Upcoming Workforce Challenges: Skills and Age Waves Approach, Warns McKinsey Panel

McKinsey Executives Warn of Impending “Skills” and “Silver” Tsunamis
McKinsey executives have highlighted the approach of two significant challenges for the workforce: a “skills tsunami” and a “silver tsunami.” During a recent media day, Anu Madgavkar, a senior partner at McKinsey, drew attention to the current labor market imbalance, noting a shift from 2010’s 12 million unemployed surplus to today’s 2.5 million more job vacancies than seekers. This imbalance is exacerbated by rapid advancements in AI, leading to a dramatic need for updated worker skills, termed as the “skills tsunami.” Additionally, the “silver tsunami” refers to the impending retirement of millions of older workers, which threatens to erode institutional knowledge and experience.
To navigate these challenges, McKinsey emphasizes the importance of agility in employee support and internal mobility to foster skill development. Performance management and productivity growth are identified as key to successfully adapting to these changes. Kweilin Ellingrud, a director at the McKinsey Global Institute, highlighted the sixfold increase in median productivity since 2000, underscoring the positive global narrative around productivity.
The role of AI is also significant, with McKinsey’s research showing a doubling in the regular use of generative AI by companies in just 10 months. The widespread adoption of AI is expected to bring substantial changes across industries.
American businesses are considering “relayering” their workforce to address these shifts, which may involve redefining middle manager roles to better leverage their value and potentially reducing their numbers.
Persistent talent shortages, particularly in tech and skilled trades, pose additional challenges, with a mismatch in worker skills costing U.S. companies an estimated $5 billion. McKinsey’s insights suggest that companies must adapt quickly to these evolving dynamics to remain competitive and successful.