2020

PROGRESS REPORT

WORKFORCE

A Talent Crisis Looms

Upskilling workforces throughout the world is essential to closing the skills gap

There’s a serious shortage of talent needed to sustain business activity and economies worldwide. Unless something changes, it’s only going to get worse in the coming decades and affect how organizations operate and where they go to acquire the talent they need.

Recent studies support these serious assertions and present a sobering look at what might be coming.

By 2030, for instance, the worldwide talent shortage will reach about 85 million people without in-demand skills, according to a recent report by Korn Ferry, a management consulting firm.

The financial impact of this gap? As much as $8.5 trillion of unrealized annual revenue—that is, if organizations, governments and individuals do adapt and ensure that needed skills become available.1

ManpowerGroup, a workforce management company, also reported that the global talent shortage has reached a 12-year high. The problem is currently most severe in 10 countries, including India, in which 56% of employers reported having the most difficulty in filling positions, according to the “Talent Shortage 2018” survey report released earlier this year.2 These findings only build on what ManpowerGroup two years ago deemed the worst talent shortage since the Great Recession of 2007.3

Skilled trades positions remain some of the hardest to fill, as well as IT and technology-related positions. A global list of the jobs most difficult to fill includes:

  • Sales representatives.
  • Engineers.
  • Technicians.
  • Drivers.
  • Accounting and finance staff.
  • Management.
  • Production operators/machine operators.
  • Secretaries, receptionists, administrative assistants and office support staff.4

“The impact of the talent crunch is so significant that the continued predominance of sector powerhouses is in question—from London as a global financial services center to the United States as a technology leader to China as a key manufacturing base,” wrote authors of the Korn Ferry report, part of its “Future of Work” series of studies.5

In tech alone, the United States stands to lose out on $162 billion worth of revenue annually unless it finds more high-tech workers.6

“As a result (of the shortages), organizations may be prompted to relocate their headquarters and operational centers to places where the talent supply is more plentiful. Governments will be forced to invest in improving their people’s skills to avert corporate flight and to defend their nations’ income and status,” Korn Ferry authors wrote.7

Every industry is affected by the situation, according to the ManpowerGroup study. From manufacturing to mining, transport to trade, finance and business services to technology, media and telecommunications—employers cannot seem to find the people they need with the right blend of technical skills and human strengths.8

What countries are most affected?

Much of the shortage is based on demography. Japan and many European nations, for example, have had low birth rates for decades. In the United States, the majority of baby boomers will have moved out of the workforce by 2030, but younger generations will not have had the time or training to take many of the high-skilled jobs left behind.9

According to ManpowerGroup, Japan is the country facing the most severe talent crisis: 89% of employers reported that they have difficulty hiring the right talent, followed by Romania (81%) and Taiwan (78%).10

By 2030, Russia could have a shortage of up to 6 million people, and China could be facing a shortage twice as large. The United States also could be facing a deficit of more than 6 million workers. It’s worse in Japan, Indonesia and Brazil—each of which could have shortages of up to 18 million skilled workers.11

India, on the other hand, may be on track to recover from its talent shortage and become the world’s most powerful business center. Among the 20 countries included in the Korn Ferry study, India is the only one expected to have a talent surplus—estimated at 245 million workers—in 2030.12 In fact, India could become the next tech leader. The country could have a surplus of more than 1 million high-skilled tech workers by 2030.13

Why the shortages?

“Global growth, demographic trends, under-skilled workforces and tightening immigration mean that even significant productivity leaps—enabled by technological advances—will be insufficient to prevent the talent crunch,” Korn Ferry authors wrote.14

In the United States specifically, the graying population is the major contributor to the talent shortage, with some 10,000 baby boomers reaching retirement age every day for the next 19 years. Even last year, U.S. job vacancies hit a record 6 million per month.15

Some say that blame can be spread to the organizations themselves. One HR executive seemed critical of organizations and their leaders, saying they are failing to realize the gravity of the situation and then act surprised when they find talent isn’t readily available for hire.

“If the real world doesn’t produce the number of candidates with the exact skills you think you need, then it is your obligation as a leader to figure out a solution—either by training new hires in the skills you think they need, or changing the way your business works such that those skills won’t be as essential anymore,” wrote Liz Ryan, CEO and founder of Human Workplace, an HR consulting firm in Colorado. “Many leaders can’t rise to that challenge. It is so much easier, after all, to complain about ‘talent shortages’ than to hire smart people and train them in the parts of the job they don’t already know.”16

What must change?

