Executive Briefings

The Most Valuable Resource - People - Is Declining Globally

Analyst Insight: The most important resource for the supply chain moving forward is people. However, the outlook is grim. The world's labor supply is shrinking, which has huge implications at a macro level on GDP and economic growth and at a business level in terms of available talent. The world labor supply hit an inflection point in 2012, when the proportion of nonworking age population "growth" became greater than the working age population. – John Johnson, senior content specialist, Gartner

The Most Valuable Resource - People - Is Declining Globally

In the years ahead, the future labor supply will shift to undeveloped regions of the world that are less educated and less technically skilled. Planning for this talent shift will be essential for the future supply chain.

Southern Asia and sub-Saharan Africa are the only regions in the world where the trend is opposite. In fact, it's estimated that by 2035 the number of workers joining the working-age population from these regions will exceed the rest of the world combined.

This means that the majority of available future labor will come from less developed nations with less education, resulting in lower technical skills.

Talent planning for the future supply chain must include programs to address the shortage of talent, as well as the shift in geographical location of labor. In the future, social and technical sciences will converge to ensure that limited resources are maximized. Three areas are emerging that will impact how the supply chain operates in 2025: talent science, social knowledge networks, and the augmented workforce.

Talent science is an emerging area where companies apply advanced analytics to identify attributes of the most successful employees. The process should become mainstream by 2025. This data can be used to drive training programs and to predict success when hiring. Statistical models, such as for flight risk, are already embedded in packaged human capital management applications. In 2013, HP estimated its flight risk indicator applied to 330,000 employees would save approximately $300m.

Social knowledge networks will become integral to how workers interact in 2025. External social knowledge networks (such as Wikipedia, Facebook and Instagram) are booming today as a source for accessing and sharing information, but solutions deployed for use within businesses have yet to catch on. Roughly 10,000 baby boomers a day are retiring along with much of the supply chain's "tribal knowledge." Taking their place are millennials accustomed to the information access and social networking that's available outside the office and they expect the same capabilities in the workplace.

By 2025, humans and machines will coexist, resulting in an augmented workforce where machines enhance worker knowledge and decisions. For example, augmented reality exists today where service technicians can visualize a repair operation in the field. This has huge benefits for global service operations unable to deploy talented resources to every location of a piece of equipment. Humans may struggle to determine their role versus the machine, leading to a significant change management challenge. Supply chain executives should prepare now for a world where roles start to blend and boundaries are much less clear.

The Outlook

Recruitment, retention and development are challenges for most supply chains. For millennial recruits, it’s even harder. Retention, generational impatience, and integrating their communications styles are all challenging. In addition, supply-chain leaders find it difficult to recruit against the likes of Apple, Google and Facebook, especially in the hot field of data analytics. Therefore, establish a strong brand for your supply chain with key schools. Develop deeper relationships — including internships and labs/projects with students.

In the years ahead, the future labor supply will shift to undeveloped regions of the world that are less educated and less technically skilled. Planning for this talent shift will be essential for the future supply chain.

Southern Asia and sub-Saharan Africa are the only regions in the world where the trend is opposite. In fact, it's estimated that by 2035 the number of workers joining the working-age population from these regions will exceed the rest of the world combined.

This means that the majority of available future labor will come from less developed nations with less education, resulting in lower technical skills.

Talent planning for the future supply chain must include programs to address the shortage of talent, as well as the shift in geographical location of labor. In the future, social and technical sciences will converge to ensure that limited resources are maximized. Three areas are emerging that will impact how the supply chain operates in 2025: talent science, social knowledge networks, and the augmented workforce.

Talent science is an emerging area where companies apply advanced analytics to identify attributes of the most successful employees. The process should become mainstream by 2025. This data can be used to drive training programs and to predict success when hiring. Statistical models, such as for flight risk, are already embedded in packaged human capital management applications. In 2013, HP estimated its flight risk indicator applied to 330,000 employees would save approximately $300m.

Social knowledge networks will become integral to how workers interact in 2025. External social knowledge networks (such as Wikipedia, Facebook and Instagram) are booming today as a source for accessing and sharing information, but solutions deployed for use within businesses have yet to catch on. Roughly 10,000 baby boomers a day are retiring along with much of the supply chain's "tribal knowledge." Taking their place are millennials accustomed to the information access and social networking that's available outside the office and they expect the same capabilities in the workplace.

By 2025, humans and machines will coexist, resulting in an augmented workforce where machines enhance worker knowledge and decisions. For example, augmented reality exists today where service technicians can visualize a repair operation in the field. This has huge benefits for global service operations unable to deploy talented resources to every location of a piece of equipment. Humans may struggle to determine their role versus the machine, leading to a significant change management challenge. Supply chain executives should prepare now for a world where roles start to blend and boundaries are much less clear.

The Outlook

Recruitment, retention and development are challenges for most supply chains. For millennial recruits, it’s even harder. Retention, generational impatience, and integrating their communications styles are all challenging. In addition, supply-chain leaders find it difficult to recruit against the likes of Apple, Google and Facebook, especially in the hot field of data analytics. Therefore, establish a strong brand for your supply chain with key schools. Develop deeper relationships — including internships and labs/projects with students.

The Most Valuable Resource - People - Is Declining Globally