A new Economist Intelligence Unit study explores the talent shortage in the developed world and looks at how firms are managing the situation
London — If finding the right employees isn’t challenging enough, companies in the developed world are about to face a new challenge – recruiters from emerging markets. A survey by the Economist Intelligence Unit, sponsored by SAP AG, found that when talent isn’t available locally, companies in emerging markets will look to western Europe and North America to fill their vacancies.
This is particularly onerous as ageing populations and declining birth rates in much of the developed world are beginning to cause a talent crunch. In some countries, such as Japan, the problem is particularly acute. Three-quarters of Japanese executives view the ageing population as the primary factor in the talent gap their firms are facing.
Businesses across the world are worried—of the 587 executives polled for this survey, nearly two-thirds expect employee recruitment and retention to become tougher over the next three years, and over one-fifth see this as becoming “significantly harder”. Faced with this situation, talent management is high on the corporate agenda.
“Organisations need to start thinking creatively about how to resolve the talent shortage issue,” says Robin Bew, Editorial Director at the Economist Intelligence Unit. “Hiring a head-hunter to poach employees from a rival firm is not a sustainable solution.”
Other key findings of the report include the following:
• Soft skills are the most sought after, but the hardest to find. The ability to manage change, to think strategically and to communicate effectively are the most wanted skills, yet these skills are in the shortest supply.
• Talent management is too important to leave only to HR. Having recognised people as a core competitive asset, companies are treating talent management as an integral part of their business strategy. A majority of survey respondents believe that the most effective talent-management strategies are devised and implemented by business units themselves and supported by the HR function.
• A more creative approach is needed. Companies are continually told that to stay competitive they need to be more innovative. This is no less true of talent management. Firms will need to recruit not only from other countries but also from other industries, for example, and they will also need to work more proactively with universities as well as other businesses to develop training programmes and help expand the available pool of skilled employees.
For a free copy of Talent wars: The struggle for tomorrow’s workforce, please go to the following website:www.eiu.com/sponsor/SAP/talent
Economist Intelligence Unit
Joanne McKenna, Press Liaison, +44 (0)20 7576 8188, firstname.lastname@example.org
About the survey
The research for this report is based on an online survey, conducted in February-March 2008, of 587 executives in the US, UK, Germany, France and Japan. The survey sample was senior: 33% of respondents were C-level executives such as CEOs, CFOs, and CIOs, and the balance consisted of senior vice presidents, heads of business units and other senior managers. A range of industries was represented, including financial services, manufacturing, information technology and professional services. Most of the firms they work for are large: 59% of surveyed executives work with firms having annual revenue of at least US$500m. To obtain additional insight, we also conducted a series of in-depth interviews with senior executives and independent talent management experts
About the Economist Intelligence Unit
The Economist Intelligence Unit is the business information arm of The Economist Group, publisher of The Economist. Through our global network of about 650 analysts, we continuously assess and forecast political, economic and business conditions in 200 countries. As the world’s leading provider of country intelligence, we help executives make better business decisions by providing timely, reliable and impartial analysis on worldwide market trends and business strategies.