future talent in a global context
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“Future Talent in a Global Context – The Implications for Higher Education”.
David Arkless
Senior Vice-President, Global Corporate Affairs
Now….
…Next
2“Future Talent in a Global Context – The Implications for Higher Education”.
May 24 2008Manpower
• Manpower Inc. (NYSE: MAN) is a world leader in the employment services industry.
• A $21 billion company, 85 percent of revenue from outside of the US.
• Permanent, temporary and contract recruitment; employee assessment and selection; training; outplacement; outsourcing and consulting.
• 4,500 offices in 78 countries and territories.
• 400,000 clients per year.
• 4.4 million placed in permanent, temporary and contract positions in 2006.
3“Future Talent in a Global Context – The Implications for Higher Education”.
May 24 2008Manpower
• Developing countries getting better in the game of globalization.
– Annual GDP growth averaging:
– 3% in 1980-90
– 4% in 1990-2000
– 5.7% in 2000-07
– Close to 8% forecasted for 2005-08
4“Future Talent in a Global Context – The Implications for Higher Education”.
May 24 2008Manpower
• Developing countries getting better in the game of globalization.– Annual GDP growth
averaging:
– 3% in 1980-90
– 4% in 1990-2000
– 5.7% in 2000-07
– Close to 8% forecasted for 2005-08
– and their share of trade is growing:
– 22% in 1980
– 32% in 2005
– 45% in 2030 projected
5“Future Talent in a Global Context – The Implications for Higher Education”.
May 24 2008Manpower
Raw Material Prices
• The world is adjusting to realities of globalization.– Paying more for raw
materials, since 2000.
– Energy prices have three-folded.
– Industrial raw materials have more than doubled.
– Foodstuff is about 1.5 times more expensive.
6“Future Talent in a Global Context – The Implications for Higher Education”.
May 24 2008Manpower
Ca
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rom
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illi
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ns
1860 1900 1940 1980 2020 2060
• The world is adjusting to realities of globalization
– Paying more for raw materials, since 2000
– Energy prices have three-folded
– Industrial raw materials have more than doubled
– Foodstuff is about 1.5 times more expensive
– Reacting to increased loads on the environment
– About 700 multilateral agreements
– Global carbon markets valued at € 22.5 Billion in 2006
7“Future Talent in a Global Context – The Implications for Higher Education”.
May 24 2008Manpower
• The global economy created 40M formal sector jobs in 2006– China 10M
– EU 3.5M
– US 2M
• Employment intentions vary.– Employers in Asia and the
Americas are the most upbeat
– European employers are more careful
– 10-15% of European employers plan to increase staff
– 75-85% plan no changes0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%
Fr anceNether lands
BelgiumGer many
ItalyAustr iaSwedenUnited
Ir elandSwitzer land
SpainNor way
Costa RicaHong Kong
ChinaT aiwan
United StatesCanadaMexico
IndiaSouth Af r icaNew Zealand
Ar gentinaAustr al ia
J apanP er u
Singapor e
IncreaseDecreaseNo changeDon’t know
FranceNetherl
Belgium
ItalyGermany
Austria
UKSweden
Ireland
NorwayCosta R
TaiwanChina
Hong K
USCanadaMexico
India
N ZealandS Africa
AustraliaArgentina
JapanPeru
Singapore
SwitzerlSpain
0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%
Employers’ hiring intentions, 2q 2007
Source: Manpower Inc.
8“Future Talent in a Global Context – The Implications for Higher Education”.
May 24 2008Manpower
Manpower Professional Survey 2006
Of 32,000 employers surveyed in 26 countries and territories,
29% said they would have hired more professional staff if
candidates had had the necessary skills.
33% of employers in India said they would have hired more permanent professional staff
if they could have found candidates with the right skills.
9“Future Talent in a Global Context – The Implications for Higher Education”.
May 24 2008Manpower
1. Skilled Manual Trades.2. Sales Representatives.3. Technicians.4. Engineers.5. Management/Executives.6. Laborers.7. Administrative positions.8. Drivers.9. Accounting & Finance staff.10. Machinists/Machine Operators.
