Global Talent Shortage: Understanding the Causes and Solutions

All around the world, leaders and companies have been searching for talent. Many come up short. You may have felt it too. There is a global talent shortage threatening the operations of many businesses and corporations. 

Tracy Brower, a Ph. D. sociologist, wrote for Forbes that the shortage of talent is significant and that its impact has far-reaching effects.

When you look at the numbers, 75% of employers globally find it challenging to fill in roles. This level of talent scarcity has been trending for the past three years. 2022 saw 75%, while 2023 had 77%. The trend may continue next year.

Consider offshoring as a viable solution. 

Offshoring to the Philippines has proven beneficial for many companies. Some of the commonly outsourced professions to the country include accountants, tech support, and IT operations. These successful offshoring instances help businesses cope with the accounting talent shortage and tech talent shortage. You can take advantage of offshoring as well.

Main Challenges of Global Talent Management

Aging Workforce

The global talent shortage in 2024 stems from several reasons, including a generation of workers aging out towards retirement. In 2020 alone, 65-year-olds and older numbered 727 million. The number is expected to double by 2050.

With the older generation of workers based domestically retiring, fewer working-age people are left. Qualified employees are leaving with little to no replacements for them.

Skill Shortage

A skill shortage means fewer people have the right skills to fulfill work responsibilities. Many companies are seeing this, finding fewer candidates who can match their skill needs. 

According to the World Economic Forum, millions of prime working-age individuals are automatically excluded from positions requiring bachelor’s degrees. This fact reflects the plight of companies that cannot find qualified workers and the frustration of unqualified workers who cannot find work.

Wealth Increase

A rising trend of wealth increase may also be a reason for the labor shortage. By 2027, global wealth is expected to rise by 38%. The trend reflects increased personal savings in terms of real estate, stocks, shares, and more. With more people achieving financial stability, most of them are finding ways to work less.

Global Talent Shortages: Country Overview

United States

Companies in many developed countries are scrambling for labor supply. The United States have a 70% labor shortage, according to ManpowerGroup. It is not as high as Japan, Germany, Greece, Ireland, Portugal, and India with talent shortages in the 80 percentile rank. Yet 70% is still an alarming level.

United Kingdom

The UK is also one of the top countries with the greatest labor shortage. It has an 80 percentile ranking, tied with France, Canada, and Brazil.

The lack of talent directly relates to a skill mismatch or skill shortage.

The skill shortage list in the UK includes auditing, nursing, accounting, business development, and understanding of KPIs. There is also a digital talent shortage as companies seek programming, coding, and software development skills.

Singapore

For a highly advanced society, Singapore ranks next to the UK in terms of talent need. It ranks with a 79% labor shaortage, along with Romania, Slovakia, and Hong Kong. 

The Singapore talent shortage can be seen clearly in industries like administration and support services, as well as wholesale trade. Companies in these sectors are coming up short in candidates who fit their requirements.

Australia

Australia ranks next to Singapore at 78% in labor shortage. This trend is reflected by the skill shortage list in Australia in 2023 that highlights the health and IT industries. 

The lack of skills in these highly technical occupations is why there is a big health and IT talent shortage in Australia. Other professional occupations are suffering next to the health and tech industries.

Industry and Profession-Specific Overviews of Talent Shortage

Looking at the worldwide talent shortage by industry, the health and life sciences lead the pack at 77%. In addition, the consumer goods and services; transport, logistics and automotive; and information technology industries all have a 76% talent need. 

These percentages show that companies substantially lack ways to cope with the global tech talent shortage and other labor supply concerns.

Based on profession, there is also a cybersecurity talent shortage and a data science shortage. These scarcities are reflected by the overwhelming demand in IT and data skills. Engineering, sales and marketing, and operations and logistics follow in the list of in-demand technical skills.

Consider Offshoring as a Talent Solution

If finding qualified candidates locally has become difficult to accomplish, consider offshoring solutions to the Philippines. 

Offshoring opens the doors to finding the best talent beyond your location. Filipino remote workers often have degrees, qualifications, and experience that fill long-open positions.

In addition, offshoring brings benefits like cost efficiency, streamlined operations, and a more scalable business. These advantages are based on cultural and characteristic factors unique to remote workers in the Philippines. The factors are the reason why the Philippines is such a popular outsource location.

Offshore Business Operations to Solve a Shortage of Talent

The lack of talent and skills is at a worrying level around the world. Companies may no longer rely only on domestic workers to fill job vacancies. However, there are untapped labor markets such as in the Philippines. Businesses need to be mobile and flexible to dip into these markets.

By offshoring, big or small organizations may fill in the gaps in their operations. Develop an offshoring strategy to build your own offshore staff in the Philippines. If you are still on the fence, check how nearshoring, offshoring, and onshoring work to help you decide how to best supply your labor needs.