According to McKinsey Consultants, Matt Guthridge, Emily Lawson and Asmus Komm, most companies are unprepared for the challenge of finding, motivating, and retaining talent. The experts draw their conclusion after revisiting a McKinsey study conducted about a decade ago titled the War for Talent in 1997 - the study that drew attention to an imminent shortage of executives. The consultants conclude that even today, the problem remains acute, and if anything, has become worse.
The demographic landscape of global workforce is dominated by the looming retirement of baby boomers in the developed world and by a dearth of young people entering the workforce in Western Europe. Meanwhile, there are question marks over the appropriateness of the talent in many emerging markets. Lofty ideas and investments to address the talent problem have largely failed, compounding the frustration of many senior executives. In recent past, organizations have invested heavily to implement human-resources (HR) systems and processes, and talent issues have unquestionably moved up the boardroom agenda. Although these moves are laudable and necessary, they have been insufficient at best, superficial and wasteful at worst. Too many organizations still dismiss talent management as a short-term, tactical problem rather than an integral part of a long-term business strategy, requiring the attention of top-level management and substantial resources. To manage talent successfully, executives must recognize that their talent strategies cannot focus solely on the top performers; that different things make people of different genders, ages, and nationalities want to work for (and remain at) a company; and that HR requires additional capabilities and encouragement to develop effective solutions. Only in this way will talent management establish itself at the heart of business strategy.
The experts point at three external factors — demographic change, globalization, and the rise of the knowledge worker – as the reasons forcing organizations to take talent more seriously. But the threats don’t come solely from the outside; companies themselves have made matters worse.
While the developed world wrestles with falling birthrates and rising rates of retirement, emerging markets are producing a surplus of young talent; in fact, they graduate more than twice as many university-educated professionals as the developed world does. Many organizations have been eyeing this source of talent enthusiastically, but riding the new demographic tide won’t be straightforward. HR professionals at multinational companies in emerging markets such as China, Hungary, India, and Malaysia have told McKinsey researchers that candidates for engineering and general-management positions exhibit wide variations in suitability. Poor English skills, dubious educational qualifications, and cultural issues—such as a lack of experience on teams and a reluctance to take initiative or assume leadership roles—were among the problems most frequently cited.
A particular demographic challenge comes from Generation Y—people born after 1980—whose outlook has been shaped by, among other things, the Internet, information overload, and overzealous parents. HR professionals say that these workers demand more flexibility, meaningful jobs, professional freedom, higher rewards, and a better work–life balance than older employees do. Another challenge, as companies expand into new international markets, comes from globalization. To succeed in countries such as Brazil, China, India, and Russia, organizations must have executives willing and able to work abroad. They also require talented local people, with an international mind-set, who understand local ways of doing business and local consumers—notably, the needs of an expanding middle class. Finally, knowledge workers, the fastest-growing talent pool in most organizations, have their own demands and peculiarities. By one estimate, 48 million of the 137 million workers in the United States alone can be classified in this group; a single company can employ upward of 100,000. Knowledge workers are different because they create more profit than other employees do—up to three times more, according to McKinsey research—and because their work requires minimal oversight. Yet McKinsey research suggests that some of companies struggle to extract value from this newly enlarged type of workforce. Further, the technology supporting its work has created faster and better ways to share information, and that further drives the demand for such workers and their potential impact.
The expert state that emphasizing the recruitment and retention strategies for only the top-performing 20% or so is unlikely to yield significant long-term benefits. The impact of top talent on corporate performance hasn’t diminished, but as a result of the expansion of knowledge work — organizations can’t afford to neglect the contributions of other employees. A more inclusive approach is the need of the hour that involves thinking of the workforce as a collection of talent segments that actively create or apply knowledge.
The consultants feel that UK retailers are among the most enlightened employers in attracting young and old alike. Tesco explicitly divides its potential frontline recruits into those joining the workforce straight from school, students looking for part-time work, and graduates. Tesco’s competitor ASDA is the UK's biggest employer of over-50s—a population segment that ASDA equates with better customer service, improved team morale, and reduced labor turnover. In China, multinational companies such as Citigroup, GE, and HSBC, which must compete fiercely against local businesses for talent, tailor their employee value propositions to highlight opportunities for real decision making, career development, housing, and educational benefits and learning. The oil services group Schlumberger, introduced a path that proved to be a strong motivator in the technical community: performers at junior level were rewarded with promotions, status, and compensation comparable to what senior managers enjoy, as well as opportunities to shape research and product-development agendas. Senior technical peers rather than line managers review the performance of these specialists. Furthermore, Schlumberger has become one of the exploration and production industry’s leading recruiters of women engineers by introducing flexible work practices to accommodate mobility and other life cycle needs.
