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Research by Korn Ferry Reports Potential Talent Shortage by the Year 2030
As we approach the year 2030, organizations worldwide are bracing themselves for a significant challenge in the labor market: a looming talent shortage. According to insights from Korn Ferry, this shortage is expected to have profound implications across industries and sectors, potentially causing disruptions in various industries if not addressed proactively.
Let’s delve into this pending global talent shortage and explore what it means for the future of work and recruitment.
An $8.5 Trillion Talent Shortage
According to Korn Ferry’s extensive report, data reveals that by 2030, there could be more than 85 million open jobs because there aren’t enough skilled people to fill the roles, culminating in $8.5 Trillion of unrealized revenue. This talent shortage is projected for 2030, and it stems from several converging factors:
1. Aging Baby Boomers
As the worldwide population ages, many developed and developing countries are facing a decline in the working-age population, many of which belong to the Baby Boomer generation. As more Boomers celebrate retirement, (congratulations, by the way!) open roles, especially in leadership positions held by these experienced pros, will need qualified candidates to step in.
This influential demographic shift will reduce the pool of available talent and leave many vacancies in skilled job positions, especially in roles that require strong leadership, technical skills, and niche expertise.
2. Rapidly Changing Technological Capabilities
In the age of artificial intelligence and other rapid technological advancements, industries are transforming faster than ever, creating demand for new skills. Though progress offers benefits, this rapid change in the tech landscape is creating a growing gap between the skills employers need and those that are available in the workforce. This labor shortage is more visible in niche career positions, making competition for talent skilled in these areas fiercer as the years progress.
3. Industry-Specific Challenges
Certain industries like healthcare, tech, and engineering, are expected to experience acute shortages due to specialized skill requirements and high demand. In fact, there is already a healthcare professional shortage in America (3.2 million healthcare workers by 2026 to be exact), and this is already making a negative impact on responsiveness and quality of care.
If your industry requires substantial education or training to train leaders, then it’s more likely that you will be facing such shortages in the coming years.
4. Global Competition for Talent
After the rise of flexible work and remote capabilities, the professional world has become smaller than ever. In this hyper-connected landscape, someone living in Brazil doesn’t have to physically relocate to work for a company based in Canada, the United States, Finland, India, and beyond.
On top of this, organizations are aware of this widened talent pool and are increasingly competing on a global scale for top candidates. This intensifies the challenge of attracting and retaining skilled professionals in recent years, and is only projected to become more difficult as remote work continues to make niche skill sets more accessible to corporations worldwide.
How Will These Skill Shortages Impact Organizations?
The implications of this looming 2030 talent shortage extend beyond recruitment challenges. Organizations are likely to face additional difficulties that extrapolate from talent scarcity, which include but are not limited to:
- More Competition: As demand for talent outstrips supply, employers will compete intensely for skilled workers, potentially driving up wages and benefits. There will also be more at stake if a c-suite leader quits as it will be more difficult to find a replacement.
- A Focus on Retention and Attrition Prevention: One can expect corporations to do their utmost to reduce turnover rates and keep skilled employees happy. In addition, it will be more crucial to establish steady talent pipelines to identify who in your industry is capable of filling important roles.
- Innovation Constraints: A lack of skilled talent could hinder innovation and organizational growth. Experienced professionals have the knowledge and problem-solving skills to drive progress, but having a skill gap can limit a company’s ability to adapt to market changes and technological advancements.
- Loss of Productivity: Unfilled positions and mismatches between job requirements and soft skills can potentially decrease productivity and efficiency within organizations. This will make ongoing professional development within companies vital, along with maximizing retention rates.
How Companies Can Respond Strategically to This Pending Shortage
The good news is that by studying turnover statistics and the reasons behind talent loss, companies can mitigate the effects of the impending 2030 talent shortage. Check out these strategic responses:
Investing in Talent Development: It’s much more cost effective to build capacity in-house than to constantly look for new people. Proactively developing existing employees through training, up-skilling, and re-skilling programs can help bridge some skills gaps and foster a more adaptable workforce.
Conduct Talent Mapping at Least once a Year: Talent Mapping is an invaluable method to identify gaps in skills as well as rising stars in your organization. By promoting top performers, you nurture talent in-house and prevent them from being taken by other companies who offer better positions and higher salaries.
- Fact: According to the American Psychological Association, lack of growth opportunity is a big reason why employees leave jobs. By reassessing who is growing in your company at least once a year, you can provide opportunities to advance, potentially reducing turnover rates.
Develop and Maintain a Robust Talent Pipeline: This is actually one of the best ways to get ahead of a talent shortage. Taking a proactive approach to sourcing and developing candidates over and above your “open positions” will allow you to be more agile and flexible when addressing future talent needs whether that means filling a specific gap or growing an entire division. You should keep a pool of known pre-qualified talent on standby to minimize your time to fill.
Enhance Your Recruitment Strategies: Employers may need to broaden their recruitment efforts outside of the normal LinkedIn or Indeed search. This is possible through professional Recruiting Research. By tapping into diverse talent pools, leveraging technology for recruitment automation, and strengthening employer branding to attract top talent.
More Collaboration and Partnerships: Collaborating with organizations beneficial to your industry will be key in the coming years. Whether they are educational institutions, industry associations, and government bodies, more professional connections can help you obtain a reliable talent pipeline that provides some measure of protection against skill gaps.
- Thought: Having a stronger presence at recruitment events at institutions of higher learning, trade schools, and other places where career hopefuls congregate can prove useful.
Preparing for the Future Talent Shortage
In navigating the challenges of the 2030 talent shortage, organizations can turn this crisis into an opportunity for a beneficial internal transformation. By prioritizing talent development, embracing innovation in recruitment practices, and fostering a culture of continuous learning and adaptability, businesses can position themselves to thrive in any labor market landscape.
Also, if you want to get ahead of the game with establishing a talent pipeline through Candidate Sourcing and Development, let’s start a conversation today! We look forward to proactively keeping a list of qualified interested candidates in your back pocket.