Total Number of Respondents: 42,585Employers indicating difficulty filling positions: 31%Employers indicating no difficulty filling positions: 69%Margin of error: +/- 3.9%
GLOBAL
2008 Manpower Talent Shortage Survey
31 % of employers worldwide are
having difficulty filling positions due to the lack of suitable talent available
10“Future Talent in a Global Context – The Implications for Higher Education”.
May 24 2008Manpower
1. Technicians.2. Sales Representative.3. Management/Executives.4. Sales Managers.5. Machinists/Machine operators.6. Engineers.7. Production Operators.8. Skilled Manual Trades.9. Laborers.10. Restaurant & Hotel Staff.
Total Number of Respondents: 3,900Employers indicating difficulty filling positions: 15%Employers indicating no difficulty filling positions: 85%Margin of error: +/- 1.6%
CHINA
2008 Manpower Talent Shortage Survey
15% of employers in China are
having difficulty filling positions due to the lack of suitable talent available
11“Future Talent in a Global Context – The Implications for Higher Education”.
May 24 2008Manpower
1. Technicians.2. Engineers.3. Skilled Manual Trades.4. Administrative Staff.5. IT Staff.6. Laborers.7. Production Operators.8. Machinists/machine Operators.9. Management/Executives.10. Mechanics.
1. Technicians. 2. Engineers.3. Receptionists.4. Laborers.5. Sales Managers.6. Drivers. 7. Skilled Manual Trades.8. Mechanics.9. Management/Executives.10. Accounting & Finance Staff.
Costa Rica Argentina
Source: 2008 Manpower Talent Shortage Survey
2008 Manpower Talent Shortage Survey
LATAM: Employers having the most difficulty finding the right people to fill jobs are those in Costa Rica (34%) and Argentina (36%)
12“Future Talent in a Global Context – The Implications for Higher Education”.
May 24 2008Manpower
WHAT’S DRIVING THE TALENT SHORTAGE?
13“Future Talent in a Global Context – The Implications for Higher Education”.
May 24 2008Manpower
• Productivity, services and jobs.– for every
manufacturing job lost, ten service jobs have been added.
0 2000 4000 6000 8000 10000 12000
Health
Business services
Educational
Metal
Apparel
Textiles
1960
2002
Number of non-farm jobs, US
thousands
Source:Barbara Hagenbaugh, USA TODAY,12.12.2002
14“Future Talent in a Global Context – The Implications for Higher Education”.
May 24 2008Manpower
Theoretical offshoring potential
0 10 20 30 40 50 60 70 80 90 100
DistributionHotel functions
NursingCustomer-facing
Patient care provisionActuarial
Other prof.health servicesMerchandising
SalesSupply chain mgmt
MarketingProcurementUnderwriting
ClaimsG&A
R&D/prod.developmentBack office
Customer service/supportInternal IT
InvestmentCall centre
Source: McKinsey Global Institute
• Productivity, services and jobs.– for every manufacturing job lost, ten service jobs have been added.
• 1.46 billion service jobs worldwide.– 160 million could theoretically be offshored.
– Estimated to reach 4.1 million in 2008.
% of jobs
15“Future Talent in a Global Context – The Implications for Higher Education”.
May 24 2008Manpower
“As companies shift more sophisticated activities to these (low-cost emerging) markets, they are fighting over a much smaller pool of highly skilled workers to staff these operations. As a result, both labor costs and turnover among highly skilled workers are increasing rapidly, making retention ever more difficult.”
Source: Innovation in Emerging Markets: 2007 Annual Study.Deloitte Touche Tohmatsu, January 2007
Image source: Getty images
Economic Development
16“Future Talent in a Global Context – The Implications for Higher Education”.
May 24 2008Manpower
US APPAREL IMPORTS 1989-2006 (% OF TOTAL APPAREL IMPORTS IN THE US)
0%
5%
10%
15%
20%
25%
30%
1989
1990
1991
1992
1993
1994
1995
1996
1997
1998
1999
2000
2001
2002
2003
2004
2005
2006
China Mexico Vietnam Cambodia
Source: OTEXA data
Cambodia
Vietnam
Mexico
China
• Also developing countries experience job offshoring.– Whilst Mexico lost 7% of
its share of US apparel imports.
