‘Houston, We’ve Got A Problem!’


The change-train is arriving at the station. All change, please. All change.
  • 77% of companies with more than 5,000 employees have talent management programs in place.
  • SMEs (with less than 250 employees) use talent management initiatives more than corporates companies to attract new hires (41% of SMEs versus 20% of corporates), as well as for retaining their key employees (50% of SMEs versus 35% of corporates).
  • “People aren’t your greatest resources, the right people are your greatest resources.” Jim Collins.
  • “A great employee isn’t just better than a good employee, they’re one hundred times better.” Mark Zuckerberg.
  • “There’s a huge difference between our very best performers and everyone else. If you take a hard look at productivity, you’re seeing what easily amounts to a 300 percent difference. In fact, it’s probably a five-to-one gap!” George Anders.
Remember, it’s a war for talent!.
  • 35% of all employers are struggling to fill their vacancies
  • 1 in 3 employers in the USA are experiencing a skills shortage when hiring for their vacancies
  • While this is 1 in 4 skills shortage for European employers hiring for their vacancies
  • The reason that 73% of employers gave as the main reason for being unable to fill their vanacies is: a lack of people with the right mix and level of skills, experience, and knowledge for the job
  • The jobs that employers are finding hardest to fill with the right people are in: leadership and senior management roles, engineers, technicians, accounting, finance, ICT, and sales. [This is supported by the findings in a UK talent planning survey, by Hays & the CIPD of 462 HR professionals, which found that 52% of employers said that managerial and professional roles are hardest to fill, while 46% found it difficult to fill technical specialist roles]
  • And this skills shortage is getting worse not better! Most of the employers in the survey report their inability to fill their vacacncies is at its highest since 2008
  • 54% of these employers believe that this skills and talent shortage will have a medium to high impact on their organisation’s competiveness in the marketplace. [This is up from 42% in 2012]
He could be talking about the skills & talent shortage
What dis-engaged top employees think, say & do!
  • Talent Identification Hiring Practices: These often involve a mix of psychology / psychometirc tests, numeracy and literacy and analytic test, interviews, and case study tests, etc, all of which are run through some form of assessment-centre (one that is in-house or outsourced or a combination of both)
  • Graduate Programmes: Companies establish relationships with academic institutions and hire new graduates in graduate-training programmes
  • Early Recognition Of Top Talent: Early in an employee’s career at a company, they might be identified as ‘high potential’ (or not) and marked accordingly. Many thus remain classifed as ‘high potential’ and treated accordingly, despite changing circumstances and standards in the industry, the organisation, the work or in the employee
  • Career Planning, Development & Support: Once identified as ‘high potential’, an employee may be provided with some form of structured support and ‘coaching’ for their career-path within the organisation. This is usually delivered either by the line manager or HR. Also, it can include further training or sponsored studies, either in-house training or at a business school / tertiary institution. However, when this sort of intervention does happen, it’s for a very targeted and small number of employees — usually senior management only.
  • Succession Planning: What most companies call their talent management and career-pathing programmes are really succession planning programmes, which have a narrower purpose than ‘talent management’ so they can be quite limited in scope and often they are ‘one-dimensional’. As a result, these programmes are often formal and driven through HR and talent review committees. The result is they are transactional and more focussed on the organisation’s ‘talent pipeline’ needs, rather than speaking to any individual employee’s career needs and passions more broadly
  • Mentoring & Exposure To Senior Management: Those identified as ‘high potential’ and within the succession planning programmes will be given exposure to senior management and the work such senior managers attend to. This can be done through a combination of formal and informal interactions. Naturally, these initiatives are hard to scale up in an organisation, as there’s only so many people in senior management and they only have a finite amount of time
Productivity up. Workers wages…not so much.
Life’s been okay for the top 10% (& awesome for the top 1%), since 1979. Less so for everyone else!
