CHANGES IN THE DEMAND FOR TALENT
Six of the forces we identified are having a profound effect on the demand for talent. (See Exhibit 2.) We categorize them into two groups:
- Technological and digital productivity: automation, big data and advanced analytics, and access to information and ideas
- Shifts in ways of generating business value: simplicity in complexity, agility and innovation, and new customer strategies
CHANGES IN THE SUPPLY OF TALENT
As these six forces propel a variety of changes in the demand for talent, six social, economic, political, and technological forces are shaping the supply. We have divided these forces into two groups. (See Exhibit 3.)
- Shifts in resource distribution: a new demographic mix, skill imbalances, and shifting geopolitical and economic power
- Changing workforce cultures and values: diversity and inclusion, individualism and entrepreneurship, and well-being and purpose
Shifts in Resource Distribution
An increasingly dynamic global economy has led to shortages of skilled, knowledgeable employees in some markets and may create a surplus of less-skilled workers in others. As Baby Boomers age, the demand for scarce and specialized talent grows, and as talent disperses as a result of various geographic, economic, and political factors, companies will be increasingly challenged to attract and retain the highly skilled people they need.
A New Demographic Mix. The global population is aging. After rapid population increases during the 20th century, birth rates have stalled—and even reversed—in many regions. By 2035, one in five people worldwide will be 65 or older. On the basis of several simulations using demographic data and global trends, BCG projects a global workforce crisis within the next 15 years, with a labor deficit in most of the 15 largest economies, including in three of the four BRIC nations. Given that these 15 economies make up 70% of global GDP, the crisis will affect almost every large multinational company.6
At the same time, in some emerging markets, the number of young people is still increasing rapidly. But many of them do not acquire the skills that would make them employable. The challenge is to help them develop those skills, or—for some young people—to increase their mobility so that they can find jobs elsewhere.
Meanwhile, millennial and Generation Z digital natives are entering the global workforce with new expectations and orientations. In their search for a healthy work-life balance and opportunities for self-expression, they are harder to please than their predecessors. They are also harder to retain.
These demographic shifts will put pressure on companies to devise entirely new ways to attract, retain, and develop talent across locations and age groups. They will need to hold on to experienced older workers and find ways to facilitate the transfer of those workers’ deep knowledge to incoming generations. For example, Bosch has started an initiative in which older and younger employees from different divisions (with at least a ten-year age difference) meet on a regular basis in order to learn from each other. The young employees learn best practices and get career advice, while the older workers gain insight into new technologies and the use of social media.
Skill Imbalances. The skills and capabilities businesses require are rapidly evolving. Even as automation may yield a surplus of unskilled and semiskilled labor, the digitalization of products and services is creating an enormous demand for skilled digital talent. Nearly half of US and German companies in a BCG survey cited the lack of qualified employees as the biggest constraint to a full digital transformation. In addition, according to a Gartner study, a third of all technology jobs will go unfilled by 2020 because of talent shortfalls. Perhaps that’s why some US colleges now offer majors in programs that didn’t even exist five years ago, such as robotics engineering, game design, cybersecurity, and data science.8
Companies are trying a variety of unconventional methods to bring in digital talent. Facebook, for example, has “acquihired” the employees of more than a dozen companies—buying these companies as much or more for the employees as for the business itself. Meanwhile, Citigroup and others are introducing online gaming apps, either as recruiting tools or to identify hidden skill sets among employees.
Others are attempting a more sustainable remedy for skill shortages: developing them among the existing workforce, including among many of the employees potentially displaced by automation. Given that many universities are already overwhelmed with demand, the responsibility for this radical retraining will likely fall into the hands of business. Moreover, programs designed for the academic domain are increasingly ineffective in building the skills required in the modern workplace. Instead, companies are turning to organizations such as Udacity, edX, and Coursera, which allow people to receive training while working full-time.
For many companies, incubating talent internally is more likely to pay off than depending on the marketplace. To that end, GE has introduced a mobile application that prompts employees to work on development areas and provides real-time feedback. The company expects this app eventually to replace traditional performance management.
Regardless of their current talent situation, companies should systematically analyze future supply and demand for various jobs under different scenarios and then plan accordingly. This approach, known as strategic workforce planning, helps businesses ensure that they will have enough people with the appropriate skills.
Chosen excerpts by Job Market Monitor. Read the whole story at Twelve Forces That Will Radically Change How Organizations Work: The New New Way of Working