Recently, we received "The Gordon Report on the Workforce," which among other things, explains the worldwide job market and its challenges. While the Gordon Report focused primarily on the U.S., the challenges and opportunities are global – as you will read below. Globally, we have millions of people who are perfectly prepared for jobs that no longer exist; at the same time, we have millions of employers who are unable to find the skilled workers they need.
Though the U.S. unemployment rate in April 2014 fell to 6.3 percent, 9.8 million workers remain unemployed. Between the underemployed and those who are categorized by the U.S. Bureau of Labor Statistics as "marginally attached to the labor force," these worker segments add up to 19.5 million more or 12.5 percent of the workforce.
More worrisome for employers is the fact that by now more than 92.6 million people are not in the U.S. labor force. That statistic means 12.6 million fewer people than in 2007, and this decline is not just due to Baby Boomers retiring.
At the same time, Gordon’s latest estimate is that 7.3 million jobs are vacant. So what is going on? As we have reported before, we have millions of people who are perfectly trained for jobs that no longer exist.
The countries of the world are "locked in a structural labor-market race between advanced technology on one side and demographics and education on the other," the report states. Today, too few people worldwide are prepared to run in this race of skill-based technical change.
Just last year, The Hays Global Skills Index issued "The Great Talent Mismatch," outlining the magnitude of this critical global issue. According to this study, the BRIC countries (Brazil Russia, India and China) have "inflexible labor markets," and Brazil is the worst (9.1 on a scale of 10). "Labor market flexibility is important to head off skills shortages." Openness to inward immigration and relatively light employment regulation ensures employers can react swiftly to stress in the labor market.
Inflexibility in these countries, as well as in the U.S., can only cause the worsening of this situation. Until employers worldwide take the responsibility to bridge these skills gaps, expect to see their respective labor markets suffer.
Special thanks to Edward E. Gordon, author of "Future Jobs: Solving the Employment and Skills Crisis," and president of Imperial Consulting Corp.
