Technological change is creating a skills gap and causing wages to stagnate, according to Hays' Global Skills Index 2019/20.
The index measures how easy or difficult it is for firms to attract and retain the most talented workers in 34 global labour markets, based on a scoring system of zero to 10. It found that one of the biggest challenges is the gulf between the skills available and demand. The talent mismatch indicator rose to 6.7 in 2019 from 6.6 in 2018, reaching the highest level since the index began in 2012.
Wage pressure remained stagnant overall (at 5.0), but in high-skilled occupations rose from 4.0 in 2018 to 4.2 in 2019.
The report cited technological development as one of the main contributing factors. It also suggested that female-dominated sectors, such as retail, could be particularly affected by technological change.
This follows the International Monetary Fund (IMF) recently finding that 11% of women in the retail sector are at high risk of losing their jobs, in comparison to 9% of men.
Hays advised governments and businesses to ensure their workforces are prepared for automation by upskilling existing roles, redeploying workers to areas less vulnerable to the effects of outsourcing and automation such as creativity and critical thinking.
Investing in training and encouraging lifelong learning will help combat wage stagnation, said chief executive of Hays Alistair Cox. “The sorts of roles we are filling today as a recruiter, particularly in the technology space, did not exist three years ago. We need to create a society where it’s perfectly normal that you will continue upskilling throughout your career,” he said.
He added that HR must accept that people may not stay at a firm even after it has invested in training them: “HR will think ‘there’s no point training these people; they’ll be off in two years'. But we need to accept that some people will go, as we’ll get others with skills.”
Part of the issue is a mismatch between how boardroom talent and those lower down the ranks approach their careers, he said. Whereas many in positions of power have taken a traditional route of working for one company for several years and climbing through the ranks, Millennials can be more interested in moving relatively quickly between different jobs, he said.
“They [Millennials] are interested in money, but they’re much more interested in the variety and type of work. They are much more willing to do a portfolio of jobs... Locking people into a particular job doesn’t wash in today’s world,” said Cox.
Beyond concerns around skills and technology, the index found there was little change in other factors affecting the labour market. Educational flexibility stayed static at 5.4, labour market participation at 5.2, and labour market flexibility at 5.3.
