"Increasing globalization, combined with the effects of what we call the 'demographic faultline,' will present challenges for multinational corporations unprepared for the change," said Bernard Salt, a partner with KPMG in Australia - a KPMG International member firm - and primary author of the study. "Our study argues that the labor shortage will result in what we call a 'global skills convergence'- a net flow of skilled and unskilled workers migrating between the developed and developing worlds as barriers to entry continue to diminish. Companies should be ready to manage their workforces in this new reality," he said.
"Multinational corporations can and should begin preparing for this new environment by establishing leadership groups, exposing staff to international cultures and drawing on local staff to manage country offices," Salt added. "These and other steps have proven to be effective strategies that have eased the transition in several global corporations."
The KPMG study also predicts that selected countries in Africa, Latin America and the Middle East, as well as India, will not face the same labor shortages. As a consequence, economic migration from areas of labor surplus to areas of labor demand may occur later in the century.
"This would be the ultimate expression of Thomas Friedman's concept of the flat world: first the globalization of capital, then information, technology and work tasks, and now the globalization of talent and labor," said Salt.
"The face of the international workforce is changing," he added. "Labor and talent will flow between countries. Generation Y already has a global perspective thanks to the Internet and the relative affordability of international travel. They are taking this mindset into the workplace and are looking for global opportunities for migration and career advancement."
A series of steps were identified in the study to help mitigate issues associated with managing a global workforce. Some of these include:
- Establishing a future leaders group;
- Transferring management of local offices to local staff;
- Exposing staff to global cultures;
- Pursuing a policy of workplace diversity;
- Developing tailored career plans.
The KPMG study - which draws on data from the United Nations Population Division and interviews with key executives who have each had more than 25 years of experience in managing a global workforce - was commissioned by the global International Executive Services practice, comprising professionals from several KPMG International member firms.
"Clearly, multinational corporations will rely even more on expatriates and the recruitment of skilled local talent within the target country and region. These processes require careful and strategic management to avoid compliance pitfalls and ensure competitive assignment packages," said Ben Garfunkel, national partner in charge of the U.S. member firm's International Executive Services practice. "In addition, attracting and retaining Generation Y talent is a priority and establishing new programs and policies such as integrating international assignments into individually tailored career plans will be necessary."
