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Fault Lines – A New Report From Lightcast
A new report from the labour market analytics company, Lightcast, an iED member, explores the forces reshaping the global workforce and redefining the balance between labour supply and demand. Amidst the pressures facing organisations across the globe, the report identifies three deep, structural problems: Geopolitics – causing a displacement of talent; Artificial Intelligence (AI) – causing a disruption of talent; and Labour Shortages – causing a deficit of talent.
Fault Lines warns that most existing talent strategies are not designed to cope with the scale of change these forces are creating. Employers, education providers and policymakers risk preparing for a world that is already disappearing, unless they understand how these “fault lines” interact with one another.
Beginning with geopolitics, Fault Lines highlights how nations are seeking to reduce dependency on others and strengthen domestic resilience. The report identifies a growing divide between “Advanced Knowledge Economies” in wealthier developed nations and “Industrial Scale Economies” in developing regions, with neither group holding a clear advantage over the other.
China and India, for example, now educate more undergraduate students than the rest of the world combined. Yet many Western countries are restricting international student flows for political and national security reasons. International undergraduate enrolment in the United States for instance peaked in 2017 and has since declined by more than 100,000 students.
The report also highlights the issue of slowing migration, with projections showing a decline of 20% over 20 years in North America, Europe, and Oceania. This is being driven by two main factors: origin countries have fewer people to send, and destination countries are tending to enforce tighter immigration policies. The result is a shrinking talent pool being squeezed by both geopolitical pressures and rising labour shortages.
Next comes AI, which is proving to be a huge disruptor, though one that is impacting some parts of the workforce far more than others. At one end of the spectrum, the sectors that are facing the greatest workforce gaps – such as healthcare and hospitality – have been among the slowest to adopt AI. At the other end, industries like IT and marketing, where skill requirements were already changing rapidly, are adopting it at pace. Over 70% of the skills needed for many kinds of editing and administrative roles are skills that AI could replace.
AI is also reshaping the relationship between qualifications and careers. Only 6% of AI workers hold AI degrees, whilst many of the most in-demand skills in AI job postings are human capabilities such as leadership and communication.
Finally, the report points to labour shortages as a growing constraint on economic growth. The world population is ageing, with declining fertility rates and increased life expectancies combining to create a perfect storm. Add in the declining immigration rates mentioned earlier, and it becomes clear that talent pipelines are not only being squeezed – they are also not being replaced.
Whilst there are no short-term solutions for this, there are ways the problem can be mitigated by employers in their hiring strategies. However, the report also finds that degree requirements remain misaligned with workforce reality, with 66% of global job postings requiring a university degree, yet only 31% of workers holding one. Combined with ageing populations and falling birth rates, this creates a structural shortage that cannot be solved through traditional hiring strategies alone.
Fault Lines concludes by noting that in order to tackle these huge labour market issues, organisations are going to need comprehensive labour market insights that can anticipate change proactively, rather than reactively. The organisations that see the most success will be the ones that stop waiting for the labour market to return to the old normal and instead recognise that we’re facing unprecedented change.
Red the full report here – https://bit.ly/iEDblog4
Lightcast is a member of the iED and delivers our CPD on skills/development.
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