India will be the only country to have a highly-skilled labor and skilled talent surplus till 2030, and at every preceding milestone Says Korn Ferry Study
Summary-Indian organizations will witness a favorable talent forecast according to a recent Korn Ferry study. However, to attract skilled talent high salaries are demanded whose financial burden will be faced by the global companies. Salary Surge study shows that MNCs will spend heavy amounts for skilled employees by 2030
Indian companies will no more have to spend heavy amounts to attract high skilled talent over the next decade as it is predicted that by 2030 the country will have a highly skilled surplus. These predictions and studies are a part of ‘The Salary Surge Study’ conducted by Korn Ferry which estimates the impact between the demands of payrolls of 20 major global economies and their future labor supply. The research also studies the impact on each economy at three future milestones: 2020, 2025 and 2030 which mainly emphasizes on highly skilled labor. Though the focus of the study will be on all sectors but the three critical sectors for chief study are: financial and business services, technology, media and telecommunication (TMT) and manufacturing.
The study even uses educational qualification as a substitution for skills. The study fundamentally calculates how much an organization could be forced to pay workers which is actually the average pay premium. The 20 countries to be included in the study are: The Americas (Brazil, Mexico, and the U.S.), EMEA (France, Germany, Netherlands, Russia, Saudi Arabia, South Africa, U.A.E., U.K.) and Asia Pacific (Australia, China, Hong Kong, India, Indonesia, Japan, Malaysia, Singapore, Thailand).
The following are the study Highlighs:
- India will be the only country to have a highly-skilled labor skilled talent surplus till 2030, and at every preceding milestone.
- More than $1 trillion can be budgeted to APAC companies for a deficit of in-demand employees by 2030 as a skilled labor premium in the region could be more than $14,500 per employee annually.
- By 2030, companies in Japan are predicted to pay most to their workforce which is approximately an additional $468 billion by 2030.
- Countries like Singapore and Australia are expected to pay $29,065 and $28,625 extra respectively whereas Hong Kong could see the highest average premium pay of $29,065, by 2030.
- China’s organizations are expected to foot on an additional wage bill of more than $342 billion.
- Markets which are small and have a limited talent supply are prone to bearing maximum brunt as countries like Singapore and Hong Kong are predicted to pay salary premiums equivalent to more than 10% of their 2017 GDP.
- The surgical salary can somehow be harmful to the growth of manufacturing sector in emerging economies.
- More than $531 billion premium is expected to be paid by the companies in U.S.A which is the highest in the world.
- A potential wage premium of $176 billion (highest in EMEA) is faced by Germany.
- By 2030, countries like the U.K and France are expected to do better in short term. This is mainly because U.K’s wage premium might touch 5% of its 2017 GDP levels and that of France may reach 4% of its 2017 GDP.
- The shortage of talent is expected to add $2.5 trillion or an average pay premium per worker of $11,164 per year.
“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. While overall wage increases are just keeping pace with inflation, salaries for in-demand workers will skyrocket if companies choose to compete for the best and brightest on salary alone. “Says Dhritiman Chakrabarti, Korn Ferry Head of Rewards and Benefit. For organizations around the world, it is a cause of concern, and thus they are working more than their regular hours to be ready for the future.
Chakrabarti believes in putting efforts in the engagement and re-skilling of the current workers rather than buying talent from the market.