If employers choose to compete for talent on the basis of pay alone, a salary war for highly-skilled workers is inevitable as global talent shortages increase, according to a study by Korn Ferry.
The management consultancy believes the situation could add US$2.5 trillion to annual payrolls globally by 2030, potentially jeopardising companies’ profitability and threatening business models.
Bob Wesselkamper, global head of Korn Ferry Rewards and Benefits Solutions, explained: "The new era of work is one of scarcity in abundance: there are plenty of people, but not enough with the skills their organisations will need to survive. While overall wage increases are just keeping pace with inflation, salaries for in-demand workers will skyrocket if companies choose to compete for the best and brightest on salary alone."
Financial and business services firms face a potential wage hike of more than US$440 billion by 2030, the report found, more than double the wage premium of the other sectors examined.
Meanwhile, the wage premium for technology, media and telecommunications companies could almost triple within the next decade, surging from more than US$59 billion in 2020 to US$160 billion by 2030. On the other hand, manufacturing - a critical driver of growth for many emerging economies - could stall under the impact of anticipated salary increases of more than US$197 billion by 2030, the report said.
But it is US and Japanese companies that should expect to pay the most. The US faces a wage premium of more than US$531 billion by 2030, while Japan is predicted to pay an extra US $468 billion by 2030.
Unsurprisingly, smaller markets with limited workforces are likely to feel the pressure most though, with Singapore and Hong Kong predicted to face salary premiums equivalent to more than 10% of their 2017 GDP by 2030. The UK’s wage premium is expected to amount to 5% of its 2017 GDP and France’s could hit 4%.
India is the only economy that can expect to avoid upwardly spiralling wage costs, as unlike any other country in the study, it is anticipated to benefit from a highly-skilled talent surplus.
Emma Woollacott is a freelance business journalist. Her work has appeared in a wide range of publications, including the Guardian, the Times, Forbes and the BBC.
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If employers choose to compete for talent on the basis of pay alone, a salary war for highly-skilled workers is inevitable as global talent shortages increase, according to a study by Korn Ferry.
The management consultancy believes the situation could add US$2.5 trillion to annual payrolls globally by 2030, potentially jeopardising companies’ profitability and threatening business models.
Bob Wesselkamper, global head of Korn Ferry Rewards and Benefits Solutions, explained: "The new era of work is one of scarcity in abundance: there are plenty of people, but not enough with the skills their organisations will need to survive. While overall wage increases are just keeping pace with inflation, salaries for in-demand workers will skyrocket if companies choose to compete for the best and brightest on salary alone."
Financial and business services firms face a potential wage hike of more than US$440 billion by 2030, the report found, more than double the wage premium of the other sectors examined.
Meanwhile, the wage premium for technology, media and telecommunications companies could almost triple within the next decade, surging from more than US$59 billion in 2020 to US$160 billion by 2030. On the other hand, manufacturing - a critical driver of growth for many emerging economies - could stall under the impact of anticipated salary increases of more than US$197 billion by 2030, the report said.
But it is US and Japanese companies that should expect to pay the most. The US faces a wage premium of more than US$531 billion by 2030, while Japan is predicted to pay an extra US $468 billion by 2030.
Unsurprisingly, smaller markets with limited workforces are likely to feel the pressure most though, with Singapore and Hong Kong predicted to face salary premiums equivalent to more than 10% of their 2017 GDP by 2030. The UK’s wage premium is expected to amount to 5% of its 2017 GDP and France’s could hit 4%.
India is the only economy that can expect to avoid upwardly spiralling wage costs, as unlike any other country in the study, it is anticipated to benefit from a highly-skilled talent surplus.
Emma Woollacott is a freelance business journalist. Her work has appeared in a wide range of publications, including the Guardian, the Times, Forbes and the BBC.
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