According to the recently released study ‘Global Mobility of Indian Workforce’ by FICCI-KPMG, the demand for skilled workers will exceed the supply by 2030, creating a talent shortage of over 85.2 million.
Key points of the report
- Global talent crisis – The world will be short of 2 million skilled workers by 2030, affecting many industries.
- Economic impact – This shortage could lead to a loss of $8.45 trillion in annual revenue, which is equal to the combined GDP of Germany and Japan.
- Indian diaspora growth – India’s diaspora community is the second largest and fastest growing group in Australia.
- India’s GDP potential – India’s GDP can reach $6.5 trillion to $9 trillion by 2030 if it makes proper use of global opportunities.
Causes of global talent crisis
Technological change
- The fourth industrial revolution has rapidly changed the requirements of the workplace.
- New technologies such as automation, AI, data analytics and cybersecurity have increased the demand for skilled workers, but these skills are not evolving fast enough in most countries.
- The shift to a digital economy has increased the gap between supply and demand of talent.
Disparity in education and industry
- Traditional education systems are slow to adapt to changing industry needs.
- Traditional degrees fail to provide the practical skills required for emerging industries, leading to disparity between jobs and workers.
- Aging workforce and demographic changes
- Countries such as Japan, Germany and India are facing a shortage of experienced professionals.
- The gig economy and flexible work models are leading to an exodus of skilled workers from traditional jobs.
Geopolitical and immigration constraints
- Visa restrictions and stringent immigration policies in major economies are limiting the global flow of talented workers.
- Different countries are competing to attract and retain top talent, leading to talent shortages in some sectors.
Industry-specific constraints
- Sectors such as healthcare, cybersecurity, IT and manufacturing are facing an acute talent crisis due to high demand and low supply.
Brain drain
- A large number of skilled professionals from India are migrating to the US, Canada and Europe for better opportunities.
Barriers to workforce mobility
- Regulatory and immigration barriers– complex visa processes and stringent work permit rules.
- Irregularities in job recruitment– exploitative recruitment practices and human trafficking problems.
- Policy barriers and skill mismatch – lack of international recognition of Indian degrees, especially in the medical sector.
- Language and cultural challenges – language and culture related difficulties in foreign workplaces.
Infrastructure and digital mismatch
- Huge rural–urban education and digital facilities gap.
- Technical education is better in urban India, but rural areas lack internet, quality institutions and trained teachers.
Talent shortage challenges in India
- Regulatory barriers: complex immigration policies and lack of recognition of Indian degrees in some countries.
- Skill gap: mismatch between Indian training programmes and global market requirements.
- Illegal migration: exploitation of workers and damage to India’s image.
- Cultural barriers: problems of language skills and cultural adaptation hinder the integration of the workforce.
- Political environment: changing immigration policies of Europe and other regions can impact the global mobility of workers.
Government Initiatives
- Skill India Mission: Aims to train 40 crore people in various skills by 2025.
- National Education Policy (NEP) 2020: Emphasis on vocational education, flexible education system and industry collaboration.
- Make in India and Atmanirbhar Bharat: Efforts to create employment by promoting local manufacturing and entrepreneurship.
- Digital India: Promoting digital literacy and technology-based education.