Unemployment continues to climb, rising globally to 202 million unemployed people this year, while 50% of CEOs around the world simultaneously say it is becoming harder to fill vacancies. With each unfilled opening resulting in company losses of thousands of dollars per month, how can we reconcile talent supply and demand more effectively?
At the same time that companies are having trouble finding skilled workers, there are growing pools of untapped talent.
In March 2012, unemployment reached 10.9% in the Eurozone and 8.3% in the United States, translating into 40 million unemployed people. At the same time, a majority of CEOs paradoxically say they struggle to find suitable candidates to fill job openings. In 2011, 30% of US companies had job openings that went unfilled for more than six months. It seems that labor markets are suffering from a skills gap — a mismatch between the skills that companies need and the skills that labor markets are providing.
Efficient talent management strategy in three steps:
1. Quantify the need for talent: What are the current number of leaders, recruitment, promotion, and defection rates, as well as the factors likely to affect these rates in the future? What will each unit, region, or functional area need in terms of skills in one, three, five years time? Managers should align basic HR metrