For more than a decade, business leaders have
been aware of the growing war for talent, and many
companies have tried to address the problem largely
through expensive investments in human resources
systems and processes. A January 2008 article in
The McKinsey Quarterly says these efforts,
while necessary, have been "insufficient at best,
superficial and wasteful at worst."
Talent shortages, executives in particular, have
worsened over the past decade. The problem,
McKinsey researchers say, is that too many
companies fail to see talent management as integral
to their long-term business strategy, but rather see it
as "a short-term, tactical problem."
As in recent years, the ongoing talent shortage is
among the top 10 recruiting / employment trends for
2008, as cited in newspapers, online job boards, and
leading business publications. Interestingly, this trend
is also being reported in the United Kingdom,
Australia, New Zealand, and many European
countries.
The McKinsey article discusses both external and
internal challenges. External challenges come from
globalization and the peculiar demands of managing
both the rising number of knowledge workers and the
so-called millennials or GenY (people born after
1980) workers.
Expanding into international markets poses
different challenges for companies. Executives must
be willing and able to work abroad, and they need to
recruit local talent in emerging markets who
understand how to conduct business in those regions
and who have appropriate educational qualifications
and English-language, leadership, and teamwork
skills.
Millennials change jobs frequently and value work-
life balance, flexibility, and meaningful work far more
than did prior generations of workers. As a result,
retention of these workers is problematic.
As for internal challenges, "short-termism"
prevails, wherein executives and managers trade
short-term performance for long-term strategy. One
example cited is when managers cut expenses to
raise short-term earnings by letting people go, cutting
investments in people development, or both.
For companies that do see talent management as
a priority, they focus more on HRIS and HR
processes. Adding to the problem is that many
executives feel HR professionals lack critical
business strategy capabilities. McKinsey's research
shows that "58 percent of all line managers believe
that the HR function lacks the wherewithal to develop
talent strategies in line with a company's business
objectives, though only 25 percent of the HR
professionals" agreed.
Companies must truly believe their employees
are their "biggest source of competitive advantage,"
but that belief must start at the top and be inculcated
throughout the organization. Another important step is
to boost the credibility and capability of HR
professionals. One way some organizations are
accomplishing this is by having aspiring HR
managers take positions outside of HR, such as
sales, manufacturing, or finance. In this way, HR
professionals build their capability and boost their
credibility.
Another important recruitment tool is creating
multiple employee value propositions, says McKinsey.
This trend is being seen both here and abroad. In a
January 2008 press release, Hays, a recruiting firm in
New Zealand, refers to this strategy as "unique
candidate attraction." Companies must consider the
needs of employees from different demographics.
Companies must be able to communicate a clear
message of why someone would want to work for
their company rather than for another. Effective
candidate attraction messages will differ by the
person's age, gender, cultural background, and so
forth.
America's future competitiveness and ability to
innovate rests largely on companies being successful
in recruiting, developing, and retaining creative, cutting-
edge talent. At the 2007 annual meeting of the Council
on Competitiveness reported, "the forces of
globalization are changing the rules of the game....
Increasingly, the United States competes and
cooperates in a world in which the power of networked
communications, the extended global supply chain
and access to talent has internationalized operations
and job markets." Individuals must constantly upgrade
their skills to capitalize on technological change,
scientific discovery, and market opportunity.
Companies and world-class educational institutions
play important roles in making this happen. (Sources:
The McKinsey Quarterly, January 2008; "Five for
the Future," October 2007, Council on
Competitiveness; "Avoid the Tug-of-War: Hot Issues
for 2008"; Hays)
