Is Your Organization Ready for the Talent Crunch?
“A major crisis is coming, a seismic shock that will impact organizations and economies around the world. Global labor shortages of 85.2 million skilled workers are projected by 2030, resulting in lost revenue opportunities of $8.452 trillion – the combined GDP of Germany and Japan.”
These are the headlines of the Korn Ferry Talent Crunch study that are stirring up conversations in boardrooms and making the C-Suite sit up and take notice of the looming problem of talent shortage.
Is it code blue for skill shortage?
Skill shortage has always been an issue on the table for most organizations and it ranges from issues like the adequate supply of skilled people to the availability of people at feasible or specific locations. Whatever the specific need, skill shortages have always been an area of concern. So, why is there a code blue now?
As per the Korn Ferry report, “the United States’ financial services sector will suffer the most from stunted growth due to a lack of talent, with $435.69 billion in projected unrealized economic output, equal to about 1.5% of the country’s entire economy. In the all-important technology sector, a labor-skills shortage will reach 4.3 million workers by 2030, or 59 times the number of employees of Alphabet, Google’s parent company.” Also, the problem will soon be large enough to not only destabilize individual businesses but also sector powerhouses, such as London as the global financial services center, the USA as a technology leader, and China as a manufacturing hub.
Augmentation - the future of jobs and skills
What does the future hold for jobs and skills? Amid fears like robots taking most of our jobs or current jobs becoming obsolete, a report by The World Economic Forum on the Future of Jobs 2023 presents a more practical perspective on the impending talent crunch.
The report states that employers estimate that “44% of workers’ skills will be disrupted in the next five years and that six in 10 workers will require training before 2027, but only half of workers have access to adequate training opportunities today”.
“The highest priority for skills training from 2023-2027 is analytical thinking, which is set to account for 10% of training initiatives, on average. The second priority for workforce development is to promote creative thinking, which will be the subject of 8% of upskilling initiatives. Training workers to utilize AI and big data ranks third among company skills-training priorities in the next five years and will be prioritized by 42% of surveyed companies.”
The report also mentions that “respondents express confidence in developing their existing workforce, however, they are less optimistic regarding the outlook for talent availability in the next five years. Accordingly, organizations identify skills gaps and an inability to attract talent as the key barriers preventing industry transformation.”
How can L&D help?
L&D leaders must focus on the top priorities identified in the Future of Jobs 2023 report :
- Prepare for Digital Transformation
Future of Jobs report states that "Technology adoption will remain a key driver of business transformation in the next five years. Over 85% of organizations surveyed identify increased adoption of new and frontier technologies and broadening digital access as the trends most likely to drive transformation in their organization." To ensure their company's digital transformation, L&D experts can support employees by providing training on the right digital technology. "Within technology adoption, big data, cloud computing and AI feature highly on likelihood of adoption. More than 75% of companies are looking to adopt these technologies in the next five years." In order to become successful in a rapidly evolving professional landscape, employees must prioritize learning these skills. This is where L&D has to focus. By creating an environment where employees feel encouraged to learn new skills and use technology, L&D professionals can help employees stay ahead of the curve and drive innovation in their organizations.
- Invest in upskilling and reskilling
As stated earlier in the report, "six in 10 workers will require training before 2027, but only half of workers are seen to have access to adequate training opportunities today. The highest priority for skills training from 2023-2027 is analytical thinking, which is set to account for 10% of training initiatives, on average. The second priority for workforce development is to promote creative thinking, which will be the subject of 8% of upskilling initiatives. Training workers to utilize AI and big data ranks third among company skills-training priorities in the next five years and will be prioritized by 42% of surveyed companies."These skills have taken center stage, and the priority for L&D is ensuring that the employees are upskilled and reskilled in these most in-demand skills. Prior to implementing an effective upskilling or reskilling strategy, it is crucial to conduct a thorough analysis of the skill gaps. This analysis should be employee-centric, contextually relevant, and customized to address specific needs. And the focus should not be on just technical skills but on soft skills as well, as emphasized in the report. "Employers also plan to focus on developing worker’s skills in leadership and social influence (40% of companies); resilience, flexibility and agility (32%); and curiosity and lifelong learning (30%)."
- Focus on diversity, equity, and inclusion
According to the report, "A majority of companies will prioritize women (79%), youth under 25 (68%) and those with disabilities (51%) as part of their DEI programmes." The evidence strongly indicates that DEI initiatives within organizations will undoubtedly experience significant growth in the future. This is an excellent opportunity for L&D professionals to take a stand, as L&D experts are in a privileged position to promote and support these efforts.
- Be collaborative within organization to ensure industry transformation
The report further states that "Organizations identify skills gaps and an inability to attract talent as the key barriers preventing industry transformation, with 60% of surveyed companies highlighting the difficulty in bridging skills gaps locally and 53% identifying their inability to attract talent as the main barriers to transforming their business." As we’ve addressed the necessity to close the skills gap with upskilling and reskilling, it’s also imperative for L&D to work with other departments, such as HR, to attract and retain talent. L&D programs can’t succeed in silos.