Knowledge Crisis Ahead?
As of the first quarter of 2006, according to the US Bureau of Labor Statistics, unemployment for knowledge workers (defined as anyone with a bachelor's degree or higher) was hovering just above 2% and on the decline throughout the US. In addition, 76 million baby boomers will retire in the next five years. We are on the verge of a more acute and protracted "War for Talent" than we faced in the late 1990s. However, this time the talent war will be much more cross-cultural, multi-generational and global.
Recruitment and human resources leaders can no longer afford to be parochial in their outlook on talent. Ageism, non merit-based discrimination of any sort and myopic attitudes toward the sources of talent will spell disaster for organizations where those biases are allowed to prevail. The winners of the war on talent will welcome talent of all ages and varieties, and they will build their networks into the farthest reaches of the planet.
In a 2006 survey of vice presidents of human resources conducted by the Human Capital Institute and Ernst & Young, human resources leaders demonstrated a clear appreciation of the talent shortages likely to come as retirements increase. The report notes: "While more than half... agreed that the aging workforce is an issue that must be dealt with because it will lead to a workforce shortage, and almost two-thirds said that retirements in their organization will lead to a 'brain drain,' less than one-quarter of those surveyed said that the aging of their workforce is an issue that is strategically very important to them." This is a strange paradox given the widespread shortages of talent that are already occurring across the country.
As for diversity, the US Census Bureau projects that the percentage of whites in the workforce will drop to just 62% by 2020 (from 82% in 1980) and that of minorities will rise to 37% (from 18% in 1980). These numbers will also be reflected among the consumer population making a diverse workforce an imperative for many organizations that need to reflect their customer base. Strategic human resources and recruiting executives must make their workplaces more attractive and friendly to diverse and older workers. And when this is done, they must recalibrate their branding initiatives in order to appeal to both groups.
The winners also will master the challenges of assembling and deploying a virtual global workforce. The Organisation for Economic Co-operation and Development (OECD) projects that more than 98% of global workforce growth will occur outside of North America and Europe over the next three to five decades--and top talent, whether it be in India, China or Brazil, is far less inclined to emigrate for work than in the past.
But developing a global mindset is easier said than done. As the world shrinks with greater advancements in technology, it expands as new business locations and talent pools become viable. The global labor pool has virtually doubled in size in the last 15 years, and according to Harvard University's Richard Freeman, "... the entry of India, China and the former Soviet Bloc to the global capitalist economy is a turning point in economic history."
It is imperative that executives and senior managers, from small, mid-size and large firms, understand the implications of our aging and diversifying domestic talent pools as well as the dynamics of a global workforce that is expanding at lightning speed. For human resources leaders, knowledge of best practices in retaining older workers is key. For recruiters, knowledge of top sources for recruiting the diverse workforce and of the factors that appeal to diverse recruits is critical.
In the end, tapping into the global, remote workforce may prove the most challenging. Recruiting leaders should ask themselves who they know in talent "hot spots" around the world and how well they know those regions--their cultures and values--themselves. What partnerships have they made with global services firms who can provide on-demand skilled workers? Would they know where to start if they had to quickly build a team of software engineers, or accountants and actuaries, or build a call center for customer care and management? As the supply of skilled and semi-skilled workers dries up in the developed world, these connections and partnerships will be invaluable.
For more information on the HCI/Ernst & Young research or to learn about HCI's programs for building and managing the global workforce, please visit www.humancapitalinstitute.org or contact Allan Schweyer directly at firstname.lastname@example.org.