Emerging labour markets: Where and how future talent can be found

According to the OECD, 40% of all young people with a tertiary education in G20 and OECD countries could be Chinese by 2020. As a consequence of different development speeds in the G20, the share of tertiary graduates in the global talent pool coming from Europe, Japan and the United States will continue to decrease – as is the case in Germany. The country is hence looking at migration as a means to compensate labour market gaps, but only with partial success, the study says. And also companies must look at pro-active international recruitment as a business case.

The OECD figures are astounding: ‘In 2000, there were 51 million 25-34 year-olds with higher education in OECD countries, and 39 million in non-OECD G20 countries. Over the past decade, however, this gap has nearly closed, in large part because of the remarkable expansion of higher education in this latter group of countries.’ In 2010 there were an estimated 66 million 25-34 year-olds with a tertiary degree in OECD countries, compared to 64 million in non-OECD G20 countries. If this trend continues, the number of 25-34 year-olds from Argentina, Brazil, China, India, Indonesia, the Russian Federation, Saudi Arabia and South Africa with a higher education degree will be almost 40% higher than the total number from OECD countries by 2020. The fastest-developing economies boast the biggest gains: China alone could go from 17% in 2000 to 29% in 2020 of all university graduates worldwide.

The economic powerhouse Germany is not a role model in this area: their share of 25-34 year olds with a tertiary education decreased by 1 percent point between 2000 and 2010, and will probably continue to decrease. The country acknowledges the need for more immigration and has hence few restrictions for skilled migrant workers, and even is among the most open countries for highly educated immigrants in the OECD. For intermediate skilled occupations, however, Germany needs to liberalise recruitment to fill a projected shortfall of 5.4 million skilled workers by 2025, the OECD says. What the study does not cover is the fact that also graduates with different skill sets and perspectives will be needed in the future and hence migration will become paramount.

The new report clearly points out German deficits, mainly the requirement of German language in companies, universities and cities. Therefore is seems important to increase the number of German speaking people also in other countries. According to the OECD, student migration to Germany would be helpful if there were more efforts made to retain them post their degrees. “German universities are the gatekeepers for a large share of skilled migration to Germany,” the report says.

For companies, the thought process should be very similar: the new business landscape requires different skill-sets and more diversity of talent in the work forces. Hence, corporations must rethink the job descriptions and related candidate profiles. They have to broaden their recruitment scope internationally and create hiring and on-boarding schemes for talent from different cultures. Then, these have to be enabled to be successful by reviewing performance and talent management systems. And last but certainly not least, corporate cultures have to be opened up to accommodate a greater cultural variety in a productive way.