Hays plc, the global specialist recruiting firm, has called on governments and industries across the world to take joined-up action to tackle the looming threat of increased global unemployment as the world’s working population is set to increase dramatically.  With many countries already at record levels of unemployment, co-ordinated action needs to be taken now to avert future labour crises as significantly more people are set to join the global labour force.

Hays, which placed more than 230,000 people in work across 30 countries in 2010,  publishes a seminal report; Creating Jobs in a Global Economy, compiled in partnership with economic forecaster, Oxford Economics, illustrating the challenges ahead for employers, employees and governments across the world.

The report forecasts the dramatic movements of workforce, power and wealth across the globe over the next 20 years.  The world’s working-age population is expected to increase by over a billion people in this timeframe.  However, all of this growth will be developing economies. The developed world will see its workforce shrink and age.

Governments and industries must start to plan now how they will deal with this imbalance, both to harness the economic potential that this larger workforce can provide as well as creating the skills that will otherwise become in increasingly short supply in many areas.  Developing markets will face a period of rapid industrialisation and infrastructure construction which will require access to skilled and experienced workers currently unavailable in sufficient numbers domestically.  Similarly, the developed markets will need to find ways of maintaining their competitive edge in key industries by investing in the future skills required, albeit against a backdrop of a smaller and older pool of workers.

Alistair Cox, CEO, Hays, said, “Our report illustrates the profound and stark challenges our world will face in the future both to create employment opportunities for a billion more people and balance the mismatch we are already seeing between supply and demand of key skills.  Only by thinking globally can governments and companies put in place the environment to solve these conflicting challenges and create the basis for full employment and a sound global economy.”

The report demonstrates the need for employment policy to be discussed at the G20 in Mexico and at the WEF next year.  Cox added, “Today everyone is talking about the growth in the Chinese population.  The fact is, China’s working age population is set to plateau and then decline in our generation, just like many countries in the West.  No one is yet talking about how industries will employ the extra billion people who will soon be looking for work in India, Africa and South America.  That is a huge opportunity if governments and businesses get it right, but a big social problem if we get it wrong.”

Jens Tholstrup, Managing Director UK, Oxford Economics commented:”At a time of enormous and rapid change, all organisations need to better understand how they will be impacted by global trends. Hays enlisted the support of Oxford Economics to help them anticipate how these trends will shape the market for skilled labour over the next two decades. The analysis we have undertaken supports Hays’ strategy of developing its international presence in high growth potential countries and sectors and its desire to engage with policymakers across the globe on labour market policies.”

Hays have developed a five point plan that should be the basis of further discussion by world and business leaders:

1.         Keep national borders open for the movement of skilled labour.
This report demonstrates there needs to be a massive transfer of skills and labour between the developed and developing worlds, in both directions.  For example, the developing world will need thousands of skilled engineers from America and Europe whilst there will be huge demand for health workers in the other direction as populations’ age. Labour protectionism will only cause hardship and ultimately stunt world economic growth.

2.         Agree an international code to facilitate employee migration.
Currently policy on skill migration is decided on a national or at best regional level, despite the fact that these are global trends. This creates a piecemeal, and often infuriatingly complex and inefficient set of rules governing the movement of labour. We would like to see these issues debated on a world scale, through the G20 or similar body to agree a code to govern the enormous cross-border flows of skilled labour that this report predicts.

3.         Invest in training and education.
This report shows that the world’s labour market will become increasingly ‘hourglass’ shaped, with semiskilled workers becoming squeezed out of an automated workplace. To alleviate this trend all governments and companies need to invest in equipping people with relevant skills for our future industries.

4.         Create employment opportunities in the developing world.
In the past 20 years there has been enormous growth in employment in China, as the population there has increased rapidly. But the number of people of working age in China will reach a plateau in the next 20 years and attention must move elsewhere, to the Indian subcontinent, Latin America and Africa. This vast new workforce represents a huge opportunity for those who can tap into it, or potential dissatisfaction and unrest if it is left idle.

5.         Retain older people in the workplace.
Over the next 20 years developed economies will become increasingly reliant on the contribution from workers aged 60 or more. Many countries such as Britain have already passed anti-discrimination legislation to enable older people to stay at work and remain productive, but there is more to be done both in terms of maintaining the skills of an aging workforce as well as providing opportunities for these workers.

‘Creating Jobs in a Global Economy 2011-2030’ follows the publication last year of ‘Action on Skills and Jobs: The Hays Manifesto for Employment’ that outlined the actions needed to create a healthy employment market in the UK.