User Guide: Global Talent 2021

Transcription

1 User Guide: Global Talent 2021

2 Contents Introduction... 1 Modeling the demand for and supply of talent: Our Methodology... 1 Skills gaps and talent supply... 2 Determining the Trend Talent Balance... 3 Categorization of industries and occupations... 3 Country Dashboards... 4 How to use the Country Dashboards... 4 Talent Databank... 5 Glossary of terms used in this study... 6

3 Introduction Over the next decade, major structural shifts will dramatically transform the global market for talent. Significant changes in the patterns of macroeconomic growth, demographics, and the uses of technology will fundamentally alter the growth trajectories for both the supply and demand for skilled workers, with important consequences for Human Resource managers and corporate decision makers. As many emerging economies improve access to high school and college education, the world economy overall will benefit significantly from the entry of a large number of newly-trained workers. This welcome influx of skilled labor will arise, however, just as firms in the developed economies will find it increasingly difficult to find suitably skilled workers, intensifying the global war for talent. The data in our Global Talent 2021 study projects how these trends will affect the supply and demand for talent in the next decade, and should prove useful to HR managers and corporate leaders as they create their global investment strategies. Modeling the demand for and supply of talent: Our Methodology The flowchart below illustrates the economic modeling structure and analysis used to forecast the supply of and demand for talent in each of the countries covered. Oxford Economics suite of economic and sector models Employment forecasts by SIC Demand analysis and forecasting (Construction of SIC/SOC tables, analysis of trends) Employment forecasts by SOC job categories and SIC industries Demand supply linkages Labor supply forecasts Supply and forecasting (Analysis of trends in education and demographics) Labor supply forecasts, education and demographics Outcomes benchmarked against OE models and other industry/ productivity datasets, e.g., KLEMS, Conference Board, OECD STAN Analysis of the trend talent balance: technical skills (Demand and supply analysis brought together shows the trend talent balance, analyzed by SOC job categories and SIC industries) Benchmarking survey findings with outcomes from demand and supply models Model outputs, analyzed by SOC job category and SIC industry Talent skills survey (Survey data on enabling skills for survey-defined job categories) Analysis of the trend talent balance: enabling skills (Integrating survey findings with model results, analysis of the trend talent balance for enabling skills in survey-defined job categories) 1

4 Skills gaps and talent supply This study builds upon our suite of economic models and is augmented with additional analysis undertaken specifically for this project. Our modeling strategy allows us to build a talent demand forecast that takes into account the following three types of drivers: 1. Impact of economic growth and productivity (macroeconomic drivers). The demand for talent in 2021 will depend in large part on the rate of economic growth in the country where they are located. Many factors determine economic growth in specific countries, including government monetary and fiscal policies, national savings and investment rates, and current account sustainability (trade balance). We used our macroeconomic models to provide benchmark forecasts for economic growth over the next decade as the basis for our talent demand projections. 2. Impact of changes in the relative size of specific industries (demand shifts between industries). In addition to the impact of overall economic growth, the demand for talent in 2021 will also depend, in part, on shifts in industry structure over the next decade. Our models for specific industry sectors provide a tool for analyzing industry drivers that will affect the future demand for talent. These models can account for changes that will alter the mix between manufacturing and service sector outputs, for instance. This study includes estimates of how changes in industry structure within a country could affect the demand for different types of talent. 3. Impact of changes in the skills needs of specific occupations within industries (demand shifts within an industry). This analysis examines the demand for talent in occupational groups within industries, today and in the future. To do this, we studied the occupational mix used by specific industries, drawing on data from national census and labor force surveys (LFS) and examined trends to forecast projected changes in occupational mix in For example, businesses have increasingly adopted digital technologies over the past decade and have consequently faced growing demand for employees who either have professional skills in information technology (IT) or are IT literate. LFS and census data allow us to monitor the increased use of IT professionals in different industries, while skills surveys such as the UK s national skills survey provide evidence of IT literacy by occupation and industry. The supply side of the research builds upon demographic forecasts provided by the International Labor Organization (ILO) and the United Nations, which provides projections of changes in the size of the working age population and migration rates. Overlaying these data are projections for the expected rate of improvement in educational attainment and a detailed modeling of labor force participation rates by different talent groups. Population growth notwithstanding, the most important factor determining the growth of the highskilled talent pool is the rate of improvement in access to and quality of high school and college education. For example, some emerging economies, such as China, have invested heavily in improving access to higher education. In wealthier, OECD countries, educational standards are generally improving, with increasing emphasis on IT skills. 2

