Welcome to the 2019/20 edition of the Hays Global Skills Index (the ‘Index’), our comprehensive guide to the trends currently facing the global labour market. Based on research into professional employment markets across 34 major economies, we produce an annual report which examines the macro trends, challenges and opportunities facing the world’s workers and employers.
This year has been another significant year of change, from the tensions rising over trade relations between the US and China to the uncertainty around Britain leaving the European Union; the increasing levels of scrutiny against ’Big Tech’ and the ensuing debate surrounding privacy and content.
Many would argue that fear of the unknown plays a large part in determining future growth prospects, and this year saw the IMF forecast a slowdown in global real GDP growth. What this year has explicitly shown is that uncertainty is on the rise for both companies and their workers, emphasising the value in tracking and examining labour market trends in order to help anticipate and navigate these unfamiliar waters.
The Index provides a unique perspective on the challenges and opportunities facing workers and their employers, particularly against an increasingly uncertain backdrop. As the world’s largest specialist recruiter, Hays places over 300,000 people into new roles every single year, across 34 markets and over 20 professional disciplines.
While this year’s Index indicates that issues flagged in previous years – such as ‘talent mismatch’ – continue to be a problem, it also reveals several new factors impacting the world of work. What has stayed consistent throughout the years are some of the underlying trends pulling the strings on these issues that are impacting professional lives, from educational choices through to day-to-day tasks. Explicitly, one of the major trends continues to be the exponential growth of AI and machine learning, and its overarching impact on many of the issues described within this report.
“The Index provides a unique perspective on the challenges and opportunities facing workers and their employers, particularly against an increasingly uncertain backdrop.”
Although the Index’s average score remains unchanged from last year at 5.4, there is a much wider story to tell among the 34 labour markets featured within the report. This year’s Index examines two pressures facing numerous workforces worldwide; firstly, that talent mismatch is becoming worse in a number of markets, and secondly, that there is now a global threat of wage stagnation. These issues can be partially explained by the rapid growth of technology, but also through other trends, such as the rise of outsourcing, globalisation and uncompetitive labour markets.
Our research has again showcased the growing issue of talent mismatch, as the Indicator has risen since last year as employers struggle to find suitably skilled workers to fill the required vacancies. The problem continues to be exacerbated by the speed of technology development, with the most sought-after skills seemingly more difficult to come by, creating a real global skills dilemma and causing those unemployed to lose confidence, in turn pushing up underemployment and reducing wage pressure, as well as output.
Global unemployment continues to stay at a multi-year low, but what continues to puzzle economists is why traditional mechanisms aren’t coming into play. Wage stagnation is a global phenomenon. Research has revealed multiple theories are making an impact, which could be causing traditional economic mechanisms to be obsolete. However, none appear to satisfactorily explain the current paradox.
Another issue of ongoing debate is the gender pay gap. However, one aspect of this that hasn’t been considered in detail is the implications male- versus female-dominated careers have on gender pay. In fact, there is a very real concern around technology taking over roles largely dominated by women, as a number of studies show that female- dominated careers are more susceptible to automation and globalisation. These are just a few of the issues impacting the world of work which are explored further within this report.
“Global unemployment continues to stay at a multi-year low, but what continues to puzzle economists is why traditional mechanisms aren’t coming into play. Wage stagnation is a global phenomenon.”
Our position as a global leader in recruitment means that Hays regularly receives requests for feedback from both institutions and governments. As with previous years, we have developed a list of recommendations for policymakers and business leaders to consider as part of their wider drives to solve the world’s employment challenges.
1. Invest in education, life-long learning and reskilling programmes as a priority for governments and businesses
Developing skillsets for workers that are less vulnerable to the forces of outsourcing, automation and globalisation should help ease some of the overall downward pressure on wages. The boost in human capital from training will also increase productivity which should in turn stimulate wage growth. There is also a real opportunity for businesses to work with educational institutes to ensure the skills of tomorrow are being taught and people are suitably ready for the world of work.
2. Employers should actively motivate employees to take advantage of flexible working and geographically distant opportunities
Organisations should embrace flexible working practices to encourage more people to participate in the workforce. In addition, technology in the workplace has increasingly led to more flexible working, providing workers with more geographically distant opportunities. These polices also support employers to enlarge their pool of candidates and improve the matching of talented individuals and vacancies.
3. Companies should embrace diversity in the workforce in all its forms
Resolving the division within gender-dominated occupations will not only help reduce the gender pay gap but will also help increase the talent pool on offer for employers. Organisations should offer return to work schemes for mothers who have left employment, helping to encourage participation in the workforce. As part of this, governments and businesses alike should ramp up programmes that encourage women to seek careers in traditionally male-dominated sectors, such as technology.
These are but a handful of potential remedies that will contribute to resolving the issues facing today’s labour markets and could help to resist any further exacerbation. However, these recommendations alone won’t solve our problems. We need to work collaboratively, across business and government, to ensure we’re prepared for the challenges that lie ahead.
I hope that this year’s Index provides not only some valuable insight into the issues facing workers across the globe, but also some considerations for potential remedies that institutions and policymakers alike can take forward into the future.
Alistair Cox, Chief Executive, Hays plc