Korn Ferry Study Reveals Company Payrolls Could Soar Long-Term Due to Global Skilled Talent Shortages
-- Study Shows that by 2030, Global Deficit of In-Demand Employees
Could Cost Companies Trillions --
-- By 2030, Average Pay Premium for Skilled Workers Could Be More Than
“The new era of work is one of scarcity in abundance: there are plenty
of people, but not enough with the skills their organizations will need
to survive,” said
Korn Ferry’s Salary Surge study estimates the impact of the global talent shortage, as identified in Korn Ferry’s recent Global Talent Crunch study, on payrolls in 20 major global economies at three milestones: 2020, 2025 and 2030, and across three sectors: financial and business services; technology, media and telecommunications (TMT); and manufacturing. It measures how much more organizations could be forced to pay workers, above normal inflation increases.
The salary surge could undermine market dominance within sectors:
Financial and business services face a potential wage increase of more
$440 billionby 2030; this is more than double the wage premium of the other sectors examined.
The wage premium for TMT could almost triple within the next decade,
surging from more than
$59 billionin 2020 to $160 billionby 2030.
Manufacturing, a critical driver of growth for many emerging
economies, could stall under the impact of additional salary increases
of more than
$197 billionby 2030.
The study also reveals the huge impact the salary surge will have at a country level:
U.S. and Japanese companies can expect to pay the most: the U.S. could
face a wage premium of more than
$531 billionby 2030; Japanis predicted to pay approximately an additional $468 billionby 2030.
Smaller markets with limited workforces are likely to feel the most
pressure. By 2030,
Singaporeand Hong Kongcould expect salary premiums equivalent to more than 10 percent of their 2017 GDP**.
U.K.and Francecan expect a better short-term outlook, by 2030 the U.K.’s wage premium may be equivalent to 5 percent of its 2017 GDP** and France’s may reach 4 percent of its 2017 GDP**.
Chinacould see an additional salary increase of more than $342 billion. Indiais the only economy that can expect to avoid upward spiralling wages, as unlike any other country in the study, it will have a highly skilled talent surplus at each milestone.
The average pay premium (what employers could have to pay over and
above the amount that salaries would rise over time due to normal
inflation) per worker across the 20 economies is
$11,164per year; however, Hong Kongcould face a staggering $40,539per year per highly skilled worker; Singaporecould expect to pay an extra $29,065; and Australia $28,625more by 2030.
“Buying in talent from the market is unsustainable. Instead, companies
must focus on engaging and reskilling their current workers,” said
“In tomorrow’s world of work, the employees who will succeed won’t necessarily be the people with the highest level of academic achievement,” said Guarino. “Instead, they will be the ones who are adaptable and willing to learn, with enough flexibility to handle rapidly shifting working environments and less hierarchical structures. Companies need to identify the talent of tomorrow and help them achieve their potential.”
**GDP figures based on 2017 IMF estimates
*About The Salary Surge Study
The study assesses wage increases by mapping Korn Ferry’s proprietary global pay data against the skilled labor shortage revealed in The Global Talent Crunch to estimate its impact at three future milestones: 2020, 2025, and 2030. The model focuses on three knowledge-intensive sectors within each market that act as critical drivers of global economic growth: financial and business services; technology, media and telecommunications (TMT); and manufacturing, and also examines the remainder of each economy outside of these core industries. The report focuses on highly skilled labor, which is where the most acute shortages are found. The model uses educational attainment as a commonly accepted proxy for skills.
The 20 markets covered span the
Full methodology can be found in The Salary Surge report.
Luke Lacey, 215-861-2653