Help wanted: The future of work in advanced economies

Some 40 million workers across advanced economies are unemployed. With many nations still facing weak demand—and the risk of renewed recession—hiring has been restrained. To help develop appropriate new responses, MGI examines five trends that are influencing employment levels and shaping how work is done and jobs are created.

1. Technology and the changing nature of work.

Over the past three decades, technology has changed how production and routine transaction work is done. The next frontier is interaction work, the fastest-growing employment category. This includes employees performing low-skill jobs that must be done face-to-face (for example, day-care work), as well as the managers and professionals who are the costliest resources. One way to redesign high-skill interaction work is disaggregation, or reassigning routine tasks to lower-skill employees.

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2. Skill mismatches

There are growing mismatches between the needs of employers and skills of the workforce. Despite rising educational attainment across advanced economies, by 2020, the United States may have 1.5 million too few workers with college or graduate degrees and nearly 6 million too many who have not completed high school; France could be short 2.2 million baccalaureate holders and have 2.3 million too many workers who lack that degree.

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3. Geographic mismatches

Geographic mismatches also are exacerbating the jobs problem: workers with desired skills may be in short supply where companies are hiring, while places with the highest unemployment may have little job creation.

4. Untapped talent

Advanced economies have growing pools of underused talent: older workers, women, and youth. Workers older than 55 are highly experienced and can help companies reduce or avoid skill gaps if they don’t retire. Many women have the education to fill the skill gap. Young people who leave school without the skills they need to be hired where they can get skills suffer lifelong earning handicaps and are more likely to require social services.

5. Disparity in income growth

The trends in job creation and employment described here have significant impact on incomes across advanced economies. Income growth for households at the bottom of the distribution has been low or even declining in many countries, which raises questions about aggregate demand, living standards, and social stability.

The result of these five trends is a jobs and employment challenge in advanced economies that extends beyond restoring jobs lost to recession, many of which will never return, even with robust economic recovery. The jobs that will be created will not look like those that have been lost and may not be easily filled by today’s unemployed. The central challenge is to understand how the nature of work is changing and to prepare as many workers as possible for the jobs of the future.

Source: http://www.mckinsey.com/Insights/MGI/Research/Labor_Markets/Future_of_work_in_advanced_economies

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