The World Economic Forum focused on wages in a recent Article that described a new Report from Hays, the world’s largest specialist recruiter. They highlight another year of change ranging from the tensions rising over trade relations between the US and China; to the uncertainty around Britain leaving the European Union; to the increasing levels of scrutiny against ’Big Tech’ and the ensuing debate surrounding privacy and content.
The IMF forecast a slowdown in global real GDP growth due in large part to the fear of the unknown. The Global Skills Index developed by Hays tracks the trends facing the global labor market. Here are some of the key findings:
Talent mismatch continues to be a problem. One of the major trends is the exponential growth of AI and machine learning, and its overarching impact on many of the issues described within the report. Employers struggle to find suitably skilled workers to fill the required vacancies. The problem is exacerbated by the speed of technology development, with the most sought-after skills seemingly more difficult to come by, creating a real global skills dilemma and causing those unemployed to lose confidence, in turn pushing up underemployment and reducing wage pressure, as well as output.
Two pressures facing numerous workforces worldwide; talent mismatch is becoming worse in a number of markets, and there is now a global threat of wage stagnation. These issues can be partially explained by the rapid growth of technology, but also through other trends, such as the rise of outsourcing, globalisation and non competitive labour markets.
Global unemployment continues to stay at a multi-year low, but at the same time , wage stagnation is a global phenomenon. Research has revealed multiple theories are making an impact, which could be causing traditional economic mechanisms to be obsolete.
The gender pay gap has another aspect to it; the impact of male versus female-dominated careers on gender pay. There is a very real concern around technology taking over roles largely dominated by women, as a number of studies show that female- dominated careers are more susceptible to automation and globalisation.
The report makes several recommendations.
Invest in education, life-long learning and reskilling programmes as a priority for governments and businesses
I have spent considerable time focused on the issues of Education and its tight linkage to the job conversation. The report suggests that there is a real opportunity for businesses to work with educational institutes to ensure the skills of tomorrow are being taught and people are suitably ready for the world of work.
Employers should actively motivate employees to take advantage of flexible working and geographically distant opportunities
Flexible working practices are likely to encourage more people to participate in the workforce. Flexibility and geographic reach support employers need to enlarge their pool of candidates and improve the matching of talented individuals and vacancies.
Companies should embrace diversity in the workforce in all its forms
The division within gender-dominated occupations contribute to the the gender pay gap . Resolving this issue increases the talent pool for employers. The report suggests a focus on work schemes for mothers who have left employment, and programmes that encourage women to seek careers in traditionally male-dominated sectors, such as technology.
Given the critical nature of the future of work discussion and the enabling role of education, leaders everywhere should invest cycles in understanding the implications and possible responses. Reports like these are a positive step in that direction. This is all part of a great reset, as we look to shift our mindset and institutions to 21st century realities.