Global shortage of skilled labour mars business growth prospect

PHOTO: Global shortage of skilled labour mars business growth prospect

THAILAND - Thai companies are not alone in complaining about a shortage of skilled labour, as their counterparts across the globe are experiencing the same problem and the epidemic is weighing on business growth prospects.

According to new research from the "Grant Thornton International Business Report" (IBR), 39 per cent of businesses around the world are struggling to recruit the right people, with a lack of technical skills cited as the primary problem (64 per cent).

The concern is that a lack of talent will dampen business productivity, ultimately threatening future growth and profitability.

"Even the United Nations in a report a few years ago predicted a serious contraction of the labour force around the world," said Tom Sorensen, partner and head of Grant Thornton's Executive Recruitment division in Thailand. "Both China and Singapore are now and for the next few years seeing more people leave the labour force than entering.

"Thailand will reach this status around 2020-2025. If you already think it's hard to find people in Thailand, you ain't seen nothing yet, I'm afraid."

"With unemployment running so high in many mature economies, it is somewhat ironic that business leaders are concerned by a lack of skills. In the short term, they will need to plug these skills gaps with people from outside the organisation as best they can.

"But in the longer term, they need to invest in their internal training programmes to mould the people that will help them deliver on strategy, innovate and ultimately grow," he said.

He remarked that a business is nothing without its people, and that a great team with an average plan will be far more successful than an average team with a great plan.

"The best people increase productivity, save an organisation time and money and ultimately grow the business. So, in the long term, business leaders need to be confident that their own training programmes will be able to deliver talent sustainably," he added.

The "IBR Report 2013", which contains data from interviews with 6,400 chief executive officers, managing directors, chairmen or other senior executives from all industry sectors globally from August to December last year, shows that the shortage of technical skills is as much an issue in developed as in emerging economies.

It is cited by 61 per cent of BRIC (Brazil, Russia, India and China) businesses and 65 per cent of their peers in the Group of Seven.

A lack of both work experience (56 per cent) and qualifications (54 per cent) is also mentioned, while roughly one in five business leaders cite restrictions on immigration.

The impact of these workforce issues on business growth prospects is evident. The IBR reveals that more than one in four businesses (28 per cent) expect their 2013 expansion plans to suffer as a result of skills shortages, rising to 36 per cent in the BRIC economies.

This has dropped from 35 per cent globally pre-financial crisis when employment levels were much higher - particularly in mature economies.

"We have seen some evidence of improved dialogue between educational institutions, governments and business leaders, but this research should give fresh impetus to their discussions.

"There is clearly a disconnect when, on the one hand, business leaders are crying out for more skilled labour, and on the other, swathes of unemployed people are crying out for a job," Sorensen added.

"The situation amounts to a huge waste of human capital, which is good for neither businesses nor the unemployed.

"Ultimately economic growth suffers: businesses are constrained from expanding and people without work don't have sufficient income to create demand for products and services - it's a vicious cycle. Efforts to boost skills should be high on the public policy agenda."