Is your organisation prepared for these 'fault lines'?
The global labour market is being disrupted by three "fault lines," a new report has warned, urging employers to prepare for changes or risk getting left behind.
The new research report from Lightcast warned of three major factors that are permanently reshaping the balance between labour supply and demand. They are:
- Geopolitics
- Artificial intelligence
- Labour shortages
"Existing talent strategies are not built to handle the change that these three fault lines are forcing upon the world economy," the report read.
According to the report, geopolitics have overturned traditional strategies about the cost and availability of employees.
It noted that while China and India have more undergraduate students than the rest of the world, immigration slowdowns have been taking place because destination countries have been accepting fewer of them.
"One might think this would prompt established university systems in North America and Europe to bring in more students from abroad, particularly as domestic birth rates slow down, but for political and national security reasons, the opposite has happened," the report pointed out.
AI's impact
AI also has a role in accelerating this disruption and the geopolitical competition for talent, according to the report.
"Within Lightcast data, 35% of AI workers live in the US, but only 24% were educated there," the report read.
AI is also making the traditional degree-first hiring methods outdated, the report added.
It noted that only six per cent of AI workers have AI degrees, suggesting that majors are ineffective predictors of careers.
"Since technical skill requirements are changing so quickly, and traditional career pathways are broken, the role of education in an AI world will be to teach baseline skills that will endure for a lifetime, supplemented by short-term technical credentials," the report read.
Labour shortages
This degree-based hiring method is also making labour shortages worse in workplaces, according to the report, as it revealed that while 66% of global job postings require a college degree, only 31% of employees have them.
"Employers are putting up barriers to employment even though the world is running out of workers," the report read.
It stressed that the world population is already ageing, with increased life expectancies leading to a largely elderly population, while fertility rates are declining worldwide.
"Now talent pipelines are being squeezed from three sides: Fewer people being born, fewer people coming in, and obstacles to hiring the people already there," the report read.
Addressing the 'fault lines'
Organisations need to rethink how they hire, train, and plan for talent if they want to survive the disruption caused by the labour market "fault lines," according to the report.
"Even if you're prepared to handle one of these fault lines, you aren't prepared for the others," said Cole Napper, VP of Research and Innovation at Lightcast, in a statement.
"Organisations need to realise how these problems are interconnected and the disruption is accelerating."
Among the strategies the report suggested include:
- Shifting from degree-based to skills-first hiring
- Identifying adjacent career pathways for roles exposed to automation
- Aligning future education programmes with durable baseline skills
- Using integrated labour market intelligence to anticipate disruption
"The immediate goal is for organisations and institutions to stop pretending like it's business as usual, and prepare to change based on the new reality ahead," the report read.
