UK risks labour shortage of millions by 2030

17 July 2018

The UK is facing a major talent shortage, which could see the nation miss out on an unrealised revenue of more than £300 billion. With the approach of Brexit threatening to stifle the flow of labour between Britain and the continent, the effects of an ageing population could see almost 3 million jobs left unfilled by 2030.

For decades, mechanisation and automation have been spoken of as creating a glut of human resources, with the ominous suggestion that robots are inevitably coming for almost every job prompting many experts to worry of mass unemployment and a global economic realignment. However, such thinking often fails to take into account the huge demographic, economic and geo-political shifts occurring at the same time. Ageing populations across developed economies mean that there may soon not be enough new members of the workforce to replace retirees, while closing borders and an increasingly hostile environment for migrant workers may exacerbate this further.

According to new data analysis conducted by Korn Ferry, in partnership with Man Bites Dog and Oxford Analytica, this combination of factors is leading developed economies to struggle with a rapidly growing talent shortage. The researchers looked at the effects of talent shortage, and found that while the issue already comes with a massive economic cost, the development will only worsen in the coming decades.

Indeed, the study finds that by 2030, there will be a global human talent shortage of more than 85 million people – roughly equivalent to the population of Germany. Left unchecked, in 2030 that talent shortage could result in about $8.5 trillion in unrealised annual revenues.

Looking at the results, a recurring theme appears to be that the nations which look set to be worst hit by this are either typically or increasingly hostile to the movement of international labour, while also hosting an ageing population. This is typified by the US, with the largest amount of unrealised revenue of $1.7 trillion, although only the third largest labour shortage, at 6.6 million unfilled roles – illustrating the  high value of the jobs which may be vacant in 2030.

Talent shortage costs $8.5 trillion in foregone revenues by 2030

Surprisingly, China, which currently hosts the world’s largest population, will be home to the largest labour shortage outright. Some 6.7 million jobs could be left unstaffed by 2030, although this becomes less surprising when the nation’s shifting demographics are considered. According to the United Nations, China is ageing more rapidly than almost any country in recent history, and it’s dependency ratio for retirees could rise as high as 44% by 2050. While the relaxing of China’s infamous one child policy in 2016 will soften this slightly, allowing for a larger next generation to enter the workforce, a huge $1.4 trillion could still be missed in unrealised revenue.

Proportionally speaking, however, Japan looks set to be hit even harder. Japan's overall population is shrinking due to low fertility rates, meaning its ageing population bracket is rapidly increasing. This is coupled with the nation’s historic hostility toward welcoming newcomers to the shores of its islands. Japan has been notoriously steadfast in its refusal to increase quotas for migrant labour, going so far as to openly favour the development of robots to care for the elderly over the softening of border policies. In 2009,  the Japanese Government even introduced a programme that would incentivise Brazilian and other Latin American immigrants to return to their nation of origin, with a stipend of $3,000 for airfare and $2,000 for each dependent. Now, however, Japan is faced with a potential labour shortage of 13.8 million come 2030, which could lose the country some $1.3 trillion in revenues.

Following in fourth is Germany. While the country is central to the EU, and subsequently benefits from drawing labour from across the 28 member states, its access to migrant workers is limited to “skilled labour”, while the employability of those arriving is curtailed by linguistic barriers. In early 2018, it was reported that 55%, of the recipients of unemployment benefits had a migrant background. According to the Bundesagentur für Arbeit (German Federal Employment Agency), while part of this was due to a lack of employable skills, it was also largely thanks to migrants lacking knowledge of the German language. The failure to adapt the working environment to incorporate labour such as this is partially why Germany could face a shortage of 4.9 million by 2030, and unrealised revenues of $630 billion.

The UK

Britain is likely to see a severe impact on its economy via the coming talent shortage, according to Korn Ferry. The country is set to miss out on $408 billion (£307.55 billion) in unrealised revenue by 2030, while 2.9 million jobs could be in line to go unfilled.

With a ‘Hard Brexit’ still very much on the cards, along with a much-feared ‘No Deal’ scenario, either of which could scupper free movement and trade between the UK and the mainland, the triggering of Article 50 back in March 2017 may lead to various undesirable outcomes. Even in a scenario where skilled workers are still able to enter the country, there may still be an exodus of young, highly skilled workers. As many as 10% of EU nationals with post-graduate degrees, who earn above £50,000 a year are considering returning to the mainland, creating the potential for a large talent shortage for employers, and placing a strain on public services such as the NHS.

Of the sectors studied by Korn Ferry, the financial sector is the hardest hit internationally, with a trifling deficit of 10.7 million employees, especially in the most developed countries in Europe. A major loser is the London financial sector, which, with a shortage of half a million employees, will miss £67.9 billion (€77 billion), or 7% of the value of the entire sector.

The research warns that if the government and businesses fail to act, by 2030 the talent shortage could become “a real crisis”. The authors added, “Companies now have to work on this to prevent this: staff planning is essential, as is good knowledge of the talent pipeline.”



