Europe, including Hungary, will face the potential of a dire skills shortage by 2050; 35% of core skills will have changed within three years, and Hungary itself will only create 50,000 new jobs between now and 2025, according to Annemarie Muntz, one of the most influential voices in the labor industry.
Muntz is president of the World Employment Confederation, and Director of Randstad Holding Public Affairs, and was speaking in Budapest on April 26 at a business breakfast organized by the Business Council for Sustainable Development in Hungary (BCSDH), whose 80 member companies contribute 30% of Hungary’s GDP.
Her presentation was entitled The Future of Work, and looked both at broader European and specific Hungarian issues. A core part of the message was what employers will have to do to attract and retain workforce, how company brands will become increasingly important. And she used an old-fashioned word to describe what lies at its heart: Decency. “You cannot attract the right people unless you have decent company relations,” she said.
It was the numbers, based on research by organizations like WEC and surveys by companies like Randstad, that were truly eye-catching, though. “Thirty-five percent of core skills will have changed between now and 2020. That’s just three years’ time,” she said.
The changes are being brought about by the introduction of so-called disruptive technologies. She gave financial services as a prime example, noting that insiders “say in two or three years the whole payment system will be different. That’s a lot of disruption. I can remember when we paid for things in cash; that seems a long time ago now,” she joked.
“In the European Union, 35 million new high-skilled workers are needed in the coming years as a result of expansion and aging.” Many of those jobs require so-called soft skills: Complex problem solving; critical thinking; creativity; people management; coordinating with others; emotional intelligence; judgment and decision making; service orientation; negotiation; and cognitive flexibility
Muntz said universities are very good at turning out graduates with hard skills, but employers will either have to help tertiary education develop soft skills in the future workforce, or do it themselves after hiring. One other point; these are the most important skills for the next generation of workers to learn, because they are the hardest for computers and AI to replicate. Routine work demands repetitive skills that are easily automated in a way that soft skills, at least right now, cannot be. “They make the difference between tech and touch.”
Filling those jobs will require different thinking, Muntz said. It is not so much that there is a global skills shortage, but a global skills mismatch, and demographics also plays a role. The workers are there, just not on our doorstep. “In Europe, we need to become more attractive; we need to get more people here because of the ageing population. We need high-skilled migration.”
She was very deliberate in her choice of language. “I am not talking about refugees; the refugee issue is a problem we need to solve, but that is completely different; we need to put in place a framework to attract high-skilled labor migration.”
Such migrants want a high wage, what Muntz called an “Anglo-Saxon environment” (they want to be able to speak English and not learn another language) and low tax rates. They are not much interested in social security, minimum wages or union representation. Thus, the business world needs to be engaged with lawmakers to ensure the right kind of attractive framework is put in place. “If government does not come to you, you need to do business advocacy.”
Hungary suffers from the same demographic problems as almost all the rest of Europe. “The working-age population is forecast to fall by about 1-2% between now and 2025,” Muntz said. The elderly (65+) population will also grow by about 20%. She did, however, note that the country still has a sizeable proportion of people in the 44-55 age range, meaning that, in the very short-term, the worst of the problems will not hit home here; but they are on the way. “In the coming 15 years, you will have still an enormous shortage of people.”
Looking at Hungary’s job creation chances, she raised question marks over the future. “The growth of employment is very modest,” she said. “Up to 2025, 50,000 new jobs are going to be created; that’s not that large an amount.”
Hungary has put a lot of store in creating manufacturing jobs, but for the future, Muntz says it is business services and public (government) services where by far most jobs will be created: agriculture, manufacturing and to a lesser extent construction and transport are all going to see more automation, and therefore less job growth.
Her conclusions were equally applicable to the European and Hungarian pictures. “The Future of Work will lead us into a service-oriented economy, creating jobs that currently do not exist, but that are non-routine based; it is impacted by demographic change that is driven by an ageing society, resulting in the need of 35 million high-skilled workers in Europe by 2050; needs active labor market policies to ensure that untapped potential can contribute to higher participation rates, leading to an inclusive and sustainable labor market; welcomes well-regulated migration to contribute to an competitive and agile economy; and provides opportunities for employer branding which will become increasingly important in the war for talent.”