Hunt for Skilled Workers May Cost $8.5 Trillion to Global Economy by 2030

Published May 9th, 2018 - 07:56 GMT
The study showed that the potential impact on the UAE economy in just 2 years time at 2020 is estimated at $14.5 billion. (Shutterstock)
The study showed that the potential impact on the UAE economy in just 2 years time at 2020 is estimated at $14.5 billion. (Shutterstock)

The hunt for skilled labour is going to get much more difficult in the coming years, and will cost companies millions of dollars in unrealised annual revenues if left unaddressed, a new study by Korn Ferry has found.

The 'Future of Work: The Global Talent Crunch' study found that, left unchecked, the financial impact of this talent shortage could reach $8.452 trillion in unrealised annual revenue by 2030 - equivalent to the combined GDP of Germany and Japan.

Furthermore, the results of the study showed that India is the only country expected to have a surplus of highly skilled financial and business services labour by 2030.

"Most research into the future of work revolves around technology and the role that it will play," said Jonathan R. Holmes, managing director, Middle East, Korn Ferry.

"Our research found that 67 per cent of CEOs believe that technology will be their chief value generator in the future of work. However, human capital is the most critical asset in any organisation. People will always be the greatest value creator. We know that for every $1 that is invested in human capital, $11.39 is added to GDP."

Holmes described the situation as a "time bomb", and said that unless addressed, the challenge will only become harder for organisations to handle.

"It is not just a company issue, it is a nation issue."

The study showed that the potential impact on the UAE economy in just 2 years time at 2020 is estimated at $14.5 billion, 3 per cent of the total economy. At the same time, there will be a surplus of nearly 350,000 Level B workers - mid-skilled workers at high school level - who could be upskilled to help fill the talent gap. By 2030, that Level A skilled talent gap - highly skilled workers post university level - is expected to exceed 111,000 workers with the potential for more than $50 billion in unrecognised economic opportunity.

"Candidates who are qualified with good enterprise resource planning experience and mergers and acquisitions exposure, will be in high demand in 2018," said Jason Grundy, country head at Robert Walters - Middle East.

According to the study, the UAE is in a far better position than others across the Europe, Middle East and Africa (EMEA) with the lowest projected total skilled labour deficit it needs to fill and the second lowest potential economic output at risk.

"The UAE is in far better shape than the rest of the world if you look at the situation that will present itself in 2030. If you compare it with the rest of the EMEA region, then the UAE actually has the lowest deficit in skilled workers," George Karam, managing partner at Korn Ferry Hay Group Middle East.

"Today, the risk revolves around a shortage of 63,000 skilled workers in the Grade A category. The risk gets bigger in 2030, with $50 billion in unrealised output - this is 5 per cent of the UAE economy," he said. "We can all expect greater competition globally in terms of attracting the right type of talent," he added.

"However, the leaders in the UAE have already and are launching initiatives to address this issue. These include: the Education & Human Resource Council; Advanced Skills Initiative; National Higher Education Strategy; STEM Education focus; One Million Arab Coders; Women in the Workforce. All these initiatives are helping to put the UAE in a very good position for the future."

Suellen Tomlinson, senior client partner at Korn Ferry Middle East, also noted that preparing the workforce for the jobs of the future is a challenge. "Learning has to continue from the educational environment to the workplace; and there are five behavioural competencies in particular that take longer to develop. These competencies will include learning how to manage ambiguity, having a strategic mindset, cultivating innovation, driving vision and purpose, and driving results."

She added: "Organisations must provide diverse experiences and increase investment into the upskilling of nationals at an early age. Companies also need to plan on how they can retain that talent. Invest early in your talent, train more agility, develop your value propositions, and invest in retaining your staff. Create and then ensure that you retain the leaders of the future. This is only possible if you build a work culture that allows you to do all of this."

By Rohma Sadaqat

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