  • Ranstad (a multinational HR consultancy) who’s research shows that in the UK many businesses’ recruitment processes for recruiting external candidates are far longer and more involved than they used to be, with 29% of surveyed employers now using psychometric tests, technical and/or aptitiude testing. (This is up from 14% in 2008.)
  • The same Randstad research shows that successful senior candidates now have an average of 3.4 interviews, up from 2.6 in 2008; while junior candidates now have 2.4 interviews, up from 1.6 in 2008. Added to this, the previous employment references-checks and other vetting processes pre-hiring candidates is an average of 15.2 days.
  • [In short, a common sense extrapolation from these findings is that this means that the hiring process per candidate now is on average between 2 to 4 months, compared with it being less than a month to about 1.5 months only a decade ago.]
  • Mark Bull, CEO for Ranstad UK, says: “Prospective employees have to jump through many more hiring hoops today than they did before the [2008] recession. A skill set that was satisfactory 5 years ago might not be now, as employers look towards the long-term potential of new hires. It’s not enough to demonstrate you can do the job being advertised — you need to show you can develop in the role and bring something valuable to that organisation in the future.”
Does this look like your hiring process? If so, maybe time to review it!
  • If these stats by Randstad paint an accurate picture, then there seems a BIG disconnect between this sort approach to hiring for the long-term and the actual reality of hiring evident in the trends of the decreasing length of tenure of the average employee at any one company. The average employee is no longer staying with the company for more than 2.5 years, so this focus on the candidate’s ‘long-term’ potential seems wasted as a criteria for the majority of hires that a company makes! At the same time it prevents companies from filling the current vacancy quickly and effectively with the actual available skills and talent in the local labour market.
  • This relates back to Peter Capelli’s observation (and critique) of current employer hiring practices. He argues that employers are creating job descriptions and candidate-criteria that more resemble ‘wish lists’ for the ‘perfect’ candidate, rather than their being what they should be: namely, a realistic job description and a helpful hiring criteria.
  • These ‘wish list’ job descriptions then get configured into candidate screening sotware that the erroneously ad auotmatically filters out lotsof suitable candidates for the role.
  • Peter Drucker called these sorts of functions (and job descriptions) ‘widow makers’: basically, this describes any job that regularly defeats good people.
  • [The name ’widow maker’ derives from the name New England captains gave to clipper ships 150 years ago when, no matter how well designed or constructed the boat, a lot of accidents and fatalities happened on them. In such instances, the owners couldn’t redesign or fix these ships; rather they broke them up and replaced the ship immediately).]
  • Whenever a company finds it has a job that keeps defeating good people, Drucker argued that they shouldn’t keep looking to hire a universal genius to make the function work, rather they should abolish the job and break it into the key tasks that can be performed by the right number of ordinarily competent people.
  • Drucker observed that it’s often companies in a period of rapid growth or undergoing a period of change whom create ‘widow maker’ jobs.
  • An inverted version of this problem that Peter Capelli observes is when a vacant role remains vacant for a long period of time. Instead of speedily filling the this vacant role, the organisation parcels out the work to other current employees — in effect the organisation is doing the same amount of work but with less employees (and therefore less payroll costs) . However, in the medium to long-term this leads to staff burnout (in other words, in the long term it causes decreased productivity, lower employee engagement and higher staff turnover…again pushing up the organisation’s hiring costs).
  • Another reason for psuedo-skills crisis, Cappelli believes, is that employers (in the USA, for example) are placing too much emphasis on previous work-experience and in so doing they’re turning away well qualified or trained candidates (but who might lack extensive previous work experience). Furthermore, employers are less willing than they used to be to provide well qualified or trained candidates with short-term training or skills learning that would ensure they succeed in the job. If implemented, such employer vocational training interventions would help alleviate the apparent skills shortage that those same employers complain of, argues Cappelli.
  • In what can be seen as an alternative conclusion derived from similar employer-hiring trends that Peter Capelli’s observed, ManpowerGroup believe that a cause of the global skills and talent shortage is actually due to weaker demand from employers, especially since 2008. Simply put, there are less jobs, less vacancies and less movement between jobs within organisations (due to weaker business growth in a weaker economy) than there were pre-2008. This means that there’s a lot more candidates competing per job — internally and externally.
