What's the Big Idea?
The paradox of hiring during times of economic hardship is that even when unemployment is high, even when businesses have a vast pool of potential hires from which to recruit, good talent is hard to find -- and harder to keep.
The problem is not about a lack of applications, but a lack of skilled workers. This scarcity in the midst of plenty is one of the key issues facing today's companies, and it holds true around the world.
In developing countries in particular, there is a pronounced need for experienced managers, says Anil Gupta, a University of Maryland professor and one of the world’s leading experts on strategy and globalization. "This kind of talent cannot be scaled up very readily. It's very sticky because you need experience to have seasoned managers. You need college-level training or post-graduate training for IT professionals, for accounting professionals."
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Two trends have contributed to the shortage of professional labor, he says. On one hand, multinational companies are no longer thinking of countries like China and India simply as places for white collar and blue collar off-shoring, but as seriously important markets. Increasingly, companies are performing essential functions like raising capital and R&D abroad, and they are finding that local nationals are better than expats at getting the job done.
At the same time, domestic companies within India and China are growing at faster rates than multi-nationals and going global themselves -- meaning that their need for high-level employees is growing.
What's the Significance?
So what's to be done? "In some sense you really have to accept the nature of this labor market for professional talent," he says, "which is skewed in favor... of the people rather than the employers.”
This means that companies should expect employee compensation to go up faster than per capital income growth rate. In addition to having the usual hiring strategy in place, they’ll also have to get smart about building, fostering, and retaining talent.
We need only to look to Silicon Valley for a model: “They would have employment contracts, they would have stock options that would vest over four years and so on, and so therefore, while you cannot be assured that people will stay with you for ten years, you can be reasonably sure through these golden handcuffs that people will stay with you for at least, let's say, three or four years.”
Businesses should remember that many of the best employees are actively seeking training and opportunities for career advancement -- and multinational companies have a few distinct advantages in this realm.
First, they typically have resources and the ability to give global rather than local assignments, which are appealing to employees. Second, they have a long history of management from which they can draw. It's a challenge, but if businesses are willing to fully and meaningful commit to employee training, there's also great promise for the creation of a competitive, well-educated workforce.
About “Inside Employers’ Minds”
“Inside Employers’ Minds: Confronting Critical Workforce Challenges” features a dedicated website (www.mercer.com/insideemployersminds) which contains a number of resources focused on addressing each key issue.
Image courtesy of Shutterstock.com.
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