It’s possible that I’ve been drilling this topic too much for too long, but it seems the market is really starting to take notice. Perhaps that means it’s time for me to start talking about something else. Here’s a last shot and some summary data of what the talent brain drain means. This is from EY:
Aging Workforce by the Numbers
- Of survey respondents who believe that the aging workforce is an issue that must be dealt with, 53 percent said it will lead to a workforce shortage.
- Sixty-three percent said that retirements will lead to a “brain drain.”
- While almost 15 percent of respondents’ employees are eligible to retire in the next 5 years, they estimate that just over 10 percent of their current workers are likely to do so.
- Approximately 40 percent noted that their top human capital concern is the availability of talent over the next five years. Other highly ranked areas of concern include retention of key employees and talent management (i.e., ensuring that the right employees are in the right positions).
- Over 85 percent had no formal retention programs in place. Of those who did, hiring retirees as consultants or contractors, retention bonuses, promoting a culture of generational diversity and pre-retirement planning programs proved to be the most popular.1
Now that everyone seems sufficiently freeked out, I’ll go on record that it may not be all that bad. Globally, talent is on the rise. Countries like India, China, South Korea are all advancing at incredible rates. With the globalization of work and corporations, the utilization of foreign workforces is much more viable.
The other way of looking at this is that it’s about time western Europe and the U.S. had a good competitive scare. The west currently has much of the world’s wealth, but a very small percentage of the workforce and thus, a very small percentage of potential talent. Universities are increasingly flooded by students who plan on working outside of the U.S. and many Asian countries are pouring cash into training students in engineering and other hard sciences. Innovation is no longer the domain of wealthy western countries.
Why is this good? For perhaps the first time in history, there’s enough to go around (yes, that’s debatable). While I don’t see many non-western countries in dominant economic positions other than those already mentioned, the global economy should support wealth generation in both established and emerging countries. If you’re an economics, think about the “production possibility frontier” (PPF). This macroeconomic theory states that the more trade parties you have, the better off you are. A shortage of talent is a concern for companies that need to keep growing. However, this shortage in the U.S. and western Europe should bring a new level in global economic prosperity.
OK – so what is there to do? Well, you have China with a jobs shortage, Smart countries encouraging Chinese students to stay and work after graduation, and research stating that employers play a key role in immigrant sentiment.
So sit back, relax and:
- Cry over the lack of talent,
- Realize that while the West may have to suffer for it, the rest of the world is better off,
- Go nab yourself some talent from abroad.
(ok – I’m done with my optimist hat. Back to regular from now on)