5 Determining the Trend Talent Balance To determine the projected balance of talent within countries, we calculated the growth rate of talent supply less the growth rate in talent demand. Where the growth in the talent supply exceeds the growth in demand, the resulting positive skill gap represents a talent surplus. A negative number, by contrast, represents a talent deficit. In the Country Dashboards, surpluses and deficits are reported in terms of the annual average growth rate for the period from 2011 to This is the metric used in the global talent heat map, together with the chart illustrating the overall trend talent balance and talent rankings shown on the first and second pages of the Country Dashboards. The first page of each Country Dashboard depicts the trend talent balance for those with a college education or equivalent. The second page illustrates the trend talent balance for those with a high school education or equivalent. The trend talent balance for college-educated workers focuses on three categories of workers executives, professionals, and technical workers. The trend talent balance for high school-educated workers refers to all occupations. Thus, according to our rankings, India, Indonesia, Colombia, South Africa, and Brazil are projected to have the largest talent surpluses in 2021, with the most improved opportunities to find adequately educated staff, while Taiwan, Japan, Poland, Italy, and Chile are expected to confront the steepest talent deficits. Categorization of industries and occupations Our economic models provide detailed forecasts for specific countries and industries. For this study, we have determined what these country and industry forecasts imply for the demand and supply of talent in particular occupations. To do this, we constructed a detailed description of the occupational structure of the workforce by industry for each country. Building these occupation-industry tables required us to analyze data collected by national census and/or annual labor force surveys (LFS). Labor force data are recorded using a number of classification schemes. The two most important describe: 1. The type of activity of the establishment in which people are employed (called industry even if the activity described is a service). 2. The type of work performed (called occupation but specific vocations and jobs are identified with greater detail). The economies of the 46 countries were analyzed in nine occupational groups: Executives and managers Skilled agriculture Professionals Craft workers Technical workers Plant operators Administrators Unskilled Customer service These occupational groups correspond to the major occupational groups identified under the International Standard Classification of Occupations (ISCO-88), which are available here: Although data for skilled agriculture and unskilled workers were included in the models, supply and demand for those occupational groups is not reported in the Country Dashboards or Databank. 3

6 The models analyzed the industrial structure of the following business sectors: Agriculture Mining Manufacturing Power generation Water Construction Wholesale and retail trade Transportation services Hotels and catering Information, communications, and technology (ICT) services Financial services Real estate Professional services Business process outsourcing services (BPOS) Public administration Education Healthcare Entertainment and arts Other services These sectors correspond to the major industry groups identified under the International Standard Industrial Classification (ISIC Revision 4). The definitions are available here: Though projected changes in the agricultural sector were included in building these economic models, supply and demand for agricultural labor is not reported in the Country Dashboards or Databank. Country Dashboards For each of the 46 countries analyzed, we have created an individual talent Dashboard, which can be used by HR managers and other executives to better understand the cross-cutting trends of supply and demand that will affect the trend talent balance in individual countries. These Dashboards help users quickly understand where a country ranks in terms of its supply of available talent, and where talent will be in surplus or shortfall by individual industry sector. HR executives can use these charts to assess the relative supply of talent, by industry, in the markets where they currently operate or may expand in the future. The data can also guide talent recruiters and HR managers to markets where they are more likely to find the talent they need in specific industries or occupations, based on the measures of relative surplus or deficit. The first page for each Country describes the balance of talent for college-educated workers; the second page, the shows the trend talent balance for those with a high school education. How to use the Country Dashboards The following explains each section of the Dashboard: Overall Talent Balance illustrates the projected percentage growth of both supply and demand of talent in the individual country between 2011 and 2021, and the overall net balance. A positive number indicates a surplus of talent; a negative number a talent deficit. Global and Regional Talent Rankings shows where a country stands relative to other nations in its region and globally in terms of its trend talent balance. Each nation s ranking is broken out to show relative balances for executive, professional, and technical talent. Talent Balance by Industry and Occupation illustrates the percentage growth in specific occupational categories projected for the period from 2011 to Positive numbers indicate a 4

