The global labour markets are rapidly evolving, influenced by demographic shifts, technological advancements, changing workforce preferences, and unexpected events. While this transformation impacts costs, productivity and economic growth, it also offers opportunities for innovation and investment in technology and human capital. Understanding these shifts is crucial for companies to adapt strategies, embrace technology, and focus on talent attraction and skill development.
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Population ageing and declining birth rates are transforming global labour markets, particularly in advanced economies. By 2040, the share of the population aged 65+ is forecast to surge by 33% in developed countries, accompanied by a 4% drop in working-age population. The ageing trend is set to exacerbate the existing labour shortages and create significant skill gaps, driving competition for skilled talent and leading to higher labour costs.
Rapid tech advancements are reshaping the global labour markets by driving demand for skills such as data science, programming, AI, cybersecurity and engineering, while displacing jobs that are routine and repetitive. While this trend exacerbates the existing skill mismatch, it also offers potential for productivity growth and enhanced efficiency, especially for businesses that adapt quickly, effectively employ new technology and invest in skill development.
The rise of hybrid work and the gig economy, driven by rapid digitalisation and accelerated by the pandemic, have heightened workforce expectations for flexibility, work-life balance and compelling employer value propositions. This shift has challenged traditional labour market structures, but has also enabled talent globalisation, benefiting both advanced economies facing labour shortages and emerging markets with growing youth populations.
To thrive in the new labour market landscape and effectively address shortages and skill gaps, businesses should prioritise strategic talent acquisition and retention, invest in internal talent development and upskilling, and leverage global talent pools and educational partnerships. Additionally, investments in innovative technology such as automation and AI can help cut labour costs, enhance efficiency and productivity, and bolster competitive advantage.
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