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Workforce Management FIGURE 1: PROJECTED LABOR DEMAND AND SUPPLY HIGH-SKILL WORKERS China LOW-SKILL WORKERS -23 million 5 million 20 million 6 million -13 million 27 million -16 to -18 million 32 to 35 million -1 million India Advanced economies MEDIUM-SKILL WORKERS * Advanced economies comprise 25 countries with EDP per capita greater than $20,000 in 2010. 95 million workers with the proper skills for employment. And the educated workers than it can supply (see Figure 1). This shortfall entire world will likely have 40 million too few college-educated stems from a combination of the country's aging population, rapid workers. growth in the service sector, and a new focus on skill-intensive manufacturing. Further complicating the situation is the number These figures seem a bit unbelievable, considering that the number of women already in the workforce. At 82 percent, China's female of unemployed workers worldwide sits at 197 million people. labor participation rate is the world's highest, which means it By the end of the year, this number is expected to grow to 202 cannot tap this population as much of a source of new workers. million. According to the International Labour Organization, total The country can increase its share of college graduates in the labor worldwide unemployment will continue to grow to 210.6 million by force, but to accomplish a six-percent increase by 2020 would 2017. What has caused this large disparity? There are a number of require 85-percent of China's secondary-school graduates to finish college. factors at play. Economic growth has slowed worldwide, especially India faces an entirely different situation. It might actually have a in China, India, Latin America, and the Middle East. Economic surplus of highly skilled workers—but not enough medium-skilled problems continue to plague the euro zone. Companies are still workers to fill jobs in the growing construction, manufacturing, uncertain about government policies, consumer spending, and economic stability—all of which cause delays in hiring decisions. But the big problem is that companies throughout the world are struggling to find workers who have the skills that match their needs. In the last decade, job growth in the United States has been attributed to positions that require complex problem-solving and contextual judgment. Jobs that are based on repetitive skills and one-to-one transactions are decreasing, and the educational system is not keeping pace with the change. This situation is not limited to the U.S. For example, again according to McKinsey, southern Europe could have as many as eight million workers without a post-secondary education who are unable to find work by 2020. And in countries with aging populations, such as Japan and Germany, the smaller numbers of young workers will cause an even larger divide between supply and demand. retail, wholesale, and service sectors. Additionally, the country could have 27 million too many low-skilled workers by 2020. To position these low-skilled workers to take advantage of opportunities, India will need to focus on job creation and substantially invest in improving education, especially vocational training. Unfortunately, these numbers will only get worse as the global economy picks up steam. An ever-widening divide could lead to significant social problems, including higher unemployment, lost generations, and social unrest. Boosting Efficiency In a recent survey by the McKinsey Global Institute and The Conference Board, 75 percent of human resources professionals reported the talent shortage has negatively impacted their businesses. To counteract these effects, companies will need to Seeking Bridges find more efficient uses for their skilled employees. One strategy Unfortunately, this gap won't be easy to bridge. To keep pace, is to pass less strategic or value-added tasks to others, so the college completions must grow by 2.5 times the historical rate of most-skilled employees can focus on value-creation activities. increase, and workforce participation by women and older workers Other companies are disaggregating jobs. In other words, they are must double. One potential solution is to encourage employees to breaking jobs into highly specialized tasks, allowing employees to take advantage of massive open online courses (MOOCs). focus on the areas in which they are most skilled to maximize scarce By 2020, China alone will likely need 23 million more college- talent. MAY 2013 | www.hrotoday.com [49]