Project management industry adds £156 billion of value to UK economy

15 April 2019

Project management has grown into one of UK’s largest areas of business over the past decade, amid the increasing ‘projectification’ of work. With the gross value added to the UK economy by project management estimated to be £156 billion, this trend is likely to continue in the coming era.

Despite the huge success of project management in recent years, until now there has been relatively little data available on the size of project activity. As a result, there has been a great deal of debate on things like the number of people involved in the sector, the number of projects, and how it contributes to economic output. Due to this need for clarity, APM, the UK’s professional body for project management (the largest organisation of its kind in Europe, with 28,000 individual members) commissioned economists from PwC to shed light on the industry's economic impact.

The research concluded that the profession makes a more significant contribution to the UK economy than the financial services sector. 2.13 million full-time equivalent workers (FTEs) were employed in the UK project management sector, generating £156.5 billion of annual gross value added (GVA). In comparison, the financial services sector contributes £115 billion, and the construction industry adds £113 billion.

Gross value added to UK economy

Commenting on the discovery, Debbie Dore, Chief Executive of APM said, “Project management runs as a ‘golden thread’ through businesses, helping to develop new services, driving strategic change and sector-wide reform.”

Who is a ‘project manager’?

To reach these estimates, PwC’s researchers used detailed models to map out the value of project management activity. They ultimately defined relevant ‘projects’ as “temporary, non-routine endeavours or rolling programmes of change designed to produce a distinct product, service or end result… [with] a defined beginning and end, a specific scope, a ring-fenced budget, [and] an identified and potentially dedicated team with a project manager in charge.”

Building on this, they then went on to define what the act of project management actually is. The job consists of applying “processes, methods, knowledge, skills and experience” so that clients can meet their objectives and bring about planned outputs or outcomes. The analysts added that this includes “initiating the project, planning, executing, controlling, quality assuring and closing the work of an identified and dedicated team according to a specified budget and timeframe.”

Importantly, it should be noted that the profession is not exclusive to only roles explicitly labelled as ‘project manager’, but to any role where specialist project management skills are used. This means that across sectors these roles can have very different titles, from the self-explanatory contract managers of procurement, or the campaign managers of advertising, to the likes of festival co-ordinators in the events sector, and many more. The roles in question also span all strategic levels of the profession, from strategic to tactical and operational positions.

Gross value added of project management profession

From a sector perspective, the financial and professional services, construction and healthcare industries make up almost two-thirds of the total project management GVA. At the same time, understandably, the UK Government has a huge project portfolio, which further drives the size of the GVA the sector contributes, thanks to megaprojects like HS2 and Crossrail.

Commenting on this to the report’s authors, Oliver Dowden, Minister for Implementation remarked, “Project delivery is at the heart of all Government activity, whether it’s building roads and rail, strengthening our armed forces, modernising IT or transforming the way government provides public services to citizens. Getting these projects right is essential if we are to ensure that we build a country that works for everyone.”

Throughout 2019, 26 major government projects were delivered, representing a fifth of the overall Government Major Projects Portfolio (GMPP) of 133 projects. According to the IPA annual report 2017-18, these represented a whole life cost of £423 billion. In addition to this were a plethora of smaller scale projects, and those in early development.

Elsewhere, with the increasing digitalisation of the economy impacting entities of all shapes and sizes, IT and digital transformations tended to dominate the projects of the UK scene alongside new product development projects, with a respective 55% and 46% of organisations in the research sample having undertaken these types of project in the past year. At the same time, this varied across sectors, and unsurprisingly, in the construction and local government sectors, fixed capital projects were the main project type undertaken.


Looking to the future, 40% of business leaders expect project management will grow in the coming years due to the increased use of projects – or the ‘projectification’ of the UK. In a trend that has been witnessed elsewhere, organisations have to rapidly and continuously change in the digital age of business, driving the need for project management.

Outlook for project management services

An increased focus on value over cost – especially in the construction sector – and a forecast increase in the number of international projects are predicted to be key drivers of growth, according to the expert contributors. However, this will not happen in the absence of challenges; more than half of organisations expressed concern over the perceived impact of political uncertainty in the UK. Skills and capability shortages were also cited as a potential barrier by a third of organisations.

With regard to budgets, meanwhile, a third of those surveyed by PwC said they expect the size of project budgets will increase in the coming three years, while 40% anticipate a growth in project size. As the profession continues to mature, and as the recognition of the importance of good project management grows, it is expected that a greater proportion of project work will gain more distinct attribution to the profession itself, giving more recognition and appreciation to the role of the project manager.

Speaking on the findings of the study, Sandie Grimshaw, a Partner at PwC, concluded, “The project management profession is relatively new compared to some other professions, such as lawyers, teachers and doctors. However, as project management is a core competence vital to organisations in the UK, the profession is critical and will continue to grow in stature.”