7 projected surplus in the supply of talent in the specified occupational group; negative numbers indicates an expected shortfall in talent supply. Workforce Profile depicts the percentage of the total workforce expected to be employed in various occupational groups in Talent Demand by Occupation shows the actual numbers of workers employed in specific occupational groupings today, and the absolute growth expected in those occupations from 2011 to Each country Dashboard page also delineates the factors that lead to changes in the supply and demand for talent in the individual country. The Overall Talent Balance shows how the talent supply in a country is affected by changes in the number of students graduating from universities and by changes in the demographic cohort; countries with relatively young populations will tend to have an increasing pool of students attending universities and technical colleges, while countries with aging populations will experience a relative decline. The figure is also affected by the net migration of workers (the difference between in- and out-migration of workers) and by inactivity drag (the number of people who are willing and able but who cannot find work). Talent demand in each country is calculated based on the projected overall economic growth of the country, as well as by the expected movement of workers between sectors (for example, from manufacturing to service-related employment or from manufacturing to computer services industry employment). It is also affected by how the skills-mix required within each sector changes over time. Talent Databank The Global Talent Databank allows users to define, create and chart occupational supply and demand data, by country, for any period of time up to Drop-down menus allow users to determine which occupations, industries, or even macroeconomic values they would like to investigate, and can offer projected talent balances by year and by occupational category. The material can be downloaded as either a chart or a table. The Talent Databank includes macro- and socio-economic data and forecasts compiled from Oxford s Global Economic Databank. This includes the components of domestic demand and GDP, wages and employment, trade balances, labor force and population growth, estimates of working age population, urban and rural population figures. HR managers will find this data especially helpful as they prepare strategic plans, create reports to support their HR efforts, or explain HR trends to key members of their management operation. The databank is available to subscribers at: put web address here Subscribers to the talent databank will have access to regular information updates, so users can monitor changes in particular countries as economic or employment patterns change over time. Longer-term talent variables (such as those relating to skills preferences and human resources approaches) are updated on an annual basis. Shorter-term macro- and socio-economic indicators are updated monthly. 5

8 Glossary of terms used in this study Term Agile Thinking Skills Capabilities Competencies Digital Skills Diverse Employee Populations Emerging Markets Engagement Global Operating Skills High-potential Employees HR Scorecard Human Capital Data Inactivity Drag Industrialized Markets or Nations Integration and Synergy Interpersonal and Communication Skills Definition Agile thinking refers to the types of capabilities employees will need in an increasingly complicated and fast-paced business environment. These include the ability to deal with complexity and ambiguity, manage paradoxes and balance opposing views, consider and prepare for multiple scenarios, innovate, and see the big picture. The knowledge, skills, and attitudes of a group, or cultural measures of an organization. The measurable knowledge, skills, and observed behaviors of individuals that are required for effective performance; often organized by increasing levels of knowledge, responsibility, or mastery. Can be used to design training programs and develop performance standards. Digital skills refer to the capabilities employees outside the IT department will need to operate in a digitized business environment. These include digital design skills, use of corporate IT software and systems, application of social media and Web 2.0, ability to work virtually, and digital business skills. Employees who are from different cultures or geographies. The ability to manage diverse employees is a key global operating skill. Rapidly growing, industrializing countries are emerging market countries. For the purposes of this study, Argentina, Bahrain, Barbados, Bermuda, Brazil, Chile, China, Egypt, India, Malaysia, Mexico, Oman, Qatar, Russia, Singapore, South Africa, Thailand, and the UAE are classified as emerging markets. A measure of discretionary effort an employee is willing to exhibit; typically measured in an associate s commitment to and enthusiasm about the organization. Global operating skills refer to the capabilities employees will need to succeed in an international and multicultural business environment. These include understanding international markets, cultural sensitivity, ability to manage diverse employees, foreign language skills, and the ability to work in multiple overseas locations. High-performing employees who also show a strong capacity to grow and succeed throughout their career more quickly and effectively than their peers. Defined metrics and goals for a few critical measures of key HR objectives with a clearly defined link to business objectives. Human Resource Information Systems (HRIS) data and other information and metrics about the employees in an organization. A percentage reflecting the number of willing and able workers who cannot find employment. For the purposes of this study, Australia, Austria, Canada, France, Germany, Japan, Netherlands, Sweden, Switzerland, UK, and US are classified as industrialized markets. Integration and synergy means understanding how different HR solutions mesh with each other and with other organizational processes to deliver a unique and distinctly compelling proposition to the organization and the workforce. It is about ensuring that decisions work together in concert and reinforce each other. Interpersonal and communication skills refer to the capabilities employees will need to communicate across teams. These include oral and written communication, collaboration, co-creativity and brainstorming, teaming (including virtual teaming), and relationship building (with customers, partners, government). 6

