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-- Study Shows that by 2030, Global Deficit of In-Demand Employees Could Cost Companies Trillions --
-- By 2030, Average Pay Premium for Skilled Workers Could Be More Than $11,000 Per Worker Per Year --
Los Angeles, June 20, 2018 – Salaries for highly skilled workers could boom as global talent shortages take hold, according to a new study* by Korn Ferry (NYSE: KFY). Left unchecked, the salary surge could add $2.5 trillion to annual payrolls globally by 2030, jeopardizing companies’ profitability and threatening business models.
“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,” said Bob Wesselkamper, Global Head of Korn Ferry Rewards and Benefits Solutions. “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.”
Korn Ferry’s Salary Surge study estimates the impact of the global talent shortage, as identified in Korn Ferry’s recent Global Talent Crunch study, on payrolls in 20 major global economies at three milestones: 2020, 2025 and 2030, and across three sectors: financial and business services; technology, media and telecommunications (TMT); and manufacturing. It measures how much more organizations could be forced to pay workers, above normal inflation increases.
The salary surge could undermine market dominance within sectors:
The study also reveals the huge impact the salary surge will have at a country level:
“Buying in talent from the market is unsustainable. Instead, companies must focus on engaging and reskilling their current workers,” said Alan Guarino, vice chairman, Korn Ferry CEO and Board Services. “With existing highly skilled workers, leaders must focus on what really drives retention. We know that employees who have the opportunity for career development, benefit from inspiring leadership and feel their work has purpose are more likely to stay at an organization, and—crucially—will be more engaged and productive.”
“In tomorrow’s world of work, the employees who will succeed won’t necessarily be the people with the highest level of academic achievement,” said Guarino. “Instead, they will be the ones who are adaptable and willing to learn, with enough flexibility to handle rapidly shifting working environments and less hierarchical structures. Companies need to identify the talent of tomorrow and help them achieve their potential.”
**GDP figures based on 2017 IMF estimates
For further information:
*About The Salary Surge Study
Following the Korn Ferry Global Talent Crunch study, which modeled the gap between future labor supply and demand to estimate the impending skilled talent shortage, The Salary Surge study estimates the impact of this shortage on payrolls in 20 major global economies.
The study assesses wage increases by mapping Korn Ferry’s proprietary global pay data against the skilled labor shortage revealed in The Global Talent Crunch to estimate its impact at three future milestones: 2020, 2025, and 2030. The model focuses on three knowledge-intensive sectors within each market that act as critical drivers of global economic growth: financial and business services; technology, media and telecommunications (TMT); and manufacturing, and also examines the remainder of each economy outside of these core industries. The report focuses on highly skilled labor, which is where the most acute shortages are found. The model uses educational attainment as a commonly accepted proxy for skills.
The 20 markets covered span the Americas (Brazil, Mexico, the U.S.), EMEA (France, Germany, the Netherlands, Russia, Saudi Arabia, South Africa, the U.A.E., the U.K.) and Asia Pacific (Australia, China, Hong Kong, India, Indonesia, Japan, Malaysia, Singapore, Thailand).
Full methodology can be found in The Salary Surge report.
About Korn Ferry
Korn Ferry is a global organizational consulting firm. We help companies design their organization – the structure, the roles and responsibilities, as well as how they compensate, develop and motivate their people. As importantly, we help organizations select and hire the talent they need to execute their strategy. Our approximately 7,000 colleagues serve clients in more than 50 countries.