Korn Ferry’s The Global Talent Crunch Study reveals India as the only country with a talent surplus by 2030 (India stands out as the only country in our study that can expect a talent surplus, expected to reach 245.3 million workers by 2030).
According to the study by 2030, demand for skilled workers will outstrip supply, resulting in a global talent shortage of more than 85.2 million people. Signs are already emerging that within two years there won’t be enough talent to go around. In countries with low unemployment and booming manufacturing production, including the Czech Republic, Poland, Hungary and Slovakia, a labour shortage has already accelerated automation and increased use of robotics—not to replace people, but because there aren’t enough of them to fill the factories.
Organizations may be prompted to relocate their headquarters
Left unchecked, the financial impact of this talent shortage could reach $8.452 trillion in unrealized annual revenue by 2030, equivalent to the combined GDP of Germany and Japan. The United States alone could miss out on $1.748 trillion in revenue due to labour shortages, or roughly 6% of its entire economy. The impact of the talent crunch is so significant that the continued predominance of sector powerhouses is in question, from London as a global financial services center to the United States as a technology leader to China as a key manufacturing base.
As a result, organizations may be prompted to relocate their headquarters and operational centers to places where the talent supply is more plentiful. Governments will be forced to invest in improving their people’s skills to avert corporate flight and to defend their nations’ income and status.
The United States’ financial services sector will suffer the most from stunted growth due to lack of talent. For the all-important technology sector, we found that a labour-skills shortage will reach 4.3 million workers by 2030, or 59 times the number of employees of Alphabet, Google’s parent company.
On the positive side, India is projected to have a skilled-labour surplus of around 245.3 million workers by 2030. It will be the only country which is expected to have a surplus, owing mainly to its vast supply of working-age citizens and government programs to boost workers’ skills.
India could challenge America’s tech position well before 2030
The United States, currently the world’s leading technology market, can expect to lose out on $162.25 billion by 2030 due to sector skills shortages. These talent deficits may imperil America’s status as the global tech center. China, which has labored to transform itself into a world leading tech center, could fail to generate $44.45 billion of revenue by 2030 due to skills shortages. By 2030, the UK will fail to realize almost 9% of Technology, Media, and Telecom (TMT) Sector potential revenue due to skills shortages. India is again the only country expected to have a skilled-labor surplus, expected to reach 1.3 million workers by 2030, creating opportunities for India to further develop its importance as a technology center.
India will see a Level A-TMT surplus of 1.3 million workers by 2030, offering yet more opportunities for the nation. When Korn Ferry ranked countries in this study by value added to the TMT sector, India pulled in at No. 7 (America was No. 1). But with the United States facing a Level A labor shortage as soon as 2020, the shortfall could exceed 625,000 TMT workers by 2030. Bangalore, with its skilled worker surplus, may storm up the rankings, surpassing US tech hubs. India could challenge America’s position well before 2030.
Labor shortages loom for manufacturing centers as well
Labor surpluses in China and Russia will not persist, however. By 2030, both countries will face Level A labour deficits. Japan should also brace for a particularly acute skills shortage. It may struggle to maintain its spot in the world’s top manufacturing ranks as it faces immediate labour deficits at both Level A and Level B. Germany will see the next biggest impact after Japan in its unrealized output due to manufacturing labour shortages, with the deficits it is already experiencing at Levels A and B intensifying. However, across the manufacturing sectors in the 20 economies which the study analyzed, Hong Kong and Singapore will be hardest hit. By 2030, Hong Kong’s Level A deficit will be equivalent to 80% of its sector’s workforce. Singapore may face Level A labour shortages equaling more than 61%.
India, yet again, is the only country where the supply of highly skilled labour is growing faster than demand, with a projected Level A labour surplus by 2030 of more than 2.4 million workers.