Shock report: Shrinking labour markets

  • Reading time:5 mins read

Your corporate brandAre your corporate brand and Employee Value Proposition strong enough to win the war for talent? Worker shortages will be the new normal. Not overnight but over the coming decades.

And worker shortage has now become one of five Mega Trends together with climate change, tech transformation, geopolitical shifts, and urbanisation.

The law of Supply and Demand

In conference calls over the past three to six months with my NPAworldwide colleagues in Australia, Europe and USA, the reports are all about the extremely high demand for talent but sadly with a supply that is not enough.

Easy To Find – But Difficult To Hire

Tom Sorensen, Headhunter

You know what happens when the queue is too long, right? The law of supply and demand dictates that a low supply drives up the prices. In employment terms, that means the following:

  • The overall question, can you answer the question from the candidate: Why shall I come and work for you?
  • In a sellers’ market (read: candidates) it will be more and more difficult to find the right people to hire.
  • More importantly, you need someone to help you present your job opportunity, someone who can influence and nurture the best potential out there.
  • It becomes a market where the candidates can choose the best offers.
  • Do you know how to manage counteroffers before your preferred candidate accepts to stay in the current job and company?
  • It will be a scenario where only some companies become Employer of Choice.
  • Job hopping is likely something we must live with and learn how to take advantage of.
  • You need a plan on how to brand your company and not just your products and services.
  • The word is EVP, employee value proposition. In Sales & Marketing, we call it USP (unique selling points). Do you have one?
  • Don’t sit on your hands? Instead of using your hands to help yourself and your company, you merely sit on them — you choose to take no action. Is that you?

The World Bank has this to say

ReportThe World Bank reported in 2021 that Thailand’s labour market is 38 million people. That number comes from 67% of the working-age population counted as all people between the age of 15 and 64.

  • Thailand’s labour market faces several challenges including a declining labour force participation, slow shift of jobs out of agriculture, and high rates of informality.
  • These challenges are complicated by an ageing population, which is occurring quickly in Thailand.
  • Agriculture still employs about 33% of all workers in Thailand compared to 23% of employment in the Philippines, 10% in Malaysia, and 5% in the Republic of Korea.
  • Thailand’s projected demographic changes will lead to a reduction in the overall labour force of 14.4 million people between 2020 and 2060.

Source: The World Bank. [LINK]

Blame the fertility rates already low and dropping

Who to blameIf a country’s fertility rate and replacement level (the average of children a woman has in her lifetime) is 2.1, then the country’s population will remain level.

If a woman has more than 2.1 “child” the population will grow. If less, the population eventually falls.

Most of Southeast Asia is already below replacement level (2.1) with Thailand 1.5 children per woman.

  • Bangladesh 1.9
  • China 1.3
  • India 2.0
  • Indonesia 2.2
  • Myanmar 2.15
  • South Korea 0.86
  • Sri Lanka 2.15
  • Vietnam 2.0.

Source: Bangkok Post, Commentary by Gwynne Dyer. [LINK]

Tom Sorensen

Tom Sorensen is an executive search veteran with over 25 years of experience recruiting in Asia, Europe, and Africa. He has worked in executive search in Thailand since 2003 and is recognized as one of the country’s top recruiters and most profiled headhunters.