The global workforce is changing rapidly. Skills shortages, new models of engagement and demographic shifts, as well as economic and political forces, are pushing companies to re-think their approaches to securing critical skills. As talent and business leaders look to the future, a strategic understanding of the forces of change is essential.
Allegis Group, a Hanover, MD-based global talent, staffing and recruitment services firm, has developed a snapshot of notable trends influencing the talent landscape around the world. Its newly released Global Workforce Trends Report provides a region-by-region breakdown of major economic and demographic statistics and trends influencing the supply of talent.
Based on research into global economic and demographic data, the study found that workforce trends not only vary widely among regions, but they are enormously complex, and the pace of change is accelerating. Behind the trends, a big-picture view of the talent landscape reveals three key factors driving change globally.
1. Changing Demographics: Global population changes are setting the stage for a new talent supply profile that is likely to last for decades. This change is due to the retirement of a disproportionately large generation of older Baby Boomers in many countries, leaving a workforce shortage behind them.
Likewise, country-by-country shifts from manufacturing to service-based economies, or vice versa, also add pressure to workforces in certain areas. These pressures, both demographic and economic, are reflected in key productivity measures such as gross domestic product (GDP), and, perhaps more revealing, per capita GDP.
2. Technology: New technologies put a premium on emerging skills. As the influence of innovation permeates many traditionally lower-skilled areas of business, companies will grow increasingly dependent on science, technology, engineering, and math (STEM) fields of expertise.
In today’s economies, the increasing demand for technical skills spans both IT and manufacturing sectors. This trend is accelerating, and it influences different countries in different ways. Regardless of location or industry, companies around the world will find themselves struggling to address new demands for technical skills.
3. Workforce Strategies: Finally, shifting economic conditions, demographics, and skills demands are leading to potentially disruptive changes in the way companies secure workers. These changes are reflected in the way various regions approach the use of staffing services and contingent workers, MSPs, RPO solutions, and freelancer and statement of work (SoW) talent. The maturity of talent strategies and solutions still varies greatly from country to country, but companies in nearly every region are experiencing pressure to get creative in expanding their talent supply. Organizations are re-examining talent requirements, increasing their use of flexible workers, boosting their commitment to developing current employees, and improving visibility and planning for future skills needs.
For talent decision makers, the trends underscore the growing importance of key elements in an effective workforce strategy. Flexibility in talent planning is essential as the traditional employee is no longer necessarily the default goal for filling a position. The care and development of a company’s incumbent workers are a priority as external sources of talent are subject to keen competition. And finally, the ability to adapt quickly to meet new talent demands will be a defining characteristic of successful companies in the future.
U.S.: The U.S. economy has been an effective job creator, and skilled workers remain scarce. The need for cost control and efficiency will consequently be part of an effective procurement and contingent workforce strategy. Other factors including talent quality and retention may combine to compel planners to increase wages more quickly in the future.
U.K.: While Brexit is a potential disruptor to longer-term hiring initiatives, job vacancies are at record highs following the 2009 economic crisis with a shortage of skilled workers to fill them. The U.K’s mature market is conducive to the use of contingent workers, Indian offshoring and contingent RPO, but that maturity may also slow MSP and RPO growth compared to the rest of Europe.
Primary Eurozone: France and Italy still experience unemployment rates of 10 percent or greater. The region is also experiencing a high level of retirements, expected to continue for the next several years, as well as a shortage of STEM workers and an overabundance of industrial or low-level office workers. Further, the rate of RPO growth is expected to be higher in Europe, and contingent RPO may contribute to that growth. A focus on flexibility will be important for companies navigating these markets.
APAC: Japan represents the dangers that extreme labor tightness can put on GDP while India represents the opposite: a potential labor supply to help other nations struggling to find enough skilled workers. Improved training and access to workers across boundaries will become an economic necessity in the region. RPO and MSP markets also have room to grow in size and sophistication.
Based on its extensive experience and the research outlined in the Global Workforce Trends Report, Allegis Group said that successful talent organizations will be those that apply a conscious approach to three critical areas:
Workforce trends not only vary widely among regions, but they are enormously complex, and the pace of change is accelerating, said Allegis Group’s director of labor market business intelligence Ron Hetrick. Today’s trends underscore the continuing pressures of shrinking talent supply, rising demand and industry competition. As employers look to the future, they see that traditional workforce management approaches may no longer fill the gaps.