Welcome to the 2018 edition of the Hays Global Skills Index (the ‘Index’), a comprehensive overview of the professional global labour market. Based on research and analysis of skilled labour markets across 33 global economies, every year we produce a report that explains the key trends and challenges facing organisations as they search for the most sought-after talent.

Whether it’s the threat of Artificial Intelligence (AI) and machine learning taking the place of workers, or major developments in how consumer data is being managed and monetised, this has been a year of technological upheaval. Within this environment, we understand the importance of continually tracking and examining labour markets and questioning whether the global workforce possesses the skills needed to thrive in this ever-changing environment, both now and in the future. It is also important that we consider the role employers should play in making sure their employees have the right level of support and training.

The Index provides this perspective. As the world’s largest specialist recruiter, Hays places over 300,000 people into new roles every single year, across 33 markets and over 20 professional disciplines. This reach provides us with a unique insight into the opportunities and challenges on the horizon for skilled workers around the world.

While last year’s Index painted a more positive picture than in recent years, this year’s edition reveals that there are clouds on the horizon. Global economic growth is expected to gather momentum over the next twelve months, but this trend is not being matched with improvements in productivity or wage growth.

There are two key factors at play here, both of which need to be tackled urgently. The first is the growing talent mismatch between the skills workers possess and those desired by employers. The scale of this issue is demonstrated by the fact that almost half of the countries included in the Index this year showed a rise in the rate of unfulfilled vacancies – a key indicator of talent mismatches.

Clearly if employers can’t find workers with the relevant experience and skills for available roles, that’s a serious problem, and will only be exacerbated going forward by the transformational technology advancements that we’ve seen over the past few years.

We live in a world where robots can run and jump; cars are driven by computers and drones are replacing delivery workers. These are but a few examples of how the jobs of tomorrow will be very different to those of today. If workers young and old aren’t prepared to take advantage of these new opportunities, and to adapt to developments as they occur, this talent mismatch is only going to increase.

The second factor revealed in the Index – and one that has continued to trouble economists for the best part of a decade – is the ‘global productivity puzzle’. Labour productivity levels across the globe, particularly in Europe, the Middle East and the Americas, have essentially flatlined since the global financial crisis.

The puzzle seems so hard to solve because the root causes are hard to determine. Following the crisis, there was an inevitable shift in corporate investment, with businesses adopting more risk-averse strategies that included a preference for hiring more staff rather than acquiring new technologies or building key infrastructure – the types of things that can really drive productivity forward.

It has been suggested that the stagnation in productivity may be a longer-term trend; the result of macroeconomic forces such as an ageing population, a downturn in global trade, and reduced investment in education and training.

By providing a snapshot of conditions in 33 markets, the Index helps us to look at the real-world consequences of these trends. It is only when we assess the impact these powerful forces are having on labour markets at both a global and a local level that we are able to develop robust and effective response strategies.

However, there are also broader societal priorities that businesses and governments need to focus on; one of these is undoubtedly the gender pay gap. In all markets covered in the report, women are less likely to participate in the labour market than men, and when they do, they are less likely to find employment. In other cases there is an issue with women re-entering the workforce from maternity leave. Mothers returning to work should be facilitated with new skills that employers are looking for, to improve their employability and alleviate skills shortages. Policymakers and businesses must work together to remove these social barriers and to do more to close the pay gap when women do join the workforce. This can be done through the elimination of discriminatory hiring practices; encouraging flexible working; and introducing shared paid parental leave.

At Hays, we regularly receive feedback from both companies and candidates on their concerns and expectations. Based on these real-world perspectives, as with previous years, we have developed a set of recommendations for policymakers, businesses and other stakeholders as they seek to drive economic growth.

1) Ensure workers are prepared for technological disruption by fundamentally reviewing existing training and education programmes

With technology creating new opportunities and business increasingly looking to a future where robots and machines carry out manual tasks, governments and companies need to take a step back and consider whether current education systems and training regimes fit the bill. The world of work continues to evolve alongside technology and we need to ensure education and training do too. This is essential if we want to tackle the talent mismatch we see across the globe and be prepared for a very different future.

2) Take advantage of relatively low interest rates and stable economic conditions to increase investment in new technologies and infrastructure

While it’s easy to put off big-ticket investment decisions due to concerns about the economy, it has never been more important that companies look ahead and consider whether investing now will place them in a better position for the future. The only way to snap out of the current productivity malaise is to make the most of new technologies, innovation and new systems, to increase productivity by automating tasks or identifying opportunities through harnessing data.

3) Embrace diversity in all its forms, not just because it’s the right thing to do, but because it makes business sense too

The Index highlights the work we still have to do to ensure there are sufficient opportunities for women to enter the workforce and to continue to progress when in employment. Businesses that make this a priority will not only have more satisfied and loyal employees, they will also have a more effective workforce, with a diverse range of voices and perspectives united behind their objectives.

These recommendations alone will not solve the issues facing labour markets, but there is an urgent need to place a spotlight on these issues and look to work together to tackle them. We must act fast to ensure we are prepared for the ever-changing world that lies ahead: we are at a critical junction and we are in danger of a spiralling skills crisis.

I hope that the Hays Global Skills Index 2018 provides not only a unique and useful perspective on the worldwide labour market, but also ideas for businesses and policymakers alike to consider going forward.

Alistair Cox, Chief Executive, Hays plc