9 Term Leadership Development Logic-Driven Analytics Net Migration Performance Management Pivotal Roles Risk Leverage Talent Acquisition/ Recruiting Talent Demand Talent Management Talent Optimization Talent Pipeline Talent Pool Talent Segmentation Talent Supply Technical Skills Definition Programs designed to increase the effectiveness of leaders in the organization by instilling them with the skills and capabilities necessary to lead others, as well as the self-reflection to understand their leading style. Logic-driven analytics are the application of data, tools, methods, and logic to understand and enhance decisions about global shifts in the supply and demand for talent. The analytical methods that will be the most widespread to understand future talent supply and demand include HR scorecards, workforce planning tools, marketing frameworks, scenario analysis, and finance frameworks. The sum of workers entering into and leaving the workforce in a country. The difference between immigration into and emigration during a time period (net migration is therefore negative when the number of emigrants exceeds the number of immigrants). The programs and processes managers use to evaluate, guide, and improve performance, including performance form content, alignment with business cycle, goal-setting cycle and process, high potential/high performer identification, and manager effectiveness. The roles that contribute most directly to an organization s ability to achieve and maintain a competitive advantage in the marketplace; often these roles require specialized skills or knowledge and affect long-term business value. These are roles where the difference between good-great and moderate-good performance significantly affects business success. Risk leverage means approaching uncertainty in human capital as both an opportunity and a risk, and seeing beyond simple risk reduction. Risk leverage transforms the traditional mind-set that risk is bad. Taking the right risks is often as vital as avoiding the wrong ones. The programs and processes used to attract, select and train associates, both internally and externally. The demand for workers by employers. Talent demand is driven by economic growth, and shifting talent requirements both within and between industries. The programs and processes used to identify leadership and workforce needs, engage and develop leaders, managers and associates, and align behaviors with the critical drivers of business performance. Talent optimization means investing more heavily in talent and human capital areas where the return is greater, and investing less in areas where the return is lower. Optimization follows on from segmentation and builds on the differences between employee groups to enable the organization to realize optimal value. Refers to the employees or talent who are ready for or in the process of developing into certain roles or positions within the organization. A group of employees who possess the skills and capabilities required to fill a variety of roles, as needed, based on business need and role availability. Talent segmentation involves identifying the strategic categories of employees and potential employees by discerning the most vital differences between them. Such strategic categories are based on what the organization needs from employees and potential employees (demand side) or what the organization can offer to attract or motivate them (supply side). The supply of workers. The supply of talent is driven by demographic change and educational improvements, adjusted for net migration of workers and inactivity drag. The knowledge and abilities required to accomplish a specific, function-based task, such as, systems architecture. 7

10 Term Top Performing Employees Workforce Analytics Definition Employees whose performance is in the top 10% of the workforce. A systematic approach that uses business and talent data to understand the current state of the workforce, help anticipate future talent needs, and facilitate optimal talent investments that deliver the right number of employees with the right skills at the right time and cost. 8