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Thailand: Talent shortage threatens growth
Already a major issue, skilled talent shortages will continue to impede growth, and if not addressed could have a significant impact on major Asia-Pacific economies by 2030, according to a study by the global organisational consulting firm Korn Ferry.
“Companies must work to mitigate this potential talent crisis now to protect their future,” said Michael Distefano, president of Korn Ferry Asia Pacific. “Left to run its course, this shortage will severely affect the growth of markets across the region.”
The Korn Ferry Global Talent Crunch study projects a talent deficit of more than 12.3 million workers by 2020, rising to a shortage of 47 million workers and $4.24 trillion in unrealised annual revenue across the region at 2030.
The findings are based on estimates of the gap between future talent supply and demand in 20 major economies at three milestones — 2020, 2025 and 2030 — and across three sectors: financial and business services; technology, media and telecommunications (TMT); and manufacturing.
The 20 developed and developing economies covered were: the Americas: Brazil, Mexico and the US; Europe, the Middle East and Asia: France, Germany, the Netherlands, Russia, Saudi Arabia, South Africa, the UAE and UK; Asia-Pacific: Australia, China, Hong Kong, India, Indonesia, Japan, Malaysia, Singapore and Thailand.
Productivity growth projections from 2016 to 2030 are calculated based on the sectoral average compound annual growth rate in productivity (in constant US dollars per worker) in 2000 to 2015.
The study identifies numerous ways the talent deficit could threaten economies and sectors across Asia Pacific:
– China will feel the talent shortage most acutely and could lose out on copy.43 trillion in annual revenue not generated by 2030 — one third of the region’s total opportunity cost.
– Financial and business services will be hardest hit across the region, with a deficit of 3.7 million workers by 2030, resulting in an annual opportunity cost of $440 billion if labour shortages are not addressed.
– Significant talent deficits in manufacturing and TMT in China and Japan (3.2 million combined by 2030) puts the region’s global dominance at risk.
– Asia-Pacific faces an imminent labour shortage of 12.3 million workers by 2020, rising to 47 million by 2030 at an annual opportunity cost of $4.24 trillion.
– The financial and business services sectors of China and Japan face an annual opportunity cost of copy47.1 billion and copy13.6 billion respectively by 2030 — more than half the sector’s ungenerated revenue for the region. This places them second and fourth for greatest sector opportunity cost among the 20 economies analysed (behind the US at No.1).
– The dominance of China’s manufacturing sector is at risk — it faces a shortage of 1 million workers and losing out on $71.4 billion by 2030.
– Japan’s TMT powerhouse status is also under threat — it faces a shortage of more than 500,000 workers, losing out on $47.8 billion in potential annual revenue by 2030 — equivalent to 20% of its entire sector — a sectoral opportunity cost second only to the US.
– Technological advancement across all sectors of the Asia-Pacific economy could be hindered by an acute talent shortage of 2 million TMT workers, at an annual opportunity cost of copy51.6 billion by 2030.
– India is the only economy among the 20 studied with a potential talent surplus, with a predicted excess of 245.3 million workers by 2030.
– “Companies across Asia-Pacific must act now to future-proof their businesses,” said Panuwat Kanchanosot, senior principal with Korn Ferry Hay Group in Thailand. “Left unaddressed, the talent crunch will severely affect the growth of key markets and sectors.”For Thailand, the study specifically revealed:
– The impact of the labour shortage on manufacturing is forecast to be $8.1 billion, second only to China, by 2030.
– The impact on the technology, media, and telecommunication sector alone would be copy.8 billion.
– The impact on the financial and business services sector would be $6.2 billion.
– “The right talent is the greatest competitive advantage there is for an organisation — and that talent is getting scarcer every day,” said Mr Panuwat. “In the face of such acute talent shortages, workforce planning and a comprehensive understanding of the talent pipeline are critical.
– “The future will be built on the effective partnership between people and technology. 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.”
– Globally, the study reveals a potential crisis with a sizable mismatch between supply of available workers and business demand:
– The United States, Japan, France, Germany and Australia face the largest threat in the near term, with a combined opportunity cost of copy.88 trillion by 2020.
– Labour shortages in global financial and business services are the most acute, with a potential deficit of 10.7 million workers by 2030.
– Technological advancement across all sectors of the global economy could be hindered by an acute global labour shortage of 4.3 million TMT workers by 2030.
– Manufacturing is facing a global talent deficit crisis of 7.9 million workers by 2030, despite being the only sector projected to have a surplus of highly skilled workers in 2020.
– India is the only economy in the study maintaining a talent surplus in 2025 and 2030.
– Skilled talent shortages will hit global economic growth by 2020.
Developed markets will be hardest hit by the imminent talent shortages. The shortfall in the US alone could leave copy.75 trillion of annual revenue on the table by 2030 — equivalent to 6% of the country’s economy. Germany could lose out on $630 billion annually by 2030 — equivalent to 14% of its economy. The UK faces a shortage of 676.2 million workers in financial and business services, losing out on $90 billion in annual revenues — equivalent to 7% of the sector — by 2030.
Source: https://www.bangkokpost.com/business/news/1460610/talent-shortage-threatens-growth