Smaller labor supply slows economic growth. To offset this, labor productivity will be the most important tool. This productivity will mainly come from investments in innovation and new technology. But to see results, organizations will need to make the most of their human capital:
- Using SWP on a global scale, identify where labor shortages may occur over the next ten years
- Retain skilled employees, encourage and facilitate the transfer of knowledge through training, phased retirement for veteran employees, among other strategies
- Move the work to where the workers are: select production and sales locations according to the geographic areas with larger workforce availability
In addition, most mature and even several emerging economies will be facing serious shortages in workers, and not just in the most skilled occupations. Tighter labor markets around the world will result, which in turn will put upward pressure on labor costs. To stay competitive, companies need to strategize to mitigate those costs.