Talent management during economic downturn
The necessity of a talent management focus during an economic downturn is debated, however it certainly presents both challenges and opportunities. It may be assumed that a financial shortage could mean that an extra focus on talent management is just an extra expense which should be avoided. Many companies however are using talent management strategies as a solution to help a floundering business.
Economic downturn normally results in downsizing, reorganisation, and change which can have big effects on the loyalty and job security of employees. This will clearly damage the workforce of many companies, so some are using talent management to try and retain these employees and stop them looking for jobs elsewhere after the recession. “A 2003 survey by the Society for Human-Resource Management suggested that 83% of [American] workers were “extremely” or “somewhat” likely to search for a new job when the economy recovered”# However some companies are taking advantage of this by poaching talent from others during the recession.
Article on the pros and cons of talent management during recession
The War For Talent
The War for Talent is a phrase used in the book The War for Talent by Ed Michaels, Helen Handfield-Jones, and Beth Axelrod. It describes the phenomenon of the increasing need for businesses to focus on talent.
The book describes how business has evolved through the industrial age into the information age, where tangible assets and capital matter less. instead, intangible factors such as brand strength or reputation, or innovation and ideas matter most. The authors credit talent in achieving long term success in all these areas.
A large survey by the authors of 'The War for Talent' “found that 89 percent of those surveyed thought it is more difficult to attract talented people now than it was three years ago, and 90 percent thought it is now more difficult to retain them. (Elizabeth L. Axelrod, Helen Handﬁeld-Jones, and Timothy A. Welsh.(2001) The War for Talent; Part 2. McKinsey & Company.)
Even though this book was written over a decade ago, and the term had already been coined, ‘the war for talent’ has intensified and expanded. More and more companies are waking up to the need for a talent management strategy in more and more different areas. High value ‘blue-chip’ companies have been at the center of talent management strategies, but many other companies in the production of goods and services are now considering a focus on talent.
The book doesn’t outline exactly how to manage talent effectively but explains the reasons and importance of talent management as a philosophy or mindset.
The world war for talent
In recent decades, much of Western Europe has experienced depopulation. As mentioned previously, this has combined with the gradual retirement of the ‘baby boomers’ and compounded the skills shortage. The west has over the same time frame attracted employees from many countries across the world such as India and Poland. As these countries develop themselves, their employment prospects increase, which combines with economic migration to create a more global skills shortage.
It is estimated that the need for skilled workers in developing countries which traditionally supply the west with workers will increase dramatically, resulting in large scale future skills shortages. “McKinsey estimates that, over the next 10-15 years, China alone will require 75,000 leaders who can manage in global environments; today there are fewer than 5,000.” (Allan Schweyer, Ed Newman, Peter DeVries (2009) Talent Management Technologies, Published by Author House, p20)
This global skills shortage will have further implications for migration and skills shortages in the west. The situation is already very complex and its anyones guess as to how or if it will settle. For example the UK has long attracted Indian workers because of a skills gap in engineering and IT. It has also more recently been attracting Polish workers since EU laws have permitted free economic migration. Poland then started to attract many Indian workers to fill the gap left by the large numbers of young Polish economic migrants. Now, the economic downturn has in many cases led Polish and Indians to head home for recruitment.
The current implications of this are that highly skilled economic migrants are less likely to emigrate to fill western skills gaps, as well as skills gaps both remaining and emerging elsewhere. The war for talent has become global and is set to become even more intense.