Global Dependence on Immigrant Labor Will Grow

By J.J. Smith Sep 30, 2008
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By 2018, the labor pools in major economies around the world will decrease significantly, creating regional workforce shortages that immigrant workers will answer despite government limits on migration, says a labor market researcher.

The retirement of the baby boom generation—born from 1946 to 1961—from the workforce, and a lack of Generation Y workers—born from 1976 to 1991—to replace them have already resulted in the contraction of Japan’s labor pool, with Australia, Canada, China, New Zealand, the United Kingdom, the United States, much of Western Europe and other nations expected to have much diminished labor pools within 10 years, says a KPMG study—The Global Skills Convergence: Issues and Ideas for the Management of an International Workforce—written by Bernard Salt, a researcher and partner with KPMG in Australia.

Increasing globalization, combined with the effects of what is being called the “demographic fault line,” will create labor challenges for multinational corporations unprepared for the change, Salt said in a press release. Labor shortages will create a “global skills convergence”—a flow of skilled and unskilled workers migrating between the developed and developing worlds as geopolitical barriers continue to diminish—and companies should prepare to manage their workforces in that new reality, he said.

In addition, despite efforts by governments to limit and control the cross-border flow of immigrant labor, migrant workers will find ways to circumnavigate government barriers, Salt told SHRM Online. The global economy is creating a series of “high spots,” where there is a sufficient labor pool, and “low spots,” where the labor pool is deficient, he said.

“Government regulations will not stop the flow of talent, so expect workers to bypass the retaining walls of regulations by following the paths of least resistance to gain access to a low spot,” he said.

A reverse flow of immigrant workers from Western Europe to Eastern Europe is occurring as economic opportunities are created in the former Soviet states, Salt said. Poland joined the European Union in 2004, and in 2006 about 50,000 Poles immigrated to the United Kingdom in search of work, he said. However, thousands of those Polish immigrants are returning to their home country because economic opportunities that were not present before they left their country have appeared, he said. As economic opportunities continue to grow in Eastern Europe, the potential for the back-flow of immigrant workers can create problems for companies dependent on that labor, he added.

To increase the chances of having a sufficient workforce, multinational corporations should begin preparing for the changing labor environment by establishing leadership groups, exposing staff to international cultures and drawing on local staff to manage country offices, Salt said. Such steps have proven to be effective strategies in easing the transition in labor availability experienced by several global corporations, he added.

J.J. Smith is an online editor/manager for SHRM.

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