At first, it was just a trickle. Indian call center workers become serial job hoppers, boosting their salaries 20% with every new position. Factory workers in Vietnam leave for the holidays and don't return. Computer programmers in Bulgaria don't bother to answer the want ads of a Los Angeles movie studio. But today, anecdotes of a global labor crunch have turned into a flood. Last week, staffing agency Manpower Inc. released the results of a survey of nearly 37,000 employers in 27 countries. It turns out that more than four out of 10 employers around the world are having trouble hiring the right kind of staff for the right kind of money. And the problem is getting worse.
The Global Labor Shortage: Cheap Labor R.I.P.?
At first, the flood of three billion new workers into the global marketplace for labor was a boon to employers across the globe. But cost cutting strategies, like offshoring and outsourcing work to low-wage countries, are running out of gas far sooner than many expected.
The salaries of IT workers from Central Europe to India are rising by double-digits every year. In the past five years, Hewlett-Packard (HPQ), SAP (SAP), and even Morgan Stanley (MS) have set up shop in former Communist countries of Eastern Europe. There, a deep pool of highly qualified math and science graduates were supposed to be willing to work for a third of that paid their Western counterparts.
Yet today, IT directors in Poland can cost companies more than $100,000 a year. That approaches Silicon Valley levels. And the number of highly qualified workers is surprisingly low. Multinationals have reacted swiftly, moving operations to ever lower-cost centers. Nokia, which already employs nearly 5,000 people in Hungary, recently announced that it is building a new handset factory in Romania.
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