The salary surge
July 13, 2018
A global shortage of highly skilled employees could dramatically drive up salaries for the most in-demand workers, resulting in an additional $2.515 trillion or more in annual labor costs by 2030 for organizations around the world. Our new study, The Salary Surge, finds that the largest economies, including the United States, China, and Germany, can expect rapidly escalating employee costs.
The costs do not end there: World economies could fail to generate $8.452 trillion in revenues by 2030 due to talent shortages. When coupled with higher labor costs, the combined impact could jeopardize profitability and undermine the effectiveness of business models.
As revealed in our earlier study, The Global Talent Crunch, demographic trends, under-skilled workers, and tightening immigration will likely result in sizeable future labor shortages that cannot be offset even with productivity gains enabled by technology. As automation advances, the gap in higher- and lower-skilled workers is widening. On one side is an increasing pool of low-skilled workers whose jobs are being threatened by digital advances. On the other, is an in-demand pool of highly skilled workers whose talents are increasingly scarce and valuable. As a result, salaries paid to the highest-earning workers will increase far above that paid to the rest of the workforce, effectively creating a two-tier talent system.
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