Lilit Martirosyan
02 Dec 2014
Businesses in the world’s three biggest economies, the United States, China and Japan, are increasingly feeling the heat when it comes to recruiting skilled staff according to the Grant Thornton International Business Report (IBR), a survey of 2,500 business leaders in 35 economies. Given that these countries together represent over a third of global output, a deficit of skilled staff could have a significant knock-on effect on economic growth not just in these economies but beyond.
The IBR surveyed businesses worldwide on the impact of skilled worker shortages on growth. Since 2012, the global average has risen by three percentage points, with 31% reporting it as a problem. However, the increases in the US (up 9 points to 25%), China (up 5 points to 35%), and Japan (up 12 points to 52%) have been more significant. This issue has grown as these markets look to expand their workforce, with 41% of US businesses aiming to hire in the next year, followed by Japan (34%) and China (30%).
Francesca Lagerberg, global leader for people and culture at Grant Thornton, commented:
"It is always a concern when businesses are struggling to plug talent gaps in their organisation. Unemployment is relatively low in both China and Japan, where the populations are ageing rapidly, and the US has been adding jobs at a very healthy rate over recent quarters so businesses have little room for manoeuvre. Because of the collective trading power of these three economies the repercussions of slower business growth will be felt the world over.
"However, on the positive side it is encouraging that businesses are looking to take on new people. Improvements in jobs tend to lag recoveries as companies 'run lean' and wait to see sustainable increases in demand before adding people on permanent contracts. The increase in employment expectations uncovered by the IBR therefore suggests that businesses are more confident in the economic outlook. And of course jobs create demand so the hope is that the global economy is entering a virtuous cycle."
In the US, China and Japan, the proportion of businesses looking to hire new workers is now at its highest since before the global financial crisis according to the IBR. The proportion of businesses citing a lacking of skilled workers has now also reached or surpassed 2008 levels in all three economies.
Francesca Lagerberg added: "As the battle for talent intensifies, business leaders need to ensure they have the right recruitment and retention policies in place. Pay and incentive structures are potent tools, but if a business cannot find the right people externally, then upskilling the current workforce also becomes a priority. Businesses need to invest in their internal training programmes to mould the people that will help them deliver on strategy, innovate and ultimately grow.
"We also need to improve the dialogue between educational institutions, governments and business leaders. Unemployment statistics often hide the thousands of people who have given up looking for work and dropped out of the labour market. The issue isn’t really a shortage of people: it’s a shortage of people with the skills businesses need."
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