The Workforce Crisis of 2030

Back in October 2014, Rainer Strack gave a TED talk in Berlin, called, "The Surprising Workforce Crisis of 2030 - And How to Start Solving it Now". Since then, the ideas discussed in this video, have generated a mass of analysis and head scratching, as well as an awesome 1.2 million views.

See Also: Millennials More Educated But Less Employed Than Generation X

The talk - and the subsequent debate - describe an imminent problem. In only 15 years, the world will face a massive global labour shortfall, compounded by those working age people who are available, lacking relevant skills, and potentially not even being willing to work in many traditional businesses.

Without a planned solution, Strack contends  national growth, GDP and productivity will slow and start to decrease across many of the worlds’ largest industrial nations. Left unchecked this could have a serious knock on effect, throwing the global economy into crisis.

So are we really peering over the precipice? What has got us into this situation? And how will countries and companies address the impending crisis?

What’s the problem?

The reason for the coming shortfall in working age people is simple - but it is also impossible to quickly rectify, as there are simply not enough babies being born in many places in the world.

The post war baby boomer generation, measured from the end of the Second World War to 1964, was huge, dwarfing the other generations. Birth rates maxed out, meaning that in the US as an example, there were 78.8 million Boomers, compared to around 55 million born during ’Generation X’, which came after.

This pattern was replicated in other countries too. Strack describes 1964, the year of his birth in Germany. The birth rate that year was the highest ever experienced - around double the number of babies compared to more recently, in 2014

This pattern means that the ’bulge’ in numbers of working age people, which is already starting to get smaller, is set to disappear entirely over the next 15 years. There are already more Millennials in the workforce than there are Boomers, as the older (or maybe luckier!) Boomers have started to retire; but with an entirely foreseeable drop in the number of people due to hit working age over the next 15 years, labour shortfalls are inevitable.

As early as 2020 (and - hold onto your hats - that is only 5 years away!), some major economies are likely to find themselves facing a shortage of available workers. Russia, Germany, Japan, Spain and Poland are set to struggle first, with many more nations joining the pack by 2030.

Interestingly, this is not a problem isolated to established industrial nations. Even countries who have only recently experienced rapid growth, such as China, are set to struggle. While China is projected to have a labour surplus through until 2020, the ageing population, and ongoing effects of the one child policy, mean that by 2030 there will be a shortage of available workers to the tune of 24 million people. Italy, The Netherlands and South Korea are also expected to struggle, with a fall of available workers meaning that national productivity and growth slows down or stalls completely.

Will Tech Save The Day?

But will we really need the same number of workers in 15 years’ time, as we do now?

Surely with increased automation comes efficiency; fewer people are actually needed, and we can return to sipping a chilled drink on a beach somewhere, safe in the knowledge that robots are doing all the hard work.

Sadly not. While technology does automate some processes, and therefore reduce the number of people needed, with improved technology comes an ever greater demand for highly skilled workers to design, install, maintain and manage the tech that keeps improving the world.

Strack uses the example of the highly automated automotive industry. If you think of car production lines, the image that comes to mind is of robot arms sweeping gracefully through a sea of parts, in a choreographed (and entirely human-free) process to build our latest ride. The truth is not quite so simple.

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As cars have become more complex, and started to include an increasing amount of delicate electronic equipment, the need for humans to design and install has gone up. Over time, because of the increased sophistication of the technology available for consumers, the automation has not decreased the number of workers required, but kept it stable, while removing many of the lower skill jobs that had previously existed.

So robots might change the face of the employment crisis, but they will not solve it. In fact, they may contribute to a ’hollowing out’ of work, where automated systems are able to remove many mid to low skill jobs, leaving a chunk of the workforce struggling to find suitable employment, even when there are overall labour shortages.

Can Global Migration Solve The Crisis?

A second possible solution, that has never been more pertinent, is migration. With a global freedom of movement, would employees simply go where the market dictated, meaning that countries who had enough (or even a surplus) of working age people, saw their residents hopping over to nations like Germany who were suffering labour shortages?

Economic migration might go some way to helping alleviate the issue in some developed nations. And there is a sizeable chunk of the Millennial population who would be happy to travel across continents to find their dream job. Strack’s research found that 70% of the 21-30 year olds he surveyed would be willing to move for work.

This statistic is promising, but does not show the whole picture. Different nationalities have very different attitudes to moving abroad for work - and naturally some locations are more attractive than others. This means that migration might help some countries, but is not a silver bullet. The most popular prospective destinations for people looking to move for work - according to Strack’s research - were the UK and USA; neither of which are forecast to have labour shortfalls.

Perhaps most importantly, the reasons people (and specifically Millennials) might move for work are quite different to those you might expect. Money features very low on the list, after a whole set of cultural preferences - such as working for a business where there is a good work life balance, where employees feel appreciated and can develop strong relationships with colleagues and their management team.

So What Does This Mean For us?

For those of us in the early stage of our careers, there are several important points.

Technology will continue to shape the skills and expectations of top performing employees. The jobs you will be doing in 15 or 30 years’ time, have likely not even been invented yet, and even in a market with a labour shorfall, those who do not keep up will find themselves out of work.

Relocating may land you the perfect gig. Depending on where you live, you may well find that your skills are in demand overseas. With countries such as the UK and USA not projected to fall short of labour, moving into continental Europe or beyond might mean that you can find great places to develop your skills as well as get a new cultural experience.

And finally, you must remember - and demonstrate - how important you are to your business. The changes to the shape of the workforce mean that all companies should be starting to figure out how to attract, educate, up skill and retain the best possible employees. Businesses across the globe will find themselves with crucial vacancies, and this creates a chance for ambitious and confident employees to step up to the mark.

See Also: Gen Z Vs Millennials - Differences in The Workplace

Being in a business that puts talent at the centre of their strategy can make for some great development opportunities. Seize them by showing how you can help drive your business forward, and the workforce crisis of 2030 could be a fantastic springboard to your career.