Skilled Migrants Help to Ease Global Labour Pressures as China Sees Strength in Local Labour Employment

Published on 2017-10-11

Global labour market pressures have eased slightly compared to last year
There are more migrants than ever before and they are increasingly well-educated
Workers are also adopting more innovative working patterns thanks to technological development

A modestly improved global economy has seen labour market pressures ease slightly since 2016, as growing numbers of well-educated migrants provide a flow of skilled labour across countries. However, despite the slight easing in pressure, skill shortages remain as businesses continue to struggle to find skilled professionals in a number of specialist roles and sectors. 

Hays-GSI-Report-2017-cover.jpgThese are the key findings of the sixth edition of the Hays Global Skills Index, a report published on 10 October by recruiting experts Hays in collaboration with Oxford Economics. The report, ‘Regional dynamics of the global labour market: skills in demand and tomorrow’s workforce’ is based on an analysis of professional employment markets across 33 global economies, assessing the dynamics at play in each local labour market.

The flow of skilled migrants has contributed to a slight decrease in the average overall Index for this year. The score has dropped marginally from 5.4 to 5.3 this year – the first time there has been a reduction in the Overall Index score year-on-year since its conception in 2012.

UN data estimates that 244 million people, or 3.3% of the world’s population, are currently living in a country other than that of their birth. Index data has also showed that in the European Union in 2016, the proportion of all people born in another country who were university educated was 29% – up 3 percentage points from 2011.

This flow of workers appears to be counterbalancing the issue many countries face of an ageing population. Excluding India, the working age population across all countries in the Index* is set to decline by nearly one million people in 2017 as populations’ age. However, because of rising participation rates in 25 of the countries in the Index and the number of migrants being higher and more skilled than ever before, the supply of workers will actually increase by 1.1 million.

In China, the release of the report is widely anticipated by business leaders each year as it throws the spotlight on the skills landscape and the issues that face the world of work. Since the release of the report in 2012, China’s score has decreased year on year from 5.5 (except 2013 & 2014 where it remained the same) to its current 4.0. China’s current score is also the lowest in the Asia region with Japan (5.7) highest.

Contributing to China’s score decreasing from last year is rising participation rates and that employers are now finding it easier to find workers with the right skills.

As Simon Lance, Managing Director of Hays Greater China commented, “the score decrease in ‘labour market participation’ and ‘talent mismatch’ is indicative of an improved ability for the local labour market to meet the demands of employers. China is uniquely positioned at the moment in that it’s able to take advantage of the regional and global opportunities available to it. Operating in a dynamic global marketplace and with a rapidly shifting economic and political landscape, organisations have been keen to localise their workforces when it comes to filling technical and management positions and are benefiting across the board.”

Looking again at the report from a global perspective, the proliferation of connectivity and new technology has led to more and more workers adopting flexible working patterns. In the US, over the last decade, the number of freelance, contract, temporary or on-call jobs has risen 5 percentage points to account for 15% of all workers. In Europe, freelance roles have grown four times faster than total employment in the last five years. In the Asia Pacific region, Singapore and Australia are among the biggest freelance employers, and total freelancer earnings in the Philippines, Bangladesh, India and Pakistan are among the highest in the world. Digitalisation also has a role to play in helping to combat skill shortages, as it allows skilled workers to be able to work flexibly, efficiently and remotely, and there is growing demand for new roles within this evolving landscape.

As the supply of skilled workers remains steady, businesses will find themselves able to focus more on adapting their workforce in the face of a rapidly developing technological landscape. The rise of technology and automation in the workplace will facilitate greater communication and flexible working, as well as demand for new jobs, but will also take the place of some existing roles. Employers should prioritise training and education to ensure their workers are well placed to work around the changes technology will bring and ensure their skills remain relevant.

The report also revealed that easing wage pressures in European and Middle Eastern markets means that employers may find it slightly easier to attract and retain top talent relative to last year. This should be reflected in boosted learning and development programmes in order to secure their talent pipeline for the future.

Commenting on the findings of the Index, Alistair Cox, Chief Executive, Hays plc said:

“After a period of global uncertainty impacted last year’s Index, there are signs emerging of a more positive backdrop for businesses around the world. This year there is cause for optimism as evidence in our report points to a slight easing in some of the key pressures and drivers impacting labour markets. However, despite this slight easing of pressure, skill shortages remain a persistent issue and one that requires the immediate attention of businesses, governments and educational institutes.

“Technology and digitisation has also had a significant influence on workers, with a growing trend towards a more digital economy. Businesses must engage with technology to reap the benefits rather than fear any fundamental change, helping to ensure they stay competitive - constantly innovating is essential to success.

“With the working age population across all countries forecast to decline by nearly a million as the workforce ages, it is vital that governments embrace skilled migration. Prosperity and growth depends on people, and without the right skills, businesses and therefore societies can flounder rather than flourish – skilled migration provides an important and necessary resolution to the global skills gap.”

*Countries include; Australia, Austria, Belgium, Brazil, Canada, Colombia, Chile, China, the Czech Republic, Denmark, France, Germany, Hong Kong, Hungary, India, Ireland, Italy, Japan, Luxembourg, Malaysia, Mexico, the Netherlands, New Zealand, Poland, Portugal, Russia, Singapore, Spain, Sweden, Switzerland, UAE, the UK and the USA