– …China gained 19%.
– …and Cambodia and Vietnam entered the game.
17“Future Talent in a Global Context – The Implications for Higher Education”.
May 24 2008Manpower
• Emerging markets face a huge skill gap in moving into higher value services– 13% of university
graduates meet expectations of global business
• High staff turnover rates– Those with skills are in
high demand
• …and wages are rapidly pushed up– Up more than 20% per
year in India’s software industry
18“Future Talent in a Global Context – The Implications for Higher Education”.
May 24 2008Manpower
China
• 3.1 m university graduates per year (2005)
• Young professionals with 7 years of working experience, 8.5 m (2003), incl. 1.6 m engineers
• 600’000 engineering graduates per year
• Only 1 out of 10 suitable to work at a multinational firm
• Young engineers who would today qualify for work at a multinational company: 160’000
• 75,000 leaders who can work in global environments will be needed
– in 2005 they had only 3,000 to 5,000.
India
• Approximately 3m university graduates per year
• Pool of university graduates: 22m (2003)
• Only 25% of engineering graduates and 10-15% of other university graduates are suitable for work in the IT sector
– Possible labour deficit (IT sector): 500’000 in 2010
– Turnover rate: 40%
– Wage inflation: 20-25%
• Unemployment rate of university graduates: 17.2%
– Possibly up to 40% of all university graduates are not productively employed
Fast growing economies with huge labour pools developing rapidly intohigh end of the services market – with huge labour pools but wrong skills
*Source: Deutsche Bank; Tamara Trinh, Alpbach, Aug 30, 2006 McKinsey Global Institute
19“Future Talent in a Global Context – The Implications for Higher Education”.
May 24 2008Manpower
• The number of university graduates will increase by 22 percent in 2006 to 4.1 million.
• The national literacy rate in China is 91 percent among people aged 15 and over.
• And workers now entering the labor force will have had a minimum of nine years’ compulsory schooling.
Is it really that bad in China?
20“Future Talent in a Global Context – The Implications for Higher Education”.
May 24 2008Manpower
90 percent of the world’s top 500 multinationals have now invested in China but
for China to fuel its current growth levels, it needs to develop internally the same
level of talent in seven years that exists now in the UK and France.Image source: Getty images
21“Future Talent in a Global Context – The Implications for Higher Education”.
May 24 2008Manpower
The Growing Pain – Talent Shortage
Source: 2004 survey, American Chamber of Commerce in Shanghai, along with six other Chambers of Commerce
Senior ManagersSevere shortage - 40% of employers indicate difficulty to fill Senior Manager positions.
More difficult and more expensive in future.
Mid-Level Managers
Growing candidate pool.
Demand outstrips supply.
Stiff competition among companies - may ease in 6-8 years.
Blue Collar WorkersEmerging shortage in supply over last 2 years.
Shortage mainly in coastal cities.
Rapidly increasing wages.
Entry Level
White Collar WorkersLarge candidate pool, still growing.
Flat wages due to fierce competition for jobs.
22“Future Talent in a Global Context – The Implications for Higher Education”.
May 24 2008Manpower
Fast growing economies with huge labour pools developing rapidly intohigh end of the services market – with huge labour pools but wrong skills
Offshoring will be a two way street – Jobs are going where people are •EU and US will become recipients
Labour markets will be truly global – People are going where jobs are •ICT makes global work organizations a reality
•Access to tacit knowledge frames how we work – technology will break the barriers
The global war for talent is getting tighter
23“Future Talent in a Global Context – The Implications for Higher Education”.