Lessening the talent shortage requires many organizations and governments to redefine the social contract between individuals, organizations and governments.

In other words, not only are different skill sets necessary, but new ways of working must be embraced, and organizations must adopt “a more mature, flexible relationship with their people, based on mutual respect,” according to the Korn Ferry report.17

Training and reskilling efforts of current workforces must accelerate sooner rather than later.

“With record talent shortages around the world, employers should shift their focus from just-in-time hiring strategies to becoming builders of talent for today and tomorrow,” said Jonas Prising, chairman and CEO of Manpower Group.18

However, governments, too, must get involved.

“As with many economies, the onus falls on companies to train workers, and also to encourage governments to rethink education programs to generate the talent pipelines the industry will require,” said Werner Penk, president of technology at Korn Ferry.19

ManpowerGroup’s survey seems to show that more organizations have begun to upskill their own workforces. More than half of organizations that took the survey said they are investing in learning platforms and development tools to build their talent pipeline. Fifty-four percent of employers are providing additional training and development to overcome talent shortages and make the market ready to fulfill the needs and requirements of their organizations.20

“Constant learning—driven by both workers and organizations—will be central to the future of work, extending far beyond the traditional definition of learning and development,” said Jean-Marc Laouchez, president of the Korn Ferry Insitute.21

—compiled by Mark Edmund, associate editor

REFERENCES

  1. David McCann, “Think There’s a Talent Shortage Now? Just Wait,” CFO Magazine, May 7, 2018, https://tinyurl.com/cfo-mag-talent-short.
  2. Knowledge & News Network, “Talent Shortages on Rise Globally, India Among Top 10 Countries Facing Same Challenge: Report,” June 27, 2018, https://tinyurl.com/knn-manpower-group.
  3. Society for Human Resource Management, “Employers Are Facing the Worst Talent Shortage Since 2007,” Nov. 7, 2016, https://tinyurl.com/shrm-talent-short.
  4. Ibid.
  5. McCann, “Think There’s a Talent Shortage Now? Just Wait,” see reference 1.
  6. Jean-Marc Laouchez, Werner Penk, Yannick Binvel, Alan Guarino and Michael Franzino, “The $8.5 Trillion Talent Shortage,” Korn Ferry Institute, May 9, 2018, https://tinyurl.com/korn-ferry-talent-study.
  7. McCann, “Think There’s a Talent Shortage Now? Just Wait,” see reference 1.
  8. Knowledge & News Network, “Talent Shortages on Rise Globally, India Among Top 10 Countries Facing Same Challenge: Report,” see reference 2.
  9. Laouchez, “The $8.5 Trillion Talent Shortage,” see reference 6.
  10. Knowledge & News Network, “Talent Shortages on Rise Globally, India Among Top 10 Countries Facing Same Challenge: Report,” see reference 2.
  11. Laouchez, “The $8.5 Trillion Talent Shortage,” see reference 6.
  12. McCann, “Think There’s a Talent Shortage Now? Just Wait,” see reference 1.
  13. Laouchez, “The $8.5 Trillion Talent Shortage,” see reference 6.
  14. McCann, “Think There’s a Talent Shortage Now? Just Wait,” see reference 1.
  15. Ibid.
  16. Liz Ryan, “There Is No Talent Shortage—Only Employers Who Fail at Recruiting,” Forbes, April 9, 2018, https://tinyurl.com/forbes-liz-ryan-talent.
  17. McCann, “Think There’s a Talent Shortage Now? Just Wait,” see reference 1.
  18. Knowledge & News Network, “Talent Shortages on Rise Globally, India Among Top 10 Countries Facing Same Challenge: Report,” see reference 2.
  19. Laouchez, “The $8.5 Trillion Talent Shortage,” see reference 6.
  20. Knowledge & News Network, “Talent Shortages on Rise Globally, India Among Top 10 Countries Facing Same Challenge: Report,” see reference 2.
  21. Laouchez, “The $8.5 Trillion Talent Shortage,” see reference 6.

New @ ASQ

What’s on our minds

ASQ’s Chair Elmer Corbin and CEO Bill Troy will speak at the inaugural Excellence Summit Sept. 11-12 in Gothenburg, Sweden. Corbin will speak on transforming digital business with IBM Watson cognitive technology. Troy will address building a culture of quality using an example from the military. The conference is being organized by three international CEOs, including Lars Sörqvist, an incoming ASQ board member. Several ASQ fellows are also scheduled to speak at the event. For more information, visit https://tinyurl.com/excellence-brochure.


