individuals  since  2008  

Case  example—Bechtel  (Australia)  §  Bechtel  Australia  was  facing  a  talent  challenge  in  the  country  

in  2011  

§  The  company  reported  that  shortage  of  skilled  labor  nega?vely  impacted  its  revenues  in  2011,  and  that  the  company  will  combat  this  by  hiring  foreign  labor  

§  Riley  Bechtel,  CEO  Bechtel,  stated  that  the  company  will  import  workers  such  as  electricians  and  welders  into  Australia  to  ensure  that  manpower  shortage  did  not  affect  top  line  performance  

ConstrucCon  Case  example—Rossing  and  De  Beers  (Namibia)  §  Namibia  has  a  popula?on  of  2.3  million  as  of  2011,  and  the  

country  faces  a  severe  labor  shortage;  mining  is  a  cri?cal  industry  in  the  country  and  accounted  for  9.5%  of  the  country’s  GDP  in  2011  

§  In  order  to  tackle  the  shortage  of  skilled  voca?onal  workers  in  the  country,  Rossing  Uranium  (Rio  Tinto)  set  up  the  Namibia  Ins?tute  of  Mining  Technology  (NIMT)  in  1991  

―  NIMT  func?ons  as  a  technical  and  voca?onal  ins?tute,  offering  courses  in  mining,  manufacturing,  and  engineering  

§  Further,  in  2007  De  Beers  Namibia  donated  $308,000  to  NIMT  for  its  expansion  plans  

§  The  ins?tute  produces  about  300-­‐500  graduates  annually,  all  of  whom  get  absorbed  in  the  mining  industry  

Oil  and  Gas,  and  Mining  

IT  

Case  example—IBM  (Global)  §  IBM’s  ‘Academic  Ini?a?ve’  program,  provides  educators  free  

resources  to  strengthen  their  curricula  in  fields  such  as  cloud  compu?ng,  informa?on  management,  big  data,  and  NoSQL  databases  

―  The  program  provides  training  material,  curriculum  guides,  sonware,  and  hardware  needed  to  teach  analy?cs  and  informa?on  management  skills  

―  These  courses  train  students  to  occupy  roles  such  as  analy?cs  specialists,  data  scien?sts,  big  data  specialists,  data  and  visualiza?on  specialists  

§  This  was  done  to  bridge  the  skill  demand  and  supply  gap  in  the  IT  industry  globally,  especially  in  the  field  of  big  data  and  analy?cs  

Measures  Taken  by  Companies  

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Your Checklist

SOLUTIONS  ADOPTED  

Below  is  a  list  of  queries  that  senior  execuLves,  decision  makers,  and  managers  globally  should  reflect  on  regarding  the  risk  of  shortage  of  skilled  labor  

§  Are  your  future  talent  needs  impacted  by  the  shortages  experienced  in  the  world?  

§  Do  you  operate  in  geographies  where  there  is  a  skill  shortage?  

§  Do  the  regulaCons  in  the  geographies  allow  you  to  hire  foreign  workers?  

§  What  impact  will  skill  shortage  have  on  your  top  line?  What  are  the  various  steps  your  compeCtors  and  the  industry  are  taking  in  this  regard?  

§  Are  you  taking  the  necessary  steps  to  insulate  your  company  from  this  risk  in  the  long  term?  

Contact  our  strategy  team  to  take  this  forward  and  know  about  our  various  offerings  in  this  space!  [email protected]  

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