The demographic landscape of global workforce is dominated by the looming retirement of baby boomers in the developed world and by a dearth of young people entering the workforce in Western Europe. Meanwhile, there are question marks over the appropriateness of the talent in many emerging markets. Lofty ideas and investments to address the talent problem have largely failed, compounding the frustration of many senior executives. In recent past, organizations have invested heavily to implement human-resources (HR) systems and processes, and talent issues have unquestionably moved up the boardroom agenda. Although these moves are laudable and necessary, they have been insufficient at best, superficial and wasteful at worst. Too many organizations still dismiss talent management as a short-term, tactical problem rather than an integral part of a long-term business strategy, requiring the attention of top-level management and substantial resources. To manage talent successfully, executives must recognize that their talent strategies cannot focus solely on the top performers; that different things make people of different genders, ages, and nationalities want to work for (and remain at) a company; and that HR requires additional capabilities and encouragement to develop effective solutions. Only in this way will talent management establish itself at the heart of business strategy.
The experts point at three external factors — demographic change, globalization, and the rise of the knowledge worker – as the reasons forcing organizations to take talent more seriously. But the threats don’t come solely from the outside; companies themselves have made matters worse.
While the developed world wrestles with falling birthrates and rising rates of retirement, emerging markets are producing a surplus of young talent; in fact, they graduate more than twice as many university-educated professionals as the developed world does. Many organizations have been eyeing this source of talent enthusiastically, but riding the new demographic tide won’t be straightforward. HR professionals at multinational companies in emerging markets such as China, Hungary, India, and Malaysia have told McKinsey researchers that candidates for engineering and general-management positions exhibit wide variations in suitability. Poor English skills, dubious educational qualifications, and cultural issues—such as a lack of experience on teams and a reluctance to take initiative or assume leadership roles—were among the problems most frequently cited.
A particular demographic challenge comes from Generation Y—people born after 1980—whose outlook has been shaped by, among other things, the Internet, information overload, and overzealous parents. HR professionals say that these workers demand more flexibility, meaningful jobs, professional freedom, higher rewards, and a better work–life balance than older employees do. Another challenge, as companies expand into new international markets, comes from globalization. To succeed in countries such as Brazil, China, India, and Russia, organizations must have executives willing and able to work abroad. They also require talented local people, with an international mind-set, who understand local ways of doing business and local consumers—notably, the needs of an expanding middle class. Finally, knowledge workers, the fastest-growing talent pool in most organizations, have their own demands and peculiarities. By one estimate, 48 million of the 137 million workers in the United States alone can be classified in this group; a single company can employ upward of 100,000. Knowledge workers are different because they create more profit than other employees do—up to three times more, according to McKinsey research—and because their work requires minimal oversight. Yet McKinsey research suggests that some of companies struggle to extract value from this newly enlarged type of workforce. Further, the technology supporting its work has created faster and better ways to share information, and that further drives the demand for such workers and their potential impact.
The expert state that emphasizing the recruitment and retention strategies for only the top-performing 20% or so is unlikely to yield significant long-term benefits. The impact of top talent on corporate performance hasn’t diminished, but as a result of the expansion of knowledge work — organizations can’t afford to neglect the contributions of other employees. A more inclusive approach is the need of the hour that involves thinking of the workforce as a collection of talent segments that actively create or apply knowledge.
The consultants feel that UK retailers are among the most enlightened employers in attracting young and old alike. Tesco explicitly divides its potential frontline recruits into those joining the workforce straight from school, students looking for part-time work, and graduates. Tesco’s competitor ASDA is the UK's biggest employer of over-50s—a population segment that ASDA equates with better customer service, improved team morale, and reduced labor turnover. In China, multinational companies such as Citigroup, GE, and HSBC, which must compete fiercely against local businesses for talent, tailor their employee value propositions to highlight opportunities for real decision making, career development, housing, and educational benefits and learning. The oil services group Schlumberger, introduced a path that proved to be a strong motivator in the technical community: performers at junior level were rewarded with promotions, status, and compensation comparable to what senior managers enjoy, as well as opportunities to shape research and product-development agendas. Senior technical peers rather than line managers review the performance of these specialists. Furthermore, Schlumberger has become one of the exploration and production industry’s leading recruiters of women engineers by introducing flexible work practices to accommodate mobility and other life cycle needs.
The experts conclude that only HR can translate a business strategy into a detailed talent strategy: for instance, how many people does the company need in order to execute its business strategy, where does it need them, and what skills should they have? For this to become a reality, HR directors should acquire deeper business knowledge. At Procter & Gamble, an aspiring HR manager is expected either to take a job in a plant or to work alongside a key-account executive to learn about a business unit and win the confidence of its managers. Coca-Cola Enterprises rotates top-performing line managers into HR positions for two or three years to build the business skills of its HR professionals and to make the function more credible to the business units.
No comments:
Post a Comment