One of the great perplexities of the current labor market in the US--and many other countries around the world--is the "mismatch" happening between employers and job seekers. At the same time that there are businesses desperately seeking workers, there are record numbers of working-age people who aren't participating in the labor force. A 2015 report by McKinsey Global Institute (MGI) asserts that on a global basis a hefty 30-45% of the global working-age population is either unemployed, inactive in the workforce or working just part-time.
Why aren't more people working more, and what can we do about it? What are the limits to "full employment"?
For the most part, these numbers don't represent people opting out of the workforce. They are people who can't find the opportunities that match what they want--whether that's a job in their desired field, a set level of income, or a flexible schedule.
Real-time labor marketplaces speed employment
One reason for the missed connections between job-seekers and employers is the persistent inefficiency of labor markets worldwide. While globalization has transformed global labor markets, in some respects labor markets still need to catch up to reap the full benefits of mobile technology for the communication, assignment and execution of work. Work assignment and execution has yet to make the digital leap that will help boost both workers and their employers.
Accessed via smartphone or tablet, mobile workforce applications can serve as real-time marketplaces connecting individual workers with suitable work opportunities. Traditional employers can use these technologies to quickly pair specialized workers with assignments on short notice. On the other side of the table, the growing global ranks of independent consultants, contractors and freelancers can use them to market their skills more widely and find new clients more quickly. Online talent platforms created over the past two decades and now gaining global traction--LinkedIn, Monster, Viadeo, Xing and others-- have solved the problem of aggregating and increasing visibility to job opportunities. The next step for mobile workforce applications is to speed the process of getting people with relevant skills to work.
Workforce technologies lift every economy
MGI predicts that by 2025, online and mobile workforce platforms could raise global GDP by $2.7 trillion and increase employment by 72 million full-time equivalent positions. Countries with persistently high unemployment--like Spain, Greece and South Africa--stand to gain the most in terms of GDP growth, but most every type of economy will profit from greater adoption of workforce technologies.
One interesting case in point is Japan, where unemployment has hovered around a very low 3% for the past few years. With a large aging population and fewer younger workers to take over, Japan is facing a pressing labor shortage, particularly in food service and retail. (In the short term, the 2020 Olympics will only exacerbate those strains.) HR provider Randstad Japan has made significant inroads helping with staffing challenges in Japan by integrating digital tools to help dispatch the approximately 2,000 on-demand positions it fills per day. With plans to transition to a fully digital platform later this year, Randstad will be able to match more workers and jobs, faster.
The US labor market could potentially benefit further from data captured via online and mobile workforce solutions, by revealing key trends in the demand for job skills, and providing an individualized path for workers to improve skills and earning potential based on their work history. As concern over the rising cost of higher education continues to grow relative to the perceived benefits of a degree, this readily-available data could help students align their educational paths to the skill sets they need for available jobs. Ideally, this kind of transparency will result in more students pursuing careers both low skilled and high skilled professions that are currently in short supply and high demand.
While innovations in workforce technology can't solve the larger economic issues at play in labor shortages, I believe they are one important part of the solution. Let's keep endeavoring to empower both the job-seekers and employers of the world by putting the right tools at their fingertips.
The Morning Email helps you start your workday with everything you need to know: breaking news, entertainment and a dash of fun. Learn more