The so-called 'war for talent' has sent employers back to the drawing board on how to recruit and retain key employees. What do those managing an international workforce need to know?

Retiring baby boomers as well as a lack of qualified graduates will only worsen the 'acute shortage of talent', contends a study published  by Deloitte Research called 'It's 2008: Do You Know Where Your Talent Is?'.  Health care, manufacturing, energy and the public sector will be among the industries to "suffer a mass exodus of employees," says the report.

Finding and keeping qualified workers will be key

"What we're seeing is a shortfall of millions of people who are qualified to do the work that needs to be done," said Roger Herman, CEO of The Herman Group, a workforce trends consultancy based in North Carolina.

That could mean high performers would have greater leverage or bargaining power when presented with new career opportunities, especially offers to work abroad.

"Particularly talented executives will take the view, 'why should I take that career risk?'" said Peter Felix, president of the Association of Executive Search Consultants. "Why would I make that very substantial sacrifice unless there are very real rewards?"

As well, dual career and family concerns make accepting expatriate assignments less attractive, points out Glenn Ditrich, managing director in the Netherlands for BrassRing, an HR software and consulting firm.

"The key for companies right now is that there are a lot of traditional issues that make it difficult to find that mobile workforce," he said.

Some question whether there is a demographically-driven 'war for talent' at all. The chances of a true labour shortage are "somewhat remote," argues Peter Cappelli, director of the Center for Human Resources Management at the Wharton School of the University of Pennsylvania, in his paper "Will There Really Be a Labor Shortage?"

Cappelli contends in his report that the battle for knowledge workers has more to do with recruiting and retention challenges in an ephemeral marketplace than demographic shortages.

"What employers should do is recognise that they have to develop competencies in recruiting and selection, performance management, retention policies and other practices that support the ability to find and keep good workers," writes Cappelli.

Whatever the demographic scenario, there is agreement that finding and keeping qualified people is, or at least should be, a priority.

"There is no one that's not talking about retention, internal mobility and fitting people into the right jobs," said Ditrich, adding that the focus is on talent development and management. 

"That's really strategic HR. That's where people are striving to get to - workforce planning," he said.

Top 'mobile' workers will command more

There still appears to be some disconnect between the conversation about improving retention initiatives and doing it.

"The reality is many companies pay lip service to retention," said the Association of Executive Search Consultants' Peter Felix.

Part of the problem is that while HR may be engaged in the dialogue, "the language of talent is not spoken in the boardroom," said Vernon Bryce, managing director of Kenexa Europe, a recruiting and retention consultancy.

"Somebody has got a very large education job to do," he said. "There is really a mountain to climb."

With expectations for higher productivity and less job security, surveys are revealing that "more than half the workforce is fed up," according to the Deloitte report. In France, the report highlights, "only 12 percent of workers are engaged in their work."

Theresa Welbourne, a professor at the University of Michigan Business School, conducts a monthly survey of about 4,000 executives worldwide and has observed high levels of dissatisfaction.

"They are burned out," she said. "The burn out seems to be a function of everybody multi-tasking to the extreme."

The disengaged worker and the role that plays in damaging retention efforts may be a critical factor in the so-called crisis. Bryce recalled the proverbial frog in boiling water.

"Some are boiling and don't realise it," he said, "and some have already leapt out."
 
One way to check if you have leapt out is to take a look at the metrics used for labour turnover. Bryce said some organisations are still using basic labour turnover or even cost of labour turnover metrics. But tracking cost of talent turnover will offer better insight into how an organisation is faring in the 'war for talent'.

The key issue, however, is that "many companies have yet to grasp the full implications of mass higher education," contends Anthony Hesketh, a political economist at Lancaster University Management School in the UK, in a book he co-wrote called, "The Mismanagement of Talent: Employability and Jobs in the Knowledge Economy."

"The major problem confronting organisations today is how to educate, select, and develop the wealth of talent now entering the job market with close to two decades of formal education," he writes. 

"The real ['war for talent'] is how we make better use of the wealth of talent that is now being produced… There needs to be a cultural revolution in the way talent is understood and how it is nurtured."

31 March 2005

Jennifer Hamm is a freelance journalist based in the Netherlands. She can be contacted through her website at www.JenniferHamm.com.

Subject: Jobs and recruitment and talent crisis