Here are some big numbers to start with. According to an analysis by the U.S. Chamber of Commerce, even if every unemployed person in the U.S. were to find a job right now, the country would still have 2.4 million open vacancies. Japan expects a shortage of 11 million workers by 2040. China is anticipating a labor market gap of 11.8 million people per year. And then there’s Europe. By 2050, Europe is expected to see a decrease in its workforce of a staggering 35 million people, which is equivalent to three times the Dutch workforce. This comes after a decline of around 5 million people in the past decade, bringing the total workforce to 264 million.
Europe expects a decrease in its workforce of 35 million people by 2050.
Globally, there will be an overall shortage of about 85.2 million people in the coming years, according to Korn Ferry. Among the 20 largest economies, India is the only one expected to have a talent surplus by 2030. The financial impact of this scarcity amounts to approximately $8.5 trillion (!), which is roughly the combined GDP of Germany and Japan. It is expected that the labor market shortage is already costing the global economy around 1.5% in growth.
The work we want
Had enough of a scare? Then it’s time to look at how organizations are dealing with this. Recently, the World Employment Confederation, a global HR industry association, conducted a global survey among 715 senior executives, supplemented with in-depth interviews, and presented the results under the name “The Work We Want“, a comprehensive platform that extensively covers all trends. What are some of the trends that stand out?
Many organizations say they are (going to) use new platforms to reach untapped talent.
Firstly, organizations claim to be increasingly widening their gates. Long-term unemployed? People with disabilities, a criminal record, or from ethnic minorities? They are all more welcome than ever, according to employers. Additionally, organizations claim to be working on more efficient recruitment practices, such as making application procedures more accessible and using new platforms to reach untapped talent. Many companies are also reducing formal educational requirements for hiring staff.
The majority favors migration.
According to the research, half of the organizations aim to expand their employee base within 2 years to include groups currently experiencing less employment, thereby enlarging their talent pools. Furthermore, they aim to provide specialized support to refugees and asylum seekers, who often face legal barriers and disadvantages due to gaps in their CVs, language barriers, or a lack of local experience. Of those surveyed, 81% indicate that increased labor migration enables their organizations to access skilled talent, which is crucial in their pursuit of a balanced labor market.
The desire for more flexibility applies globally to both employers and employees.
Flexibility is also a major trend. This applies in both directions. On one hand, employers increasingly demand flexibility from their employees, while on the other hand, employees themselves are increasingly demanding it. A large-scale trial in England showed that 89% of companies that temporarily switched to a 4-day workweek continued this practice after the trial period. Some other findings in this area include:
- Â 83% of respondents state that employees, after the COVID-19 pandemic, place (at least) as much value on flexibility (in their workplace) as on their primary employment terms.
- 82% believe that the idea of following one career path throughout a person’s entire life has disappeared forever.
- 83% believe it is necessary to raise awareness among people about the different types of employment contracts available to employees today and enable them to choose what suits them best.
Rise of A.I.
The emergence of A.I. has also been explored, and here are some notable findings in this field:
- 81% state that A.I. and other technological disruptions force them to radically rethink skills and HR.
- 78% are concerned that they may not be able to train their employees quickly enough to keep up with developments in the next 3 years.
- 79% believe that flexible hiring of specialized workers is an effective way to train permanent employees.
The researchers also refer to projects undertaken by various organizations to adapt to the new world of work. For instance, attention is drawn to a project by Randstad aimed at engaging the 2.8 billion gamers worldwide and fostering the development of their skills, thereby simultaneously forming a talent pool for the staffing agency. Additionally, a Swiss initiative is highlighted, in which a specialized recruitment agency (Stiftung Profil) successfully reintegrates people with barriers to employment into the workforce.
The research also addresses the increased international labor mobility since the pandemic, as well as trends like The Great Resignation and The Great Attrition, which illustrate the changing preferences of employees. “The pandemic underscored employees’ desire for non-traditional forms of work, whether it’s flexible work, remote work, or working while traveling the world – all of which have become normalized,” says Barry Asin, Chief Analyst at Staffing Industry Analysts (SIA). “Meanwhile, companies continue to struggle to obtain the workforce they need.”
Significant emphasis on recruitment
The research also clearly demonstrates that many organizations worldwide are currently reassessing their recruitment practices. They aim to make their hiring processes more efficient and effective by:
- Making the application procedure more accessible (indicated by 47% of companies),
- Utilizing new recruitment platforms to access untapped talent (33%),
- Finding talent among unemployed workers and providing them with the support they need to succeed in the workplace (52%),
- Providing specialized support to refugees or asylum seekers to help them work within your organization (36%),
- Shortening the workweek (33%),
- Reducing specific experience or formal education requirements in recruitment (32%),
- Developing a global talent acquisition strategy (24%).
According to the researchers, there is a significant opportunity in providing asylum seekers and refugees with faster access to the labor market. 80% of respondents say that governments should reduce legal barriers to hiring refugees or asylum seekers. They believe that without migration, it will not be possible to address the shortages, as the majority opinion suggests.
Would you like to learn more?
The Work We Want
