Fusing Labour and Technology for Growth


Friday, December 09, 2016 8:59 AM / fdc 

Between 30% and 50% of the world’s working-age population are unemployed, inactive in the workforce or working only part-time. Yet, the percentage of employers that say that they can’t fill positions are about 63% in Brazil, 40% in the US, 40% in Germany and 24% in China. Connecting the increasing world labour force to employment opportunities is critical in ensuring sustainable economic growth, productivity and better living standards. The development of online talent platforms plays an instrumental role in providing these connections.

Online talent platforms are marketplaces and tools that can connect individuals to the right work opportunities.8 They take the form of websites, mobile apps, or proprietary corporate systems, and they have been helpful in closing the information gap that previously pre-vented talented individuals from finding the right openings.  

According to the McKinsey Global Institute report, A labour market that works: Connecting talent with opportunity in the digital age online talent platforms could be classified into three categories:

1.       Those that matched individuals with traditional jobs such as Glassdoor, Indeed, Linkedin and Monster

2.      Online market places for contingent work such as Uber and Upwork

3.      Platforms for talent management such as Good.co and Pay- Scale  

The report estimates that by 2025, online talent platforms could add $2.7 trillion dollars (or 2%) to global gross domestic product (GDP) and increase employment by 72 million full-time-equivalent posi-tions.9 These impressive numbers are driven by the concentration of easily accessible jobs and training information that span a multitude of sectors, employment types and geographic locations. As a result, online talent platforms can increase labour force participation by facilitating unengaged youth and adults to find employment, even if just for a few hours a week. They can accelerate the hiring process via effective search capabilities and advanced screening algorithms.  

They can reduce the time individuals spend searching for jobs and they can widen the search to include non-local positions. When used in combination these benefits can result in increased labour productivity and job satisfaction; the more efficient search and screening used by both employer and prospect help place the right people in the right jobs, thereby raising output per worker. The potential global GDP increase due to higher participation, reduced unemployment and higher productivity are 0.9%, 0.6% and 0.5%, respectively. 

However, the greatest potential of online talent platforms to raise GDP is in countries that have persistently high levels of unemployment and low labour force participation, such as South Africa, Greece, Spain and Nigeria.  

One way these online platforms benefit emerging economies is by aiding the movement of people from informal to formal employment. A significant proportion of the labour force in emerging economies works in enterprises that operate outside the view of regulators or tax authorities, or are self-employed in micro businesses. These workers are engaged in legitimate business activities but fail to fully comply with all the tax, labour market and product regulations. In particular, individuals who work on their own providing goods and services (such as domestic workers, skilled tradesmen and others paid on a cash basis), do not report their income to the tax authorities.  

Online talent platforms can bring these individuals up from the under-the-table and guide them towards better opportunities and increased productivity by matching workers with permanent employment or contingent work through digital marketplaces. Good examples of these platforms include Task Rabbit and Handy, which bring services such as dog walking, lawn mowing, and house cleaning (these activities usually skew towards informality) to the formal sector. Given that payments are made digitally through most of these online platforms, the incomes of the individual workers can then be aggregated and reported to the tax authorities. Small businesses can also benefit from using these platforms. They can increase output by up to 9% and reduce costs related to talent and human resources by as much as 7%. 

Another benefit of online talent platforms to emerging economies is through online training. It is projected that up to 540 million individuals will benefit from online training platforms by 2025. A good example is an aspiring IT professional who is confused about which IT career path to follow and what qualifications are required. Having access to the professional data (such as work his-tory and education or training acquired) of experienced professionals, and online courses – that are often free – can help a green professional make better decisions regarding their career trajectory.  

Many of these platforms even provide opportunities for people to meet and develop a mentoring relationship. The data from the online platforms (including survey, industry, company-level and educational data) can harness insights into the demand for skills and occupations as well as the career outcomes of particular educational institutions and programs. Mckinsey’s study gave the example of how New York city’s officials turned to LinkedIn for insight when it wanted to promote startups and technology jobs. LinkedIn provided a map of job openings and talent that showed a local shortage of workers with mastery of specific programming languages.  

Can Nigeria use these insights in building its labour force?

With a population of over 180 million people that is quite youthful, Nigeria has the potential to develop a workforce ready for the challenges of a dynamic business world. Yet, for Nigeria’s work-force to meet its potential, an adequate strategy must be in place. The Mckinsey study revealed that Nigeria could add $20 billion to its annual GDP through the right adoption of online talent platforms. Besides LinkedIn, the largest platform, there are local online talent platforms including Jobberman, Jobzilla and Talent-base that connect individuals to work and human resource activities. Despite the relative success and popularity of some of these platforms, the quality of jobs posted and the reliability of information remain an issue.  

Certain factors need to be in place before Nigeria can benefit from the potential of online talent platforms. Increased investment is required in education, infrastructure and IT. Despite the high un-employment and underemployment rate in the country, a good number of employers still lament the lack of local talent to spear-head key divisions of their businesses. A major problem plaguing the Nigerian workforce is a poor educational foundation making it difficult to acquire high-level skills and think critically.  

Combine this with a system that breeds corruption, and it becomes difficult to develop a productive workforce. A reorientation focused on skill development and ethical behavior should be administered across all educational levels, especially to Nigeria’s youth. Also, the government has to invest heavily or encourage investment in broad-band technology. Furthermore, artisans and technicians should be sensitized about the opportunities these platforms present. With the informal sector accounting for 90% of the jobs in Nigeria, it is imperative that participants in the informal sector become connected through online talent platforms. 

Finally, Nigerian human resources departments need to ensure that that they know employment trends and the capabilities of online platforms to attract and keep talented individuals. For Nigeria’s HR sector to add value, it has to be proactive by ensuring that employees keep up with the evolving knowledge-based business landscape. HR managers should develop a prescient under-standing of the skill and educational requirement of the work-force. Online platforms, through their ability to provide insights on career and job trends, can provide Nigerian HR managers with this foresight. Though the future of the economy and survival of many companies depend on a cocktail of factors, online talent platforms have the potential to promote skill acquisition and higher economic activities. 

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