India will have 245 million more workers in the next 12 years.
While the rest of the world will be struggling to chase trillions of unrealised revenues due to the shortage of skilled talent, India will be the only country by 2030 with an unrealised talent surplus.
A recent Korn Ferry study revealed that India, the world’s sixth largest economy is the only country which will have a talent surplus by 2030, with 245 million more workers in the next 12 years. It also states that, skilled talent shortage, which is already a major issue will continue to impede growth. If left unaddressed it could have a significant impact on major Asia Pacific (APAC) economies by 2030.
According to the study, a talent deficit of 85.2 million workers is expected across the economies analysed—greater than the current population of Germany itself. Left unchecked, the financial impact of this talent shortage amounts to $8.5 trillion in unrealised annual revenue globally, over the next 12 years. However, interestingly, the only country that’s at the other end of the spectrum is India.
If this is going to be the reality, India may have a bigger challenge of unemployment. Michael Distefano, chief operating officer, Korn Ferry Asia Pacific is concerned about the lack of talent, as he says, “Left to run its course, this shortage will severely impact the growth of markets across APAC, with an imminent talent deficit of over 12.3 million workers by 2020, rising to a shortage of 47 million workers and $4.238 trillion in unrealised annual revenue across the region in 2030.”
As per the study, the talent surplus in India has a silver lining to offer too. If utilised well, it could put India in a better economic position by 2030. Talking of the talent excess in the TMT (technology, media and telecommunications) sector, the study states that, with the US facing a Level A labour shortage, as soon as 2020—a shortfall that 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 even challenge America’s position well before 2030.
The talent deficit issue could threaten economies and sectors across APAC. Some other key findings of the study are as follows:
? Asia Pacific faces an imminent labour shortage of 12.3 million workers by 2020, rising to 47 million by 2030 at an annual opportunity cost of $4.238 trillion.
? China will feel the talent shortage most acutely and could lose out on $1.433 trillion in annual revenue not generated by 2030—one third of the Asia Pacific region’s total opportunity cost.
Globally, the study reveals a potential crisis with a sizeable mismatch between supply of available workers and business demand:
? The US, Japan, France, Germany and Australia face the largest threat in the near term, with a combined opportunity cost of $1.876 trillion by 2020.
? Labour shortages in global financial and business services are the most acute, with a potential deficit of 10.7 million workers globally by 2030.
? Technological advancement across all sectors of the global economy could be hindered by an acute global labour shortage of 4.3 million TMT workers by 2030.
? Manufacturing is facing a global talent deficit crisis of 7.9 million workers by 2030, despite being the only sector with a surplus of highly skilled workers in 2020.
Bhavna Sud, client partner, Korn Ferry India, is of the view that the right talent is the greatest competitive advantage for an organisation, and that talent is getting scarcer every day. She says, “Our study reveals that there already isn’t enough skilled talent to go around, and by 2030, organisations and economies could find themselves in the grip of a talent crisis. India, however, has the unique distinction of having a talent surplus right now and will continue to do so in 2030.”
Industries where the talent surplus will be the most visible in India include the financial services with a surplus of 1.1 million, TMT at 1.3 million and manufacturing at 2.44 million of extra manpower in 12 years.
“While India does have a surplus of talent, we must deal with the twin challenges of employability and job creation. The government as well as industry have made significant efforts to address both issues through programmes, such as ‘Skill India’. However, we will have to do more to create a competitive advantage of the surplus manpower we have. If left unchecked, the talent surplus will add to our woes of jobless growth and unemployment. Companies across the Asia Pacific, including India, must act now to future-proof their business,” Sud adds.
To manage this critical talent challenge facing our global economy, companies need to rethink their hiring and talent-management processes. Sud suggests organisations hire for fit and culture rather than skills because skills come with a shelf life now. Hire people high on agility and make continuous learning a part of your life. Retain your best and show them a growth path. Tap into new and different sources of talent. Forecast and train for the ‘right’ skills. Make it easy for women to re-enter the workforce and literally double talent supply.
“And finally, technology is the factor that will enable us to be ready for the future of work. The future will be built on the effective partnership between people and technology. The acute demand for workers with the right skills that businesses need, rather than the much-discussed domination of technology in business, could become the defining issue of our age,” Sud opines.