Hiring Practices

The Global Talent Crisis
In today's complex environment, a strategy for attracting skilled people is as critical as a marketing or finance strategy
by Mark Foster
Managing
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I have heard it said that there is a war for talent—and talent has won!
In the decade since this war for talent was first declared, the definition of talent and the fronts on which the war is being fought have all grown more complex, paradoxical, turbulent, and contradictory. Talent is not just a human resources issue. It is an urgent strategic issue that business leaders need to address proactively—now.
Here's why. Corporations are experiencing seismic shifts in demographics, resulting in aging workforces but fewer, younger workers in some parts of the world and burgeoning sources of young talent in other parts; a rising demand for new skills paired with growing deficits in basic skills; more diverse, distributed, and mobile workforces; and, despite a global abundance of people, local scarcities of talent. The shortages are particularly acute for knowledge workers and managers.
Top of the Agenda
It's clear that a talent strategy is now as important as a marketing or finance strategy for corporations operating in today's multi-polar world. Of all the business issues that my Accenture (ACN) colleagues and I help our clients address, talent is among the most difficult. In fact, our latest annual survey of more than 850 C-suite executives around the world found that attracting and retaining talent falls only behind competition as the top threat to business success. (Certainly at Accenture, with global workforce of 180,000 people, talent is at the top of our strategic agenda.)
Despite years of lip service, senior executives are only now realizing that their talent strategy must entail more than just throwing money at high-performers in hopes of recruiting and retaining them. Indeed, talent must be redefined to include not just the best and brightest but the entire workforce—those who contribute all of the skills and capabilities that an organization needs to sustain growth.
Dimensions of the problem
A committed, high-performance workforce is the heart and engine of any organization, and the facts about global workforce challenges are undeniable:
•Companies and countries will need more than 3.5 billion people by 2010 to fill knowledge worker positions. By 2020, that number will exceed 4 billion. Projections indicate that there will be shortages between 32 million and 39 million people to fill these positions. The U.S. will have the biggest shortfall—needing as many as an additional 14 million people.
• The shortage of talent is particularly acute at the management level. Two out of five Chinese companies find it difficult to fill senior-management positions, and turnover rates at the manager level in China are 25% higher than the global average.
• The balance of the global labor supply is shifting to developing economies. Between 2005 and 2050, the working-age population of emerging economies will increase by 1.7 billion, compared with a decline of 9 million in the developed economies.
• In the U.S., retirement of the baby boomers means that the 500 biggest companies could lose half their senior managers in the next five years.
These are just a few facts, but it's clear that talent has become a global commodity, fiercely fought over by multiple competitors. As a result, I've found that CEOs are eager to discuss the development of a "talent map" to help them think about the skills they require, for what purposes, where in the world they should be located, and how they can secure those skills. Many have devised innovative solutions, some more successful than others.
Five strategic imperatives
Whether recruiting young technicians from the developing world, retaining valuable experience from an aging generation of employees, or integrating Generation Y into the workforce, executives confront a maelstrom of talent issues. At Accenture, we have identified five strategic imperatives that companies should embrace to become talent-powered organizations:
1. Human capital strategy must be an intrinsic part of any business strategy, but it requires the discipline of a long-distance runner.
I have seen many midsize European companies that aren't able to go global as fast as they wish because they don't have the "employer brand" in the markets they wish to serve. They need to work at building that employer brand first—before trying to recruit quality talent in new markets. Conversely, I have been amazed at the level of ambition of a country like Singapore, which is encouraging the inward flow of millions of skilled workers over the next few years to maintain its position as a regional powerhouse.
2. Diversity must be recognized and nurtured as the organization's greatest asset, and the ability to attract and work with diverse talent must be seen as a critical competitive advantage.
For example, Eli Lilly's (LLY) operations in Japan overcame the hiring difficulties of a more limited labor pool by targeting Japanese women, whose employment opportunities are more limited in the male-dominated culture of Japanese firms. However, in a multipolar word, we must expand the traditional notions of diversity. Diversity means much more than ethnicity, gender, or sexual orientation. New and evolving diverse populations include a full range of ages as well as career and geographic experiences. Global mobility of management talent is becoming a critical discussion with many of the organizations I meet—as is the diversity of global experience represented around the board room table.
3. Learning and skills development are among one of the most important capabilities for the talent-powered organization, but the best programs—aimed at a global workforce—recognize that not everyone learns in the same way or at the same pace. Increasingly, technological innovations are generating new and exciting answers to these challenges.
New software tools and services are enabling companies to have their top performers collaborate, share their ideas, and flesh out new products and processes over distances and time zones from anywhere around the world.
Technology is also at the core of an Internet-based learning approach in Kenya being used with nurses who are seeking certification. With access to curriculums in and around their hospitals and villages, nurses are able to balance their home lives and combine theory with practice in real time. An eLearning training program that we developed with the African Medical & Research Foundation (AMREF) was designed to train 20,000 nurses in just five years—instead of 100 years—and thereby help combat the health-worker talent crisis on the African continent.
Here's another example. The U.S. Tennessee Valley Authority leverages its learning investments by developing competency where it is most critical—not an easy task considering that its workforce ranges from the agency's own law-enforcement personnel to custodians. Organized into "job families," each group has its own profession-specific learning team.
4. Engagement is the mystery ingredient that can transform business performance, but it can be elusive.
Engagement drivers are as diverse as the talent pools we see across the globe, and they need to be tailored to the local cultures as well as the corporate cultures of organizations.
In Brazil, I saw how an innovative cosmetics and personal products company motivates its sales force by engaging them very directly in the sustainability mantra of the organization. That way they can understand the products they are selling as well as believe in their organization's care for the environment from which they are sourced.
In the U.S., Google (GOOG) attracts, engages, and retains employees by promoting the fun experience of working there.
In addition to offering employees a chance to be part of a community of people doing meaningful work, the company treats family, leisure, and personal well-being as important parts of employees' lives. Blurring the line between work and life, "Googlers" can bring their kids to work, enjoy weekly roller-hockey games in the parking lot, park their scooters and pets in their cubicles, or work out in the gym.
5. Talent is everyone's responsibility, not just HR's.
The primary challenge is retaining talent once you have it—we see this with chemical companies in the developed world, construction companies in India, or even in seeking qualified program managers for our major projects in China or Africa. Every touch point in the organization has an opportunity to make a difference, and I have seen that talent can flee an organization because of factors as varied as a poor work environment, unclear career models, or poor performance by management.
Procter & Gamble (PG) has had success when managers work with employees to define the ideal "destination jobs" they would like to obtain, and to create plans to help them get there. Managers' compensation, stock options, performance ratings, and assignments are tied to their success in recruiting, developing and retaining high-performing employees. And at Marriott (MAR), one-third of a manager's performance rating is based on employee engagement scores.
The future
With once-familiar talent pools drying up and new ones rapidly coming upstream, organizations have to move fast and act smart if they are to attract, motivate, and keep the best people. Business leaders are quickly realizing the magnitude of these issues and challenges, but at the same time they express a lot of concern about their organizations' readiness to respond.
So what to do? I recommend that corporate boards must include talent on their full agendas—not just delegate the subject to HR. Boards need to engage with their HR functions to develop the necessary culture, mindset, and capabilities to become truly talent-powered organizations. Once the talent strategy and its implications for skills and talent have been set, managers then need to drive that strategy through their organizations. In the end, both top management and HR need to shift from a purely operational focus. Key talent management processes need to become embedded in the rest of any organization.

Mark Foster is Accenture's group chief executive—Management Consulting & Integrated Markets, with overall responsibility for the development of the company's management consulting capabilities.