‘The demand for skilled workers will exceed supply’
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The global labour market does not seem to be future-ready. No one has the crystal ball to tell the future exactly, but it can be safely said that the skills needed in 2030 will be quite different from what we have today. This is a challenge for the entire world — and an opportunity for India.
A recent FICCI-KPMG study, ‘Global Mobility of Indian Workforce’, has estimated that by 2030, the demand for skilled workers will exceed supply, leading to a talent shortage of over 85.2 million people. “This global skills shortage could result in estimated $8.45 trillion in unrealised annual revenue by 2030 — equivalent to the combined GDPs of Germany and Japan,” the study says. For India, the challenge, and the opportunity, is to grab as large a slice of the 8.45 trillion pie as soon as possible.
Addressing this challenge requires targeted strategies, international cooperation and proactive policy interventions to optimise workforce mobility and economic productivity. At the national level, the need of the hour is a properly coordinated effort among government, the private sector and other stakeholders.
Geographic regions and their demands
The Gulf Cooperation Council (GCC), Europe (including the United Kingdom) and Australia emerge as three key geographies where workforce mobility will be critical. The talent shortage will neither be uniform across all regions nor follow similar patterns. Each of these regions faces specific workforce demands. However, health care will be a common requirement across all three regions, with aging populations and increasing health-care needs driving demand. In general, services will be prevalent in the three geographies. Manufacturing and construction are pivotal for the GCC and Australia, while Europe, being the oldest post-industrial society, will require more service-sector workers. Besides, there are emerging sectors. As in the study, ‘Across all these sectors, there is growing demand towards skills pertaining to automation, AI [Artificial Intelligence], big data, predictive analytics, IoT (internet of things), blockchain, management, resource efficiency and sustainability.’
Existing barriers and strategies
There are several barriers that obstruct the efficient movement of skilled workers across borders. Some of these are regulatory and immigration barriers (complex visa processes and stringent work permit regulations hinder skilled migration) and recruitment malpractices and trafficking (exploitative recruitment practices and human trafficking that pose serious threats to migrant workers’ safety and rights). In his recent visit to the United States, Prime Minister Narendra Modi highlighted this menace and underlined the need to fight it. Other obstructions include policy barriers and skill mismatches (many Indian degrees, particularly in medicine, are not recognised everywhere in Europe, leading to underemployment or unemployment of qualified professionals) and language and cultural barriers (integration challenges, including language proficiency and cultural adaptation, affect workforce efficiency and productivity).
The Government of India has initiated various programmes to address the challenges. These include Bilateral Agreements and Free Trade Agreements (FTAs) — India has several agreements with the GCC nations to protect the rights of Indian workers. For instance, the Joint India-United Arab Emirates Vision recognises the importance of skill cooperation between the two nations. Some other notable initiatives are skill development programmes to align workers’ skills with global market needs and digital platforms for workforce support, where online recruitment systems are focused on ensuring legal protections for workers and shielding them from fraudsters, particularly in GCC countries.
To capitalise on the global demand for skilled labour, several strategic measures should be prioritised which include sector-specific skill training (workforce training should be aligned with the needs of target geographies and preparation must be made for emerging sectors); regulation of recruitment practices (authorities must implement stricter oversight on recruitment agencies to prevent exploitation and trafficking); recognition of qualifications (international collaborations must focus on mutual recognition of academic and professional qualifications to ease workforce integration); incentivising public-private partnerships (governments at the Centre and in the States should encourage private sector involvement in training programmes and global employment facilitation) and promoting circular migration and mobility (temporary work visas and rotational workforce models can address labour shortages without causing demographic imbalances).
The political climate regarding immigration policies is ever-changing. While Europe may tighten its regulations, Australia remains more open to skilled migration. In the FICCI-KPMG study, the Indian diaspora is the second largest and fastest growing diaspora in Australia.
India’s advantage
At any rate, strict immigration policies mainly target illegal migration. India must remain resilient in its efforts to position its skilled workforce globally, undeterred by shifting political rhetoric. A major advantage for Indian workers is the absence of significant hostility towards them, and towards India, in most global markets. Even in countries with growing anti-immigration sentiments, skilled Indian workers continue to find opportunities. However, to maintain and enhance this position, the Indian government must take measures to curb illegal migration. Preventing illegal immigration will not only protect Indian workers from exploitative agents but also enhance India’s global reputation as a reliable supplier of skilled labour.
This will also help us realise the dream of becoming Viksit Bharat. The Chairman of the Sixteenth Finance Commission, Arvind Panagariya, recently projected that India’s GDP could reach between $6.5 trillion and $9 trillion by 2030. India’s ability to move closer to the $9-trillion mark will be directly linked to how much of the estimated $8.45 trillion in unrealised global economic potential it can tap into.
Jyoti Vij is Director General, the Federation of Indian Chambers of Commerce and Industry (FICCI)
Published – February 24, 2025 12:08 am IST