In two short years there will be 10 million more jobs in the United States than skilled people to fill them, according to the U.S. Bureau of Labor Statistics. IT and other fields will feel this deficit.
The retirement of the baby boomers exacerbates this skills crisis; the first wave of them is eligible to collect Social Security in 2008. The baby boomer generation, which accounts for one-quarter of the total U.S. work force, will represent the largest number of U.S. workers (78 million) to voluntarily exit the work force in a single decade. This impending exodus has left CEOs, CIOs and human resources executives wondering if they have the right staff -- particularly in IT fields -- to meet anticipated customer needs.
More startling is that a third of American companies have done nothing about the aging of their work force, according to a survey by the Society for Human Resource Management.
Executives in every industry across the country and worldwide must begin to identify and fill critical skills requirements -- if they haven't already -- so they won't have to play catch-up as competition for talent ignites from a slow burn to a blazing inferno.
If two recent global surveys from The McKinsey Quarterly are any indication, business leaders are deeply concerned. In the first survey done in 2006, business leaders regarded finding talented people as likely to be "the single most important managerial preoccupation for the rest of this decade." The second assessment, in November 2007, revealed that almost half of respondents expected intensifying competition for talent -- and the increasingly global nature of the competition -- to have a major effect on companies over the next five years.
According to McKinsey, no global trend was considered nearly as significant, with executives acknowledging their failure to pay enough attention to these issues. The surveys' recommendations point to business leaders recognizing that their talent strategies should hinge upon factors that motivate people of different genders, ages and nationalities to work for and remain at a company -- instead of focusing solely on top performers.
In addition, the research underscores that human resources departments require additional capabilities and encouragement to translate business needs into robust talent systems and processes for recruiting, developing and retaining employees.
For example, Forrester Research of Cambridge, Mass., encourages businesses to adopt a multipronged strategy to ensure the requisite skills for success are available in sufficient quantities. They recommended that the strategy include:
o assessing current skill levels and demand;
o identifying gaps through the development of a forecast of demand based on current and planned project portfolios; and
o developing a resource plan to close the gaps using a combination of internal development, newly hired employees and outside contractors.
I couldn't agree more. By following some best practices, the most strategic organizations -- in both the public and private sectors -- can find better ways to link employee capabilities and career goals with staffing needs, and effectively respond to the talent supply quagmire.
Smart executives have already embraced analytical technological solutions to understand the strengths of their work force and retain talented people -- internal and external recruits as well as qualified alumni. Echoing the survey and research findings, the best strategy to address the talent drain evolves around four initiatives:
o Obtain a concise and accurate picture of the work force. Capitalize on talent management analytics and measurement tools to keep abreast of talented people. The resultant work force demographic data can be used to analyze headcount development, turnover rates and work force composition, which together can revolutionize an organization's approach to headcount planning, budgeting and recruiting, and manage the many regulations related to talent management on the local, state and federal levels.
o Institutionalize the knowledge. To minimize business disruption when replacing older workers, companies should proactively identify workers with crucial skills who are approaching retirement and put into place programs to capture their knowledge, valuable business contacts, etc., and systematically transfer it to targeted successors. Critical knowledge can also be put into a repository, such as a structured course in an online learning system or a wiki for future recall.
o Plan for succession. Identifying top talents and potential successors for key positions is crucial for ensuring business continuity when integral leaders retire or leave. Technology plays a key role in identifying key positions, building a success profile, consolidating employee profile data, and implementing and tracking employee development activities. Analytical solutions are crucial tools for executives that allow them to quickly see the bench strength and associated readiness for potential successors to assume the position.
o Delay retirement of experienced workers. By offering key older employees extended employment contracts and health-care coverage, part-time work, flexible work hours, telecommuting options, independent contractor status and other mutual benefits, companies can better bridge the transition to younger employees while capturing and retaining the knowledge and experience of older workers.
As the competition for foreign and domestic talent escalates, organizations can adopt sound, proactive employee recruitment, retention and development best practices that capture the knowledge of existing employees and tap into talent at schools, colleges and universities. All or any combination of these efforts can help meet and possibly exceed the future demand. Because without a pool of talent, future business growth and innovation will be severely limited and the economic ramifications will reverberate around the world.