Rainer Strack: The surprising workforce crisis of 2030 — and how to start solving it now

New Section

In this section, the speaker introduces themselves and shares some personal information about their background and the significance of the year 2014.

Personal Background

• The speaker mentions that 2014 is a special year for them as it marks 20 years as a consultant, 20 years of marriage, and turning 50 in one month. They were born in 1964 in a small town in Germany.

• The speaker notes that November 1964 had a high birth rate in Germany, with many babies being born on that gray November day.

New Section

This section focuses on the birth rate in Germany and how it has changed over time.

Birth Rate in Germany

• The speaker mentions that 1964 had the highest birth rate ever recorded in Germany, with over 1.3 million births. In contrast, last year's birth rate was just over 600,000.

• The speaker highlights that this decline in birth rate means there will be fewer people entering the workforce compared to previous generations.

New Section

Here, the speaker presents a visual representation of the German age pyramid and points out their position within it.

German Age Pyramid

• The speaker shows an age pyramid graph representing Germany's population distribution.

• They point out their position at the top of the pyramid as someone who will soon reach retirement age.

New Section

This section discusses how the age structure of the working-age population will change over time and when baby boomers like the speaker are expected to retire.

Aging Workforce

• The speaker explains that they are primarily interested in the potential working-age population (people aged 15 to 65).

• Through a simulation, the speaker demonstrates how the peak of the working-age population is shifting to the right, indicating that many baby boomers will retire by 2030.

New Section

The speaker emphasizes that predicting the potential working-age population in 2030 does not require forecasting birth rates. They also highlight the significant decrease in this population compared to 2014.

Future Working-Age Population

• The speaker states that the potential working-age population in 2030 is already determined today, except for possible higher migration rates.

• They compare the red area representing the potential working-age population in 2030 with that of 2014 and note that it is significantly smaller.

New Section

This section explores the implications of changing labor supply and demand for Germany.

Labor Supply and Demand

• The speaker discusses how Germany's labor supply will decrease significantly due to demographic changes.

• They mention that forecasting labor demand is challenging but present a scenario based on Germany's GDP and productivity growth over the past two decades.

• According to their calculations, if Germany wants to maintain its current growth trajectory, there will be a major talent shortage, with eight million people missing from the workforce by 2030.

New Section

Here, the speaker highlights various measures Germany needs to take to close its labor gap and avoid stagnation.

Closing the Labor Gap

• The speaker suggests several measures for closing Germany's labor gap: increasing migration, encouraging more women to join the workforce, raising retirement age (despite recent lowering), and implementing these measures simultaneously.

• They emphasize that failure to address this issue could lead to stagnation as there won't be enough workers capable of generating economic growth.

New Section

This section expands the discussion to include other countries and presents a simulation of labor supply and demand for the largest economies in the world.

Global Workforce Crisis

• The speaker reveals a simulation of labor supply and demand for the top 15 economies, representing over 70% of global GDP.

• They show that by 2020, some countries still have a labor surplus (blue), while others face a labor shortfall (red). Some countries are on the borderline (gray).

• However, by 2030, there will be a global workforce crisis in most major economies, including three out of four BRIC countries (Brazil, Russia, China).

New Section

This section highlights that the situation regarding labor shortages and skill mismatches will be even more challenging than average numbers suggest.

Skill Mismatch

• The speaker explains that the average numbers presented earlier do not fully capture the extent of skill mismatches.

• When breaking down the data into different skill levels, they find even higher shortfalls for high-skilled workers and partial surpluses for low-skilled workers.

• This indicates that in addition to an overall labor shortage, there will be significant challenges related to education, qualification, and upskilling.

New Section

Here, the speaker explores whether technology can alleviate the global workforce crisis or exacerbate it.

Impact of Technology

• The speaker raises questions about how technology will affect job displacement and productivity.

• They mention that their calculations already account for productivity growth driven by technology.

New Section

The speaker shares an anecdote about German productivity and discusses how technology may replace jobs in various industries.

Job Replacement by Technology

• The speaker recalls an old comment about Germans' reputation for productivity but notes that technology has changed the perception.

• They highlight that technology will not only replace jobs in the production industry but also pose a threat to office workers through automation, artificial intelligence, and big data.

New Section

The speaker poses a key question about whether technology can help solve the global workforce crisis.

Role of Technology

• The speaker emphasizes that the crucial question is not if technology will replace jobs but when, how fast, and to what extent it will do so.

• They raise the question of whether technology can provide a solution to the challenges posed by labor shortages and skill mismatches globally.

New Section

This section discusses the increasing role of electronic parts in car production and the emergence of new jobs related to cognitive systems engineering.

The Growing Role of Electronic Parts

• In 1980, less than 10 percent of a car's production cost was due to electronic parts.

• Today, this number has increased to more than 30 percent.

• It is projected to grow to over 50 percent by 2030.

• The rise in electronic parts requires new skills and has created new job opportunities.

Cognitive Systems Engineer

• One example of a new job is the cognitive systems engineer.

• Their role is to optimize the interaction between drivers and electronic systems.

• In 1980, such a job did not exist or was not anticipated.

Impact on Jobs and Skills

• Despite advancements in automation and robotics, the overall number of people involved in car production has only slightly changed over the years.

• Technology will replace some jobs but also create new ones.

• This leads to a skill mismatch as technology advances faster than skill development.

Challenge for Governments and Businesses

• The de-averaging effect reveals a crucial challenge for governments and businesses.

• High-skilled individuals will be in high demand in the next decade.

• Understanding their preferences, willingness to work abroad, and job preferences becomes essential.

Global Survey on Job Seekers

• A global survey was conducted among more than 200,000 job seekers from 189 countries.

• More than 60 percent of respondents were willing to work abroad.

• Among employees aged 21 to 30, this percentage was even higher.

Mobility Preferences

• While there is mobility worldwide, some countries are less mobile.

• The least mobile countries identified were Russia, Germany, and the U.S.

• The top choice for potential relocation was the U.S., followed by Australia, France, Switzerland, Germany, and Canada.

Job Preferences

• Salary ranked eighth out of 26 topics in job preferences.

• The top four priorities were related to culture: having a great relationship with the boss, work-life balance, relationships with colleagues, and being appreciated for one's work.

Recognition in the Workplace

• People seek recognition in their jobs on a daily basis.

• A global workforce crisis is emerging due to labor shortages, skill mismatches, and cultural challenges.

• Recognition becomes a crucial factor in addressing this crisis.

New Section

This section highlights the urgency of addressing the global workforce crisis and outlines a people strategy that includes forecasting supply and demand for different jobs and skills, attracting great people, upskilling them, and fostering an appreciation and relationship culture.

Global Workforce Crisis

• The global workforce crisis consists of labor shortages, skill mismatches, and cultural challenges.

• We are currently at a turning point where action needs to be taken urgently.

People Strategy

1. Forecasting Supply and Demand:

• Workforce planning becomes more important than financial planning.

• A plan is needed to anticipate future job demands and required skills.

2. Attracting Great People:

• Strategies should focus on attracting Generation Y individuals, women, as well as retirees.

3. Educating and Upskilling:

• There is a significant challenge in upskilling the workforce to meet evolving demands.

4. Retaining the Best People:

• Creating an appreciation and relationship culture is essential for retaining talented individuals.

Changing Attitudes

• It is crucial to change attitudes towards employees, viewing them as valuable assets rather than costs or machines.

• Recognizing the importance of human resources is key to addressing the global workforce crisis.