  • Basically, people aren’t getting the same career and work-experience opportunities that they once did, so less people in the labour market have the experience, skills and competencies that employers want. This means that weak demand at employers is clogging up the system for people in the labour market, whether they’re employed or unemployed — creating a vicious circle. As ManpowerGroup puts it: “If demand for their products and services was more robust, employers would not have the same luxury of time — hence the apparent head–scratcher of listless jobs growth and greater skills shortages.”
  • Labour Market Participation: Since 2008, a larger proportion of the unemployed population has opted out of being active in the labour market. While some of these numbers are accounted for by retirement, a significant proportion are not of retirement age but have given up on looking for work. So, while unemployment has been falling as a share of the active labour market, the disenfranchised unemployed remains high and it means a certain amount of natural talent and manpower is locked out of the formal economy (and therefore remains unavailable to employers). Also, the 2008 Recession had a disproportionate impact on young people entering the labour market, resulting in many young people not benefitting from work experience after graduating (and it’s left them several years behind on the career curve previous generation took for granted). As a result, this has had a stunting effect on the available talent for employers. The World Economy Is Picking Up: Despite Anxieties, The Green Shoots Of Global Recovery Are Real, The Economist (March 2017)
  • Greying Demographics: The single BIGGEST change-trend for society and business is the current demographic shift that is fast occuring across most of the world right now. This is the trend of the ageing/greying population. More and more people are living far longer, while birth rates are falling in most countries (especially in most developed economies, but even in many emerging economies too). This means that our socities are heading to a point where there are more older people (50+ years of age) than there are younger people (under 30 years of age), which is expected to be the state of affairs within the next 10–20 years! This demographic shift in the median age of the avergae person is unprecendeted in human history! We don’t know how this is going to affect almost all aspects of our lives and of our society, but it is going to create some BIG changes in how business and socities function. What it does mean is that companies (and socities) will lose ever more skills, talent and expertise as their older employees retire (especially in management and leadership roles). Also, it means that companies are going to have to get better at attracting and retaining older workers, as well as its younger workers. (And, probably, they’re going to have to find ways to attract and retain immigrant workers.)
  • Labour Market Flexibility: The legal and regulatory framework of the geography that a company operates within will affect how it attracts, engages, and retains local skills and talent. Given the current uncertain and populist political climate in many parts of the world, it seems likely that labour market flexibility will be decreasing in many countries in the short-term (although the medium to long-term trends do suggest ever greater liberalising of labour markets, especially if immigrants become a necessary way to replace the ageing and retiring workers in the greying societies).
  • Wage Pressure: There has been a long trend of real wage disparity between high-skilled professions and industries versus low-skilled professions and industries. Given the trends discussed in this article, it’s evident that high value skills and talent are in short supply in labour markets around the world. Germany is experiencing very high wage pressure due to the skills shortage for high-skill industries, with an estimated shortage of 76,400 engineers and 38,000 ICT professionals.
  • Talent Mistmatches: This is when the skills that employers need are not matched by the available skills in the local labour market, which is evident in the disconnect of a high number of unfilled vacancies at employers and at the same time as there are a high number of long-term unemployed people in the local labour market. Talent mismatches can be the result of there being a gap between the skills available in the labour market, such as in the USA where there is an oversupply of entry level people when instead what employers need are experienced and high skilled workers. Talent mismatches also can be the result of skilled and qualified workers opting for jobs in specific sectors, like the financial services sector, when there are shortages in other high value professions like engineering and chemistry — as is the case in France (and the USA) at chronic levels.
  • Educational Flexibility: The local/national education system’s ability to provide students with the vocational knowledge and skills that employers need and its ability to adapt to the changing/future needs of employers. This is especially true for students’ competence in numeracy, literacy, science and computer literacy (and analytic skills).
Where talent management is concerned, then like what she said!
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