A new report highlights the significant divide between supply and demand for highly-skilled workers
Leaders that prioritise building a highly-skilled talent pipeline will shield their companies from the worst effects of the talent crunch, according to Andrew Lafontaine, head of organisational strategy practice, Korn Ferry ANZ.
These effects include constrained growth, paying a premium for mission-critical talent, and fighting with competitors in the same shallow pool.
“With the rate and extent of transformation we are seeing in the market, leaders must focus on what makes their organisation unique to employees, both in terms of the company’s core purpose and the rewards they can offer people – beyond a salary,” he added.
Lafontaine’s comments come as a new report by Korn Ferry found Australian companies are forecasted to have a talent shortage of 739,000 highly skilled workers and miss out on $162.35 billion USD ($228.31bn AUD) in unrealised revenue by 2020.
Indeed, The Talent Crunch report highlights the divide between supply and demand for highly-skilled workers, and the potentially damaging effect on the Australian and global economy. This includes the cost of recruiting workers from overseas markets, and the cost of expansion and growth in the economy.
By 2030, it is forecasted that this deficit will rise to 2.2 million highly skilled workers and $587.56bn USD ($826bn AUD) by 2030. In terms of GDP, this represents 25% of Australia’s economy.
Even though there is no doubt that technology is changing the way companies operate, it appears Australian business leaders are misinterpreting the value of technology and automation in filling this labour deficit.
More than half (54%) of Australia’s C-suite believe their companies are safe from the talent crunch, predicting there will either be enough or even surplus skilled talent in Australia’s labour market at 2030.
Moreover, nearly three-quarters of those surveyed said they believed technology would surpass people as their greatest value creator by 2030.
However, Korn Ferry’s research showed that people are set to add $1215tn USD ($1708.65tn AUD) to the global economy, while physical capital (including technology) will only add $521tn ($732.68tn AUD) – a $1 trillion ‘blind spot’ for companies across the globe.
According to Korn Ferry, while robotics and machine learning will automate a range of functions – changing the nature of jobs and employment – there will still be a need for highly-skilled individuals to manage, apply and enhance automation.
The report also found that Australian companies could find themselves subject to an average pay premium of $28,600 USD ($40,220 AUD) per highly skilled worker by 2030, on top of inflation.
In fact, 45% of leaders said that they would pay a premium to attract critical highly skilled workers, who would most likely be recruited from overseas.
Lafontaine added that in the face of this “growing talent crunch” a rethink of talent management strategies is not just sensible but necessary for companies to survive in the future of work.
"Quite simply, companies that fail to forecast, develop, and evolve their talent management strategies will stumble into the future of work blind to its realities, and without the time to make up lost ground.”
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