Bangkok--4 May--Vivaldi Integrated PR
-- Study Indicates Potential Talent Deficit of 47.0 Million Workers in the Region by 2030 --
-- $4.238 Trillion (133.54 TH Baht) Revenue Opportunity Potentially Lost if Talent Shortage Not Addressed --
--Impact of labor shortage on manufacturing sector in Thailand is forecast to be $8.1 Billion (255.23 TH Baht), second only to China, by 2030--
Already a major issue, skilled talent shortages will continue to impede growth, and if not addressed could have a significant impact on major Asia Pacific (APAC) economies by 2030, a study* by Korn Ferry (NYSE: KFY) reveals today.
"Companies must work to mitigate this potential talent crisis now to protect their future," said Michael Distefano, President, Korn Ferry Asia Pacific. "Left to run its course, this shortage will severely impact the growth of markets across APAC, with an imminent talent deficit of more than 12.3 million workers by 2020, rising to a shortage of 47.0 million workers and $4.238 trillion in unrealized annual revenue across the region at 2030."
Korn Ferry's Global Talent Crunch study estimates the gap between future talent supply and demand in 20 major economies at three milestones: 2020, 2025 and 2030, and across three sectors: financial and business services; technology, media and telecommunications (TMT); and manufacturing.
The talent deficit issue could threaten economies and sectors across APAC:
- 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.
- Financial and business services will be hardest hit across the region, with a deficit of 3.7 million workers by 2030, resulting in an annual opportunity cost of more than $439.62 billion if labor shortages are not addressed.
- Significant talent deficits in manufacturing and TMT in China and Japan (3.2 million combined by 2030) puts the region's global dominance at risk
- Asia Pacific faces an imminent labor shortage of 12.3 million workers by 2020, rising to 47.0 million by 2030 at an annual opportunity cost of $4.238 trillion.
- China and Japan's financial and business services sectors face an annual opportunity cost of $147.10 and $113.62 billion respectively by 2030 -- more than half the sector's un-generated revenue for the region.
This places them second and fourth for greatest sector opportunity cost among the 20 economies analyzed (behind the U.S. at number one).
- China's manufacturing sector dominance is at risk -- it faces a shortage of 1.0 million workers and losing out on $71.43 billion by 2030.
- Japan's TMT powerhouse status is under threat -- it faces a shortage of more than a half-million workers, losing out on $47.80 billion in potential annual revenue by 2030 – equivalent to 20 percent of its entire sector -- a TMT opportunity cost second only to the U.S.
- Technological advancement across all sectors of the Asia Pacific economy could be hindered by an acute talent shortage of 2.0 million TMT workers, at an annual opportunity cost of more than $151.60 billion by 2030.
- India is the only economy among the 20 studied with a potential talent surplus, predicting an excess of 245.3 million workers by 2030.
Panuwat Kanchanosot, Senior Principal, Korn Ferry Hay Group said: "Companies across Asia Pacific must act now to future-proof their businesses. Left unaddressed, the talent crunch will severely impact the growth of key markets and sectors across the region."
For Thailand, the study specifically revealed:
- Impact of labor shortage on manufacturing sector is forecast to be THB 256.614 billion, second only to China
- Impact of labor shortage on technology, media, and telecommunication sector at 2030 at THB 57.0254 billion
- Impact of labor shortage on financial and business services sector at 2030 at THB 196.421 billion
- Productivity growth in 2016 to 2030 is assigned according to the sectoral average CAGR in productivity (in constant US dollars per worker) in 2000 to 2015,
"The right talent is the greatest competitive advantage there is for an organization - and that talent is getting scarcer every day," saidKanchanosot. "Our study reveals that already there isn't enough skilled talent to go around, and by 2030, organizations and economies could find themselves in the grip of a talent crisis. In the face of such acute talent shortages, workforce planning and a comprehensive understanding of the talent pipeline are critical."
"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," saidKanchanosot.
Globally, the study reveals a potential crisis with a sizable mismatch between supply of available workers and business demand:
- The United States, Japan, France, Germany and Australia face the largest threat in the near term, with a combined opportunity cost of $1.876 trillion by 2020.
- Labor 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 labor 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.
- India is the only economy in the study maintaining a talent surplus in 2025 and 2030.
- Skilled talent shortages will hit global growth by 2020.
- By 2030, we expect a talent deficit of 85.2 million workers.
- This will result in $8.452 trillion in unrealized annual revenue at 2030 – equivalent to the combined GDP of Germany and Japan.
- Australia, France, Germany, Japan and the United States face the largest threat, with a combined opportunity cost of $1.876 trillion in annual revenues by as early as 2020.
- Developed markets will be hardest hit by the imminent talent shortages.
Key Country Data
- The US faces a critical shortage of skilled workers that is set to worsen. It could leave $1.748 trillion of annual revenue on the table by 2030 - equivalent to 6% of the country's economy.
- Germany will experience the largest deficit in EMEA of 4.9 million workers and could lose out on $630 billion of annual revenue by 2030 if labor shortages are not addressed -- equivalent to 14% of its economy.
- The UK faces a shortage of 676.2 million workers in financial and business services, losing out on $90 billion in annual revenues by 2030 - equivalent to 7% of the sector.
Key Country Data
- The US faces a critical shortage of skilled workers that is set to worsen. It could leave $1.748 trillion of annual revenue on the table by 2030 - equivalent to 6% of the country's economy.
- Germany will experience the largest deficit in EMEA of 4.9 million workers and could lose out on $630 billion of annual revenue by 2030 if labor shortages are not addressed -- equivalent to 14% of its economy.
- The UK faces a shortage of 676.2 million workers in financial and business services, losing out on $90 billion in annual revenues by 2030 - equivalent to 7% of the sector.
The model reveals the skilled talent landscape for twenty major developed and developing economies:
- Americas: Brazil, Mexico, the US.
- EMEA: France, Germany, the Netherlands, Russia, Saudi Arabia, South Africa, UAE, UK.
- Asia Pacific: Australia, China, Hong Kong, India, Indonesia, Japan, Malaysia, Singapore, Thailand.
Asia Pacific markets studied Total unrealized output 2030 (USD bn) Total labor deficit 2030
China 1,433.5 -6,739,663
Japan 1,386.8 -13,756,592
Australia 587.6 -4,302,201
Indonesia 442.6 -17,943,311
Hong Kong 219.8 -1,884,657
Singapore 106.8 -1,093,506
Malaysia 6.1 -93,458
Thailand 54.8 -1,191,364
India 0 +245,294,246 (Surplus)
*About the Global Talent Crunch Study
The Korn Ferry Global Talent Crunch study is based on economic modeling designed by Korn Ferry, Man Bites Dog and Oxford Analytica and executed by Oxford Analytica.
The study estimates the impending talent crunch by modeling the gap between future labor supply and demand at three critical milestones: 2020, 2025 and 2030.
It scrutinizes data and business intelligence to uncover the extent of the talent shortfall in 20 major developed and developing economies. The 20 economies covered are: the Americas (Brazil, Mexico, the U.S.), EMEA (France, Germany, the Netherlands, Russia, Saudi Arabia, South Africa, U.A.E., U.K.) and Asia Pacific (Australia, China, Hong Kong, India, Indonesia, Japan, Malaysia, Singapore, Thailand).
Full methodology can be found in The Global Talent Crunch report
About Korn Ferry
Korn Ferry is a global organizational consulting firm. We help companies design their organization – the structure, the roles and responsibilities, as well as how they compensate, develop and motivate their people. As importantly, we help organizations select and hire the talent they need to execute their strategy. Our approximately 7,000 colleagues serve clients in more than 50 countries.