May 24 2008Manpower
Offshoring will be a two way street
• All the Bangalore tigers have set up development centres in China
• Indian companies have actively invested in all of Europe
• Infosys provides BPO and IT services to international clients from its facilities in the Czech Republic, London, Germany and Mauritius in more 20 languages
• Wipro operates under the Norwich Union brand in the UK
• Wipro’s Wireless Solutions Unit operates out of Finland
• TCS has moved its insurance outsourcing operations to the UK
Labour markets will be truly global
• India’s expanding aviation industry employs 350 pilots from the West
• Online customer service in India employs young Europeans recruited in their home countries
• Over 50Kexpatriates work in India
• Infosys gets 98% of our revenues from outside India
– employs 300 Americans – in India
– Large numbers fr UK planned in 2007
– 126 Americans from leading US universities in training at Infosys’ Mysore campus
• Finance workers unions from around the Asia-Pacific region and India are coordinating action
– against moving jobs to less regulated places
The global war for talent is getting tighter
early signs
24“Future Talent in a Global Context – The Implications for Higher Education”.
May 24 2008Manpower
A declining workforce
162
164
166
168
170
172
174
176
2000 2005 2010 2015 2020
Mil
lio
n
40
45
50
55
60
65
Mil
lio
n EU 15
Turkey
Source: Eurostat and UN Population Division
25“Future Talent in a Global Context – The Implications for Higher Education”.
May 24 2008Manpower
An ageing and declining workforce
2007million
2016million
Increase/De-crease
France <34 15.6 15.2 -2.6%
35-54 17.1 14.2 -3.0%
>55 12.1 14.2 +17.5%
Germany <34 19.0 18.5 -2.6%
35-54 26.1 23.6 -9.4%
>55 19.0 20.0 +5.6%
Italy <34 13.7 11.8 -14.3%
35-54 17.8 18.2 +2.0%
>55 13.0 13.8 +6.0%
Spain <34 10.8 8.5 -21.8%
35-54 12.1 13.0 +8.1%
>55 8.1 9.1 +12.7%
UK <34 15.8 16.0 +1.8%
35-54 17.7 17.5 -1.2%
>55 12.3 14.0 +14.0%
Source: U.S. Census Bureau/Caden Corp.
• European employers will be dealing with increasingly older staff; in the next 9 years:– France +17.5%
– UK +14.0%
– Spain +12.7%
• At the same time there will be less young people to chose from:– Spain -21.8%
– Italy -14.3%
• This is exacerbated by a declining indigenous workforce of about 4%.
26“Future Talent in a Global Context – The Implications for Higher Education”.
May 24 2008Manpower
• The aging workforce conundrum is that the older employees who have the talent companies most need to retain are those who have the financial flexibility and employment options to retire or downshift to a more flexible work arrangement.
• Savvy employers will develop innovative ways of retaining these critically important contributors as long as possible.
26
Understanding and Engaging Older Workers
The key to older worker engagement is to focus on the same issues that are important to other age groups
27“Future Talent in a Global Context – The Implications for Higher Education”.
May 24 2008Manpower
Net immigration flows
Net emigration countries
Net immigration countries
annual average 95-00 Source: United Nations (2002)
Annual net number of migrants, 2005-2015 (‘000)
1,330
748
-329
-647
-1,194
N America
Europe
Africa
Latin America
Asia
Source: UN
UN definition of regions
Migration
28“Future Talent in a Global Context – The Implications for Higher Education”.
May 24 2008Manpower
Mexicans/Hispanics into the US.
East European Union workers to the UK.
Indians/Pakistanis into the UAE.
Pakistanis into Malaysia.
Anyone with skills into Singapore.
Koreans into Japan.
Polish into Germany.
Africans into Europe.
Migration
29“Future Talent in a Global Context – The Implications for Higher Education”.
May 24 2008Manpower
Global Competition
Image source: Getty images
The dynamic nature of society is making it more complex for employers to
manage their workforces, ensuring that they have the right skill sets
available, for the right jobs, at the right time.
30“Future Talent in a Global Context – The Implications for Higher Education”.
May 24 2008Manpower
Four-year degree
Isolated
Tailored programmesOne-size fits all
Global
Cost
Industrial Economy Knowledge Economy
The Knowledge Economy
Virtual learning communities
Forty-year degree
ROI
Local
31“Future Talent in a Global Context – The Implications for Higher Education”.
May 24 2008Manpower
How to survive the Talent Crunch of tomorrow
• A talent shortage can be addressed by reducing the demand for talent or increasing the supply, or even both.
