The Great Resignation has made big news, with 4.4 million workers in the U.S. quitting their jobs in April.
“The global working-age population has peaked at 66% and is declining, per the World Bank,” Bank of America strategists wrote in a commentary.
That stems from “an aging population with reduced fertility and participation rates, compounded by a geographically concentrated workforce facing several structural skills gaps,” they said.
Europe alone will see its working-age population decline by 95 million people from 2015-2050, according to the Center for Global Development.
Demographics are driving this, the strategists said. “Baby Boomers, making up one-third of the workforce, are leaving the labor market faster than ever,” they said.
And “younger generations lack the experience and skills to close the larger gap in the talent pool.”
The global talent shortage could soar to 85 million people by 2030, according to Korn Ferry. That's more than double the estimated 40 million in 2020.
The solution: “technology!” B of A strategists said.
They list several stocks that can benefit from these labor trends, including:
· ASGN (ASGN), a temporary staffing agency;
· Fiverr (FVRR), an Israeli operator of an online job marketplace for freelancers;
· Upwork (UPWK), a U.S. operator of an online job marketplace for freelancers;
· Adecco (AHEXY) , a Swiss human resources company;
· Teleperformance (TLPFY) , a French company that’s the global leader in the customer experience market, according to BofA.
B of A’s Commentary on the Companies
ASGN: “The low U.S. unemployment rate, rising job openings, and elevated voluntary quit rates among skilled workers creates a positive demand backdrop for ASGN's staffing business,” the B of A strategists said. “IT [information technology] labor markets are especially tight, driving demand for ASGN's staffing services.”
Fiverr: “Fiverr is well geared toward millennial and Gen Z demographics,” the strategists said. “We expect the gig economy to continue to grow in the 10 to 20 years when Gen C enters the workforce.” Generation C stands for covid and includes those born starting in 2016. The strategists also sees freelance work growing after the covid pandemic.
Upwork: Those same factors will benefit Upwork, the strategists said. “The freelancing economy is perhaps one of the few that will retain the strong tailwind from the pandemic.” A 2020 Upwork study found that the freelance workforce is getting younger, with 50% of Gen Z workers, 44% of Millennials, and 30% of Gen X having freelanced.
Adecco: “Leading staffing companies like Adecco are playing an increasingly vital role, as the labor market continues to be plagued by talent shortages,” the strategists said. “With the increasing use of data analytics, Adecco is now better able to match demand with talent both for temporary and permanent roles, and to price them correctly.”
Teleperformance: Digital customer experience, such as chatbots, artificial intelligence and data analytics, is forecast to grow 10 times faster than the overall outsourced customer experience industry, B of A strategists said. Teleperformance is well-placed to capitalize on that, given its global leadership in the outsourced customer experience market, they said.
