The Salary Surge and The Global Talent Crunch Reports, released by Korn Ferry in 2018, estimated the global labour supply and demand, and the wage increases in 2020, 2025, and 2030.
Both studies categorised the talents of the three major knowledge-intensive industries (financial and business services, technology, media, telecommunications, and manufacturing) into three groups: Highly skilled workers (Level A), Mid-skilled workers (Level B), and Low-skilled workers (Level C).
By 2030, all current world’s leading financial centres will experience a deficit of 2.6 million Level A workers, which results in $1.313 trillion in unrealised revenue. Small economies with important financial centres such as Hong Kong can expect to lose revenue equivalent to 12% of its total economy due to the financial services skills shortage.
Technology advancement will also be stalled as a result. Hong Kong is also expected to face the hardest hit across the manufacturing sectors of 20 countries.
“To deal with this skills mismatch, we’re seeing more companies building their own talent pipeline by hiring straight from school or college,” Jean-Marc Laouchez, president of the Korn Ferry Institute suggested.
It is estimated that the salaries will be pushed up for the limited pool of highly skilled workers and the salary bills rise directly in proportion to labour shortages. The expected talent deficit of works in Hong Kong could result in employers having to pay an annual wage premium of US$19 billion by 2020 and and US$30 billion by 2025.
Hong Kong employers may be paying an additional US$40,500 in annual salary per highly skilled worker by 2030, the highest among all countries. The shortage of Hong Kong greatest skilled talents in proportion of total demand would be almost three times (44%) larger than the global average (16%). Since skilled talent will be in short supply globally, acquiring talents from other countries does little more than slapping a band-aid on a much deeper problem.
“Employers will need to concentrate on reskilling lower-level workers. This involves identifying those who are adaptable and flexible enough to be successful in the new world of work, and putting robust training and strategic workforce plans in place,” Mark Thompson, senior client partner of Korn Ferry commented.