The global economy has seen labour market pressures ease slightly since 2016 as the number of skilled and well-educated migrants grows to its highest level, according to the latest Hays Global Skills Index.

The report, ‘Regional dynamics of the global labour market: skills in demand and tomorrow’s workforce’, finds that despite the easing of labour market pressures, skill shortages remain as businesses continue to struggle to find skilled professionals in a number of specialist roles and sectors. The report is an analysis of professional employment markets across 33 global economies, assessing the dynamics at play in each local labour market.

Hays’ data shows that the flow of skilled migrants has contributed to a slight decrease in the average overall Index for this year. The score has dropped marginally from 5.4 to 5.3 this year – the first time there has been a reduction in the Overall Index score year-on-year since its start in 2012.

Meanwhile, UN data estimates that 244 million people, or 3.3% of the world’s population, are currently living in a country other than that of their birth. Index data has also showed that in the European Union in 2016, the proportion of all people born in another country who were university educated was 29% – up 3 percentage points from 2011. Hays suggests that this flow of workers appears to be counterbalancing the issue many countries face of an ageing population.

 “After a period of global uncertainty impacted last year’s Index, there are signs emerging of a more positive backdrop for businesses around the world,” Alistair Cox, Chief Executive, Hays, said. “This year there is cause for optimism as evidence in our report points to a slight easing in some of the key pressures and drivers impacting labour markets. However, despite this slight easing of pressure, skill shortages remain a persistent issue and one that requires the immediate attention of businesses, governments and educational institutes.”

“With the working age population across all countries forecast to decline by nearly a million as the workforce ages, it is vital that governments embrace skilled migration. Prosperity and growth depends on people, and without the right skills, businesses and therefore societies can flounder rather than flourish – skilled migration provides an important and necessary resolution to the global skills gap,” Cox said.

The report also finds that the proliferation of connectivity and new technology has led to more and more workers adopting flexible working patterns. In the US, over the last decade, the number of freelance, contract, temporary or on-call jobs has risen 5% to account for 15% of all workers. In Europe, freelance roles have grown four times faster than total employment in the last five years. In the Asia Pacific region, Singapore and Australia are among the biggest freelance employers, and total freelancer earnings in the Philippines, Bangladesh, India and Pakistan are among the highest in the world. Digitisation also has a role to play in helping to combat skill shortages, as it allows skilled workers to be able to work flexibly, efficiently and remotely, and there is growing demand for new roles within this evolving landscape.

“Technology and digitisation has also had a significant influence on workers, with a growing trend towards a more digital economy,” Cox said. “Businesses must engage with technology to reap the benefits rather than fear any fundamental change, helping to ensure they stay competitive - constantly innovating is essential to success.