Skills Deficit Will Imperil U.S. Economy by 2030
- By Dian Schaffhauser
For all the talk of technologies such as artificial intelligence and robotics doing away with the human element in corporate life, well trained human beings are still an essential ingredient. In fact, if the current skills gap remains unplugged, by 2030 the world will see "tens of millions of unfilled jobs and trillions of dollars in unrealized revenue," according to a new study by global consultancy Korn Ferry. The shortages could also change which countries are dominant in specific industries and force organizations to move their headquarters and operational centers to locations where they can find the talent they need. One solution: for companies to take a bigger responsibility in training people out of school.
The research examined the gap between future talent supply and demand for the years 2020, 2025 and 2030 in three broad industries: financial and business services; technology, media and telecommunications; and manufacturing.
In the United States, according to the report, the skills deficit will be come to the forefront by 2020 and become "significant" by the year 2030. The financial and business services sector, which makes up a disproportionate amount of the American economy, will suffer the worst by then, experiencing a talent shortage expected to exceed 1.2 million workers and generating a shortfall of an estimated $436 billion.
The technology, media and telecom industry, which the United States currently leads, could lose out on $162 billion in unrealized output by 2030 due to sector skills shortages. As the researchers put it, "These talent deficits may imperil America's status as the global tech center."
Even manufacturing, not always considered an area of U.S. strength, could struggle with shortages of highly skilled people (those with at least some post-secondary education). In this country the deficit is expected to reach 383,000 workers, about 10 percent of the highly skilled workforce that's needed. Researchers suggested that a global worker surplus in China and Russia will offset the sector deficits for the United States and other countries, such as Japan and Germany.
The report offers little direct guidance for addressing the skills gap. However, it advised governments to "make talent strategy a key priority and take steps now to educate, train and upskill their existing workforces."
The consultancy also suggested that companies themselves recognize their responsibility to train workers and "encourage governments to rethink education programs to generate the talent pipelines the industry will require." For example, some organizations are hiring students out of high school and college with the expectation that they'll do the training to prepare the graduates for the unique company culture and ways of working.
"Our study reveals that there already 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," said Korn Ferry CEO, Alan Guarino, in a prepared statement. "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."
The report, The Global Talent Crunch," is available with registration on the Korn Ferry website.
Dian Schaffhauser is a senior contributing editor for 1105 Media's education publications THE Journal and Campus Technology. She can be reached at email@example.com or on Twitter @schaffhauser.