• This means reducing the number of jobs for which talent is in short supply and/or tapping into previously untapped potential in order to increase the total available pool of employable talent.
32“Future Talent in a Global Context – The Implications for Higher Education”.
May 24 2008Manpower
Winning in the Future of WorkReduce demand, increase supply
33“Future Talent in a Global Context – The Implications for Higher Education”.
May 24 2008Manpower
Optimizing Talent Flow
33
34“Future Talent in a Global Context – The Implications for Higher Education”.
May 24 2008Manpower
Joint responsibility for the future of education, skills and learning lies with:
Employers- To implement work training programs, equipping the workforce with ‘soft skills’
that are increasingly in demand in today’s flatter organizational structures.
Government
- To develop educational tools and systems to meet the needs of the knowledge economy and equip the workforce with core portable skills such as team work, problem solving, information computer technology skills etc.
Individuals
- Employees need to embrace lifelong learning. This involves an attitudinal shift.
35“Future Talent in a Global Context – The Implications for Higher Education”.
May 24 2008Manpower
• Developing world will continue to claim its stake in the global economy.
– will be good for world GDP growth– will effect an inflation reduction on manufactured products
– more consumers coming on-stream
– increased demand for finite resources– upward pressure on energy, raw materials, foodstuff prices
Seven assertions – 1.
36“Future Talent in a Global Context – The Implications for Higher Education”.
May 24 2008Manpower
Seven assertions – 2.
• Pressures for labour market reform in Europe will continue to build up.– Its labour markets underperform compared to the US and Asia
– It loses global market share and forfeits economic growth opportunity
– The notion of security will build more on availability of jobs and access to new opportunities
– the longer and deeper Europe goes in the wrong direction, the more painful the reform is going to be
– the risk is real if the current positive trends are interpreted that no reforms are needed
37“Future Talent in a Global Context – The Implications for Higher Education”.
May 24 2008Manpower
Seven assertions – 3.
• The location of jobs that can be moved is continuously challenged.
– the mobile job market will continue to grow
– technology will continuously increase the offshoring potential of jobs
– developing countries continue to move to higher value services– huge need to overhaul skill systems
– the most important factor for location will be availability of skills– EU/US will become recipients of offshoring (if they have the right skills)
38“Future Talent in a Global Context – The Implications for Higher Education”.
May 24 2008Manpower
Seven assertions – 4.
• The jobs that cannot be moved will be subjected to three forces:– demographics and indigenously available labour to fill jobs
– upward cost pressure due to scarcity of labour supply
– application of technological developments – changing the nature of the job and the skill requirement for it
– immigration will mitigate upward cost pressures in labour markets
39“Future Talent in a Global Context – The Implications for Higher Education”.
May 24 2008Manpower
Seven assertions – 5.
• The practice of global work organizations will increase and change.– technological advances will break down barriers for tacit
interaction
– a more technology savvy new generation with greater tolerance for ICT shortcomings
– the way we look at team and people management will change– broader geographical boundaries of tacit interaction
– greater workforce diversity
40“Future Talent in a Global Context – The Implications for Higher Education”.
May 24 2008Manpower
Seven assertions – 6.
• Demography will force a rethinking of policies and regulations.– to ensure labour supply government policies will:
– encourage immigration– the rethinking process will start from addressing illegal immigration
– encourage longer working lives
– facilitate reconciling of private and professional lives
– governments will manage budgets– entitlements will be reduced
– companies will rethink talent strategies– older workers’ retention and recruitment strategies
– global mechanisms to access talent– talent retention – internal flexibility for multiple skills specific to one company
– access to talent – external flexibility for specific skills for multiple enterprises
41“Future Talent in a Global Context – The Implications for Higher Education”.
May 24 2008Manpower
Seven assertions – 7.
Skill development systems need to respond to changing workforce demographics and the challenges of skill development, re-skilling and up-skilling.
42“Future Talent in a Global Context – The Implications for Higher Education”.
May 24 2008Manpower
WHAT WILL YOU DO?www.manpower.com