Organizations around the world are expected to add more than $2.5 trillion to their annual labor costs by 2020 due to the global shortage of highly skilled workers, research from Korn Ferry has found.
The US is predicted to be the hardest-hit economy, as it is expected to experience a rapidly increasing wage premium, paying an anticipated additional $531bn to secure the right talent within the next 12 years.
The predictions followed a previous Korn Ferry report that found the talent shortage could cost companies as much as $8.5 trillion in unrealized revenue by 2030.
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"Employers will need to concentrate on reskilling lower-level workers," advised senior client partner, reward consulting, for Korn Ferry, Mark Thompson. "That involves identifying those who are adaptable and flexible enough to be successful in the new world of work and putting in place robust training and workforce plans."
The report also advised that, despite demand fluctuating and the rise of the gig economy, companies should avoid the temptation to utilize freelancers. This "makes sense where demand is temporary", Korn Ferry said, but "it's not a sustainable approach to bridging what we believe is an endemic problem".
By 2020, Korn Ferry predicted that the US wage premium will be $292bn, reaching $400bn by 2025.
For the overall economy, Korn Ferry predicted that percentage increases on wage premiums between 2020–30 will be 152%. The report noted that, with its reliance on skills and knowledge, the financial industry is predicted to face the most damage from the talent shortage, seeing a wage premium increase of 161%.