The New (World) War For Talent
by Steve Bluen [Professor, Gordon Institute for Business Science (GIBS)]
In 1998, McKinsey coined the phrase “War for Talent,” when they pointed to the ever widening supply and demand gap of executives in Corporate America. They attributed the cause of this talent shortage to factors such as female employment levels plateauing, fewer immigrants entering the workforce, executives opting not to prolong their careers, increased job mobility and corporates facing stiff competition for executive talent from small and medium sized businesses. Furthermore, the fact that the number of young people entering the job market has decreased by a third since 1970 and that the imminent retirement of the Baby Boomers will mean that, by 2020, the USA will need to find 10 million new workers to replace them, further exacerbates the talent crisis.
It is not hard to see why, then, for the next decade, the HR world was fixated with the war for talent. But in 2007, the Great Recession struck and unemployment rocketed to 15 million in the USA. While South Africa was shielded from some of the more overwhelming effects of the crisis, we were far from immune. Indeed, over a million local jobs were lost since the beginning of 2009. Jobs, rather than talent, became the corporate rallying cry as jobs were shed across the world and the recession continued for a devastating 18 months - 2 months longer than the Great Depression.
The question is: Is the war for talent truly dead? The answer is – categorically not. According to Deloitte’s (2010) Talent edge 2020: Blueprints for the New Normal, all that has happened is that the war for talent has morphed into competing for the right talent in the right places at the right time. Attracting, retaining and developing talent has become that much more sophisticated and complex: Ongoing unemployment is accompanied by a shortage of specific skills; the workforce is far more diverse in terms of age, generation, race, gender and nationality, rendering obsolete the “one size fits all” approach to an employment value proposition; when it comes to scarce skills, it is decidedly a sellers’ market: Employers are needing to become increasingly innovative when rewarding their people and keeping them stimulated and engaged in their businesses; and the use of technology in talent management has burgeoned.
The talent challenge is greatly complicated when corporates extend their horizons beyond South Africa’s borders in an attempt to go global. These multinational businesses need a new breed of executives that can handle the complexities of operating in exotic, dynamic markets. The talent search brings a new meaning to diversity as hitherto untapped talent pools are uncovered across the world. Accenture (2011), in their War for Talent, point out that, by 2050, 97% of the 438 million people joining the global workforce will come from developing countries. The transformation is amazing: The workforce in developed countries will have shrunk by 11 million, while emerging economies will have grown by 1.7 billion people. Retaining talent will become increasingly more challenging as executives enjoy a far wider range of global jobs to choose from, which become totally accessible as the use of technology in talent search increases. Furthermore, choosing not to go the global route does not guarantee local companies immunity from global talent raids. The increasing number of global giants emanating from dynamic market countries means that those companies will be competing with local companies for South African talent and offering them alluring work opportunities in far flung, exotic locations – along with the handsome pay packages typically earned by expatriates!
So it is not hard to see that talent management has been placed firmly on the strategic corporate agenda. Indeed, in PWC’s 2011 14th Annual CEO Survey, they note that managing talent is THE number 1 item on the CEO’s agenda. How can South African companies triumph in the “new normal” war for talent? One of the most tangible and obvious ways of succeeding is to strive to become an employer of choice – that, no matter what the competition from local or global companies, your organisation remains an employer of choice, where the employment value proposition is the most desirable, by any measure. In this way, you stand the best chance of attracting, developing and retaining a disproportionate number of high caliber people that will make your company great.