Australian companies may find it harder to hold on to their skilled employees over the next decade, according to Global Talent 2021, a detailed research study conducted by Oxford Economics in partnership with Towers Watson.
Profound market shifts will impact the supply and demand for skilled talent over the next decade. Technology is fuelling demand for highly skilled workers worldwide while emerging economies are increasing their supply of talent through greater access to education.
The study, which includes a global survey of 352 HR executives and in-depth interviews with leading multinational firms, examines how rapid globalisation and the transformation of business models in virtually every industry will affect workforce needs in the future. It also includes extensive economic modelling of 46 countries and 21 industry sectors to identify where pivotal changes in the demand and supply of talent will occur over the next decade, based on government data and Oxford Economics' own forecasts.
Australia, like many other developed economies such as the UK, US, Canada and Japan, shows a strong trend towards a talent deficit by 2021. India is showing the strongest trend towards a talent surplus, along with such nations as Indonesia, Colombia, South Africa and Brazil. China, however, occupies the middle ground with demand and supply of talent in balance.
“The balance between supply and demand of talent differs from market to market,” says Julie Gebauer, Global Head of Talent and Reward, Towers Watson. “Specifically, as the skills employers require become more complex, labour shortages are projected in many mature markets, including Australia. These new realities make it incumbent on HR executives to consider new and creative ways to access talent across the globe."
Lesley Brown, regional practice leader – employee surveys and insights, Towers Watson, said Australian companies must rethink how they address their shifting talent needs. “The survey suggests that a decade from now, eight of the top 10 countries with the largest talent surpluses will be in the developing world. We’ve found that the most dramatic jump in employment demand will be in emerging Asia, where the need for new employees will jump some 22.2%.”
Other emerging markets that will see above-average growth in required staff are Latin America (13.4%), the Middle East and Africa (13.2%) and Eastern Europe (10.5%). Employment demand in Western Europe, by contrast, is projected to grow a rather modest 3.5%. When looking at industries such as business services, energy, travel and transport, and life sciences, staffing levels will actually decline. Somewhat stronger job growth is expected in North America, where surveyed executives expect overall employment to rise 6.1% over the next three years.
Other findings include:
Business transformation requires new skills. The vast majority of companies are engaging in transformation initiatives to rethink their global strategies, business models and organisational approaches. This transformation also requires a repositioning of employee skill sets across all levels of seniority.
Digital knowledge, agile thinking, interpersonal and communication skills, and global operating capabilities will be talent areas in high demand over the next five to 10 years.
Companies will need to address the talent mismatch. In the developed world, where talent shortages in a number of managerial and technical fields are expected to persist, companies will be forced to think more explicitly about the trade-offs among outsourcing work, offshoring staff and retraining workers.
“HR executives who adopt an evidence-based approach will see significant results,” Brown said. “The study posed a number of targeted questions on the five core principles of evidence-based change: logic-driven analytics, segmentation, optimisation, risk leverage, and integration and synergy. It showed conclusively that implementing the five HR principles boosted employee engagement.”
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