QUALITY HEADLINES

Quality-Related News From Around the World  —powered by Lexis Nexis

Four Hospitals Honored for Commitment to Quality

Four U.S. hospitals are being recognized for their leadership and innovation in quality improvement and safety. The 2013 American Hospital Association-McKesson Quest for Quality Prize will be awarded to Beth Israel Deaconess Medical Center in Boston, which will receive $75,000. It was selected by a multidisciplinary committee of healthcare quality and patient safety experts based on its sustainable and pervasive approach to achieve the Institute of Medicine’s six quality aims of safe, effective, efficient, timely, patient-centered and equitable healthcare. To learn more about the other recipients, read the QNT story at https://tinyurl.com/y8akn2tn.

Google Says Its AI Is Better at Predicting Death Than Hospitals

Google’s Medical Brain team is now training its artificial intelligence (AI) to predict the death risk among hospital patients—and its early results show it has slightly higher accuracy than a hospital’s own warning system. Bloomberg describes the healthcare potential of Medical Brain’s findings, including its ability to use previously unusable information to reach its predictions. Read more at https://tinyurl.com/y9zv7qj5.

Porsche, South Korean Autos Rated Among Best by J.D. Power Survey

New vehicle quality has improved overall and three South Korean automakers were rated in the top 10 of J.D. Power’s newest quality ratings. The annual J.D. Power U.S. Initial Quality Study measures the number of problems per 100 vehicles reported this year by new car buyers in the United States in the first 90 days of ownership. For more information about the report, check out the QNT story at https://tinyurl.com/y8ypjbyz.

For a roundup of the week’s most noteworthy stories delivered to your inbox every Friday, subscribe to the QNT Weekly e-newsletter at asq.org/newsletters.


STANDARDS

Revised ISO 19011 Published

The revised international standard for auditing management systems, last updated seven years ago, was published last month.

ISO 19011:2018—Guidelines for Auditing Management Systems includes guidance on the principles of auditing, managing an audit program and conducting management system audits, as well as guidance on evaluating the competence of individuals involved in the audit process. These activities include the people managing the audit program, auditors and audit teams.

The standard applies to all organizations that must plan and conduct internal or external audits of management systems or manage an audit program. For more information on the ISO 19011:2018, visit http://tinyurl.com/ISO-19011-2018.


Latest Issues of Two ASQ Journals Released

The theme of the Journal for Quality and Participation’s July edition is “People at the Core of Improvement” and includes an article about how a city government’s internal training consulting group used voice of customer information to improve processes. To access that article, visit asq.org/pub/jqp/index.html.

Among the articles in Six Sigma Forum Magazine’s August edition is one that describes qualitative strategies to overcome resistance to change in lean manufacturing. To access that article, visit asq.org/pub/sixsigma/index.html.


Getting to Know…

José Carlos Flores Molina

Current position: Director of the Institute for Quality of Pontificia Universidad Católica del Perú

Education: Doctorate in industrial and ­systems engineering from Florida International University (FIU) in Miami

What was your introduction to quality? Through an internship at Procter & Gamble, I learned the importance of testing labs. At Shell, I learned the benefits of quality assurance and working with procedures.

Do you have a mentor who has made a difference in your career? A professor, Kurt Paulsen, taught me the basics of excellence, ethics and analysis for quality improvement.

What teacher influenced you the most? Shu-Ching Chen at FIU, who established a strong link between research, engineering and enterprises.

Are you active in ASQ? I currently serve as chair of the local member community in Lima, Peru.

What noteworthy activities or achievements outside of ASQ do you participate in? I chair the committee of the Peruvian National Standards Body and am president of Sociedad Nacional de Organismos Acreditados en Sistemas de Calidad (SNOASC), the Peruvian society of the conformity assessment accredited institutions.

Any recent honors or awards? Elected to ASQ’s 2018 class of fellows.

What was the last book you read? Good to Great by Jim Collins. My favorite author is Mario Vargas Llosa.

Personal: Married to Marlene, with children José Antonio, 19, and María Fernanda, 14.

What are your favorite ways to relax? Cooking and listening to music.


QP Nets Award For Redesign

Quality Progress received a bronze award for best redesigned magazine (circulation 50,001-100,000) at the Association Media & Publishing Excel Awards in late June in Washington, D.C. The redesigned publication, unveiled in March 2017, was completed with the help of GLC, a marketing, communications and design firm in Skokie, IL.


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