Around the world, working-age populations are declining. As this pattern continues, the tight labor market vexing employers today is likely to become permanent—a global “Demographic Drought.”
Workers Wanted Worldwide: Strategies to Succeed in the Global Demographic Drought, a new Lightcast research report, shows that by 2040, growth in the working-age population will slow in 9 of 10 countries around the world, and those populations will in fact decline in 3 of 10. These challenges will require employers, already in a difficult competition for workers, to use even more sophisticated methods of attracting and retaining talent.
The impact of this population shift will be especially acute in certain parts of the world. Southern and Eastern European nations, in particular, are projected to lose far more of their workforces to an aging population than others around the world. At the same time, many countries that are not projected to see their populations decrease—including those in Africa, Latin America, and the Caribbean—are those that face a skills gap when competing with more developed nations in the global economy.
These challenges are going to affect employers of all sizes, but pose a particular challenge to multinational companies. While international hiring and development decisions have always been complex, this changing demographic landscape will present a new set of obstacles.
The report highlights three strategies for employers to succeed in the coming years:
Address challenges keeping people from the workforce. By allowing for flexible work, skill-based (rather than degree-based) hiring, and greater accommodations for health needs and family obligations, businesses can tap into new pools of workers, expanding their potential workforce despite shrinking population growth.
Understand the skills, tech readiness, and innovative capacity in a region. If the workers available are highly skilled, have access to current technology, and can operate in a dynamic and innovative environment, then they can work more efficiently and compensate for fewer workers overall. To ensure that capacity, employers should consider investing in training and support to help workers adapt to new changes and developments in their field.
Value the workers already in the fold. The Great Resignation and the ongoing tight labor market have shown that workers aren’t disposable, and employees who leave won’t be easy to replace. By understanding and adapting to the unique challenges of their industry, region, and market, companies can improve their ability to attract and retain talent in a labor market that favors workers.
The global labor shortage is already making itself felt for employers around the world, and as population trends continue, the strain on anyone hiring will only continue to grow. Aging populations and shifting immigration patterns, combined with rapidly changing demand for skills, will combine to make hiring harder in the years to come. To learn more about the global demographic drought, and dive deeper into strategies to address it, download the Workers Wanted Worldwide report below.