Economies in a period of rapid technological change will naturally be hungry for people with the necessary new skills to help build and maintain a competitive advantage.
In this survey, speed of innovation is identified as a leading cause of complexity in Brazil, Mexico, China and India, so it’s not unreasonable that these countries should also identify the need for new skills as a top priority.
If we compare emerging with mature economies, the need for new skills is identified as a major challenge by 81 percent and 76 percent respectively. It is interesting that the gap between the two is not wider.
In Japan, for example, the need for new skills is rated as the top challenge of complexity, chosen by 90 percent of respondents, alongside increased costs. In Europe and North America the figures are between 70 percent and 80 percent.
Part of this may be simply due to the pace of technological change in these countries, but for further insight it is helpful to look at some of the work on demographic change that is being done by Bernard Salt, a KPMG partner in Australia who has specialized in analyzing the global impact on business of changes in population.
His work on population trends in large economies has identified a widespread decline in the rate of growth in numbers of active working age people (defined as 15–64 years of age) in these countries. Aging populations and declining birth rates have meant that, taking Japan once again as an example, the number of Japanese working age people began to fall in 1994 and has fallen every year since then.
In France, the rate of growth has declined substantially from the peaks of the 1970s and 1980s, and is expected to tip into a net reduction in the working age population by 2012. China is expected to reach the same point in 2016.
India does not have the same problem. Its relatively young population is expected to provide growth in the number of working age people for decades to come. But in the UK and the US, declines in the growth of the indigenous population have been overcome only by large-scale immigration; in the UK, migrants have come largely from former colonies and from the EU, and in the US they have come from Latin America.
For businesses faced with a labor force where the average age is steadily rising, there may be a desire to bring in new people with fresh skills and different ideas. If these people are not available in the domestic workforce, then this is clearly going to be easier to do in countries where there is a tradition of immigration to fall back on, as in the US and the UK.
As to where these people might come from, India would seem to be a good place to look. UN statistics suggest that over the past four years, around 14 million working age people a year have been added to the Indian workforce.
These changing demographics present a number of challenges for human resources. Businesses will have to adopt new approaches to recruitment and start to look outside their traditional marketplaces for resources. A more proactive and flexible approach to workforce planning may be required. The development of new skill sets among existing workforces will also become more important. Finally, for many countries it appears that the war for talent is imminent, which means attracting and retaining resources will become a business priority.
Rachel Campbell, Global Head of People, Performance and Culture, KPMG International