Migration Matters: A Human Cause with a $20 Trillion Business Case

This BCG report, developed in collaboration with the International Organization for Migration (IOM) , offers winning strategies, actionable advice, and examples of best practices.

Affected by the ongoing pandemic, accelerating climate change, and geopolitical and economic destabilizers, millions of people have moved across borders since the start of 2022. While cross-border migration currently generates an annual economic output of around $9 trillion, this figure could more than double by 2050, to around $20 trillion a year, according to a report from BCG, in collaboration with the IOM.

The report outlines the economic case for migration and highlights more than 20 actions across three key strategies that companies can deploy to employ, elevate, and embrace migrants in the workplace.

Today, more than 280 million people—3.6% of the global population—live in countries other than where they were born. ¹ 1 UN DESA, International Migrant Stock 2020; see also IOM World Migration Report 2022, Key Findings, Chapter 2. Taken together, migrants globally would form the fourth-largest country in the world by population size. Moreover, more people are open to migrating if given the opportunity; over 50% of workers are willing to take up jobs abroad, according to a recent BCG survey . ² 2 BCG Decoding Digital Talent. Survey of 208,807 workers in 190 countries.

In addition, in developed countries with aging populations, the political desire and fiscal necessity to keep dependency ratios stable could lead to even higher levels of migration. ³ 3 UN World Population Report 2022.

Migration is not only essential for future economic welfare but also presents a substantial opportunity. Business is currently suffering from unprecedented labor shortages across skill levels, especially in industries such as digital technology, health care, education, trade, and construction. According to a BCG study of 30 countries, above-average labor shortages today cost business more than $1 trillion a year. That’s over $3 billion a day—or more than 1% of global economic output. ⁴ 4 BCG analysis, August 2022; data sources: Eurostat, Trading Economics, LinkedIn. (See the exhibit.) In addition to alleviating such pressing labor shortages, foreign talent can drive innovation ⁵ 5 Alberto Alesina & Johann Harnoss & Hillel Rapoport, 2016. "Birthplace diversity and economic prosperity,"
Journal of Economic Growth, Springer, vol. 21(2), pages 101-138, June. and thus provides companies that embrace it with a substantial strategic advantage.

Even though the economic case is clear, business has yet to move. According to a recent BCG survey covering 850 executives in ten countries, 95% of private-sector leaders see the value of working with global talent, and 80% take some actions to capture that value; however, only 5% of them do so in a consistent manner that yields financial impact. To address this apparent gap between aspiration and action, this Brief shares more than 20 operational levers, illustrated with best practices from global corporations, which allow companies to benefit from migration and protect the rights of migrants. To do so, business can, and must, deploy three strategies to employ, elevate, and embrace migrants in the workplace and beyond:

1. Develop a global talent strategy. A common starting point is to employ foreign-born workers to staff hard-to-fill roles or cover short-term needs. Businesses can access fresh pools of talent by adopting new language norms, globalizing their hiring, using new recruitment platforms to discover overlooked talent, and allowing for more remote operations.

2. Deploy a global innovation strategy. This strategy drives value by harnessing the cognitive variety of globally diverse teams that are often more creative when solving complex innovation challenges. Companies can adopt this strategy by creating migration networks within their organizations, setting up externship programs, and championing differences to spark creativity that, when supported by the right operational levers, will boost and elevate innovation.

3. Stand for global human rights. Migration needs corporate allies that will embrace and protect migrants’ rights before, during, and after migration while ensuring business practices are aligned with international labor standards. To improve policymaking, business leaders should participate in forums and share the benefits, opportunities, and challenges of global migration. They can lead by expressing their support for the principles outlined in the UN Global Compact for Safe, Orderly, and Regular Migration, and by partnering with governments and civil-society organizations to establish secure and dignified migration paths. Business engagement strengthens the governance structures that protect and safeguard the rights of migrants, and is vital to develop more sustainable and legal migration pathways.

It still remains difficult and risky for people to move across borders, even though public sentiment on migration has turned somewhat more positive in recent years, ⁶ 6 BCG sentiment analysis with Quid. and many governments slowly move toward relaxing visa restrictions, starting with those for the most educated workers. ⁷ 7 “ Building a Globally Diverse Team Is Actually Getting Easier.” To improve policymaking, business leaders should participate in migration forums and socialize the benefits, opportunities, and challenges of global migration. Additionally, business should join—or form—industry-specific groups to better forecast international hiring demand, share best practices on how to meet it, and advocate for policies that will help companies access the global talent they need.

Companies that act today can gain a sizeable competitive advantage tomorrow. Those that have embraced globally mobile talent, not only in their workforces but also in their leadership, have seen greater profitability and faster innovation. A BCG analysis of more than 3,000 publicly listed companies shows that companies with greater global diversity generate 2.2 percentage-point higher profits (in terms of EBIT ⁸ 8 Earnings before interest and taxes. margin) and are 75% more likely to be world-class innovators. ⁹ 9 BCG analysis of the largest 2,000 publicly listed companies in any given year, 2012-2022, July 2022. N = 3,325.

Shifting demographics, the climate crisis, and geopolitics, among other factors, are accelerating the global movement of people, and they will continue to do so in the future. Fortunately, migration can not only help alleviate some of those challenges, it also represents an opportunity for business to thrive in the face of adversity. There are trillions of dollars, billions of lives, and countless innovations at stake. It is time for business leaders to put global migration on their strategic agenda and take a stand for migrant rights.