The FINANCIAL — The supply of both skilled and unskilled labor in major economies is expected to decrease significantly over the next decade, creating challenges for business leaders and opportunities for the global workforce to migrate to these understaffed countries for employment, according to a study released on September 22 by KPMG International.
The retirement of the baby boomer (born 1946–1961) generation from the workforce and a lack of Generation Ys (born 1976–1991) to replace them has already resulted in the contraction of the labor pool in countries such as Japan, with Australia, Canada, China, New Zealand, the United Kingdom, United States, much of Western Europe, and other nations expected to follow suit in the next decade, according to “The Global Skills Convergence: Issues and Ideas for the Management of an International Workforce” study.
“Increasing globalization, combined with the effects of what can be referred to as the ‘demographic faultline,’ is likely to present challenges for multinational corporations unprepared for the change,” said Bernard Salt, a partner with KPMG in Australia and primary author of the study. “Our study argues that the labor shortage will result in what we call a ‘global skills convergence’— a net flow of skilled and unskilled workers migrating between the developed and developing worlds as geo-political barriers continue to diminish. Companies should be ready to manage their workforces in this new reality,” he said.
"Multinational corporations can and should begin preparing for this new environment by establishing leadership groups, exposing staff to international cultures and drawing on local staff to manage country offices,” Salt added. “These and other steps have been effective strategies that have helped to ease the transition in several global corporations.”
The KPMG study also predicts that selected countries in Africa, Latin America and the Middle East as well as India will not face the same labor shortages. As a consequence, economic migration from areas of labor surplus to areas of labor demand may occur later in the century.
"This would be the ultimate expression of Thomas Friedman’s concept of the flat world: first the globalization of capital, then information, technology and work tasks and now the globalization of talent and labor," said KPMG’s Salt.
"The face of the international workforce is changing,” he added. "Labor and talent will flow between countries. Generation Y already has a global perspective thanks to the Internet and the affordability of international travel. They are taking this mindset into the workplace and are looking for global opportunities for migration and career advancement."
A series of steps were identified in the study to help mitigate issues associated with managing a global workforce. Some of these steps include:
establishing a future leaders group
transferring management of local offices to local staff
exposing staff to global cultures
pursuing a policy of workplace diversity
developing tailored career plans.
The KPMG study — which draws on data from the United Nations Population Division and interviews with key executives who have each had more than 25 years of experience in managing a global workforce — was commissioned by KPMG's International Executive Services practice.
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