The retirement of the baby-boomer generation (born 1946-1961) from the workforce and a lack of Generation Ys (born 1976-1991) to replace them has already resulted in the contraction of the labor pool in countries such as Japan - with Australia, Canada, China, New Zealand, the United Kingdom, United States, much of Western Europe, and other nations expected to follow suit in the next decade, according to "The Global Skills Convergence: Issues and Ideas for the Management of an International Workforce" study, recently released by KPMG International.
"Increasing globalization, combined with the effects of what we call the 'demographic faultline,' will present challenges for multinational corporations unprepared for the change," said Bernard Salt, a partner with KPMG in Australia - a KPMG International member firm - and primary author of the study. "Our study argues that the labor shortage will result in what we call a 'global skills convergence' - a net flow of skilled and unskilled workers migrating between the developed and developing worlds as barriers to entry continue to diminish. Companies should be ready to manage their workforces in this new reality," he said.
"Multinational corporations can and should begin preparing for this new environment by establishing leadership groups, exposing staff to international cultures, and drawing on local staff to manage country offices," Salt added. "These and other steps have proven to be effective strategies that have eased the transition in several global corporations."
The KPMG study also predicts that selected countries in Africa, Latin America and the Middle East, as well as India, will not face the same labor shortages. As a consequence, economic migration from areas of labor surplus to areas of labor demand may occur later in the century.
"This would be the ultimate expression of Thomas Friedman's concept of the flat world: first the globalization of capital, then information, technology and work tasks, and now the globalization of talent and labor," said Salt.