THESE are heady days for most companies. Profits are up. Capital is footloose and fancy-free. Trade unions are getting weaker. India and China are adding billions of new cheap workers and consumers to the world economy. This week the Dow Jones Industrial Average hit a new high.
But talk to bosses and you discover a gnawing worry—about the supply of talent. “Talent” is one of those irritating words that has been hijacked by management gurus. It used to mean innate ability, but in modern business it has become a synonym for brainpower (both natural and trained) and especially the ability to think creatively. That may sound waffly; but look around the business world and two things stand out: the modern economy places an enormous premium on brainpower; and there is not enough to go round.
So starts the well-written article The Search for Talent (subscription required) in a recent issue of the Economist. You know that talent acquisition is a real issue when even the economist starts harping about it!
According to the article, companies of all sorts are taking longer to fill jobs — and, according to a survey quoted therein, many companies say they are having to make do with sub-standard employees! In addition, they say there is evidence that the talent shortage is about to get worse! In addition, the proportion of American workers doing jobs that call for complex skills has grown three times as fast as employment in general. Moreover, as other economies move in the same direction, the global demand is rising quickly! For example, where are our best construction engineers? I’d bet some of them are in Dubai working on the Dubai Mega Islands project while tens of thousands more are probably scattered on engineering projects the world over! After all, the talent crunch is worse in some countries, with Mexico, Canada, and Japan leading the pack. And when you consider that by 2025, the number of people aged 15-64 is projected to fall by 7% in Germany, 9% in Italy and 14% in Japan, talent these days truly has global opportunity.
Not to say the talent crunch isn’t bad at home … with the baby-boomers preparing to retire, some estimates predict that half the top people at America’s 500 leading companies will go in the next five years! Ouch! And the Economist is not the only publication to point out this fact in recent times, an article in last month’s Inside Supply Management, entitled The Greying Supply Chain notes that 76 million baby boomers in the United States will soon be eligible for retirement!
And it’s going to be just as hard to replace our leaders as it is replacing everyone else. After all, with all of the downsizing, outsourcing, and rightsizing crazes of the eighties and nineties, employee loyalty is a distant memory for many employers who will continue to lose current and potential employees to the highest bidder. (There’s something to be said for putting your employees before your stock price!)
So what can you do? First of all, you can prepare to open your checkbook. Talent is not cheap … but when you consider the ROI on a talented employee vs. a sub-par employee, it’s not as expensive as you think … especially when a talented supply chain professional can save your firm millions upon millions of dollars with just one brilliant idea. How do you attract talent? Although my last post was a bit lengthy on the topic, the answer is simple. Really simple. Be a Great Place to Work!
The truth is … talent is attracted to talent, and great places to work attract talent. This starts with an innovative culture focused on success and the people who enable it. One where employees are empowered and encouraged to try new things, even if they fail once in a while. We often learn more from our mistakes than our successes, and a failure in a small controlled experience is often worth more than a major success. (Read my earlier posts on innovation here and on eSourcing Forum.)
What can you do to prepare for the impending crunch that will result from your retiring workforce? The ISM article provides some good tips.
- Make sure you understand the demographics of your supply chain organization.
Who’s nearing (early) retirement? What do they do? And, more importantly what do they know?
- Put plans in place to preserve your most critical institutional knowledge before it walks out the door!
Your employees, and the knowledge in their heads, is your most critical asset. Give them time to document it, buy systems to help them document it, and make sure those systems are accessible by all employees.
- If you haven’t already, put alternative work arrangement programs in place.
Can your employees work part time? Remotely? On a project basis? Not all employees may want to go from 60 to 0 right away – you need to be prepared to take advantage of those who want to phase into retirement slowly.
- Work on an open organizational culture that accepts and respects everyone.
You need the knowledge of the seasoned veterans, the education of the new graduates, and the raw skills of the experienced individuals in between. Everyone should feel wanted – and needed – and each individual should be able to contribute on her or his strengths.
In parting, the following quote from the Economist article sums up the situation nicely: Eventually, supply will rise to meet demand and the market will adjust. But, while you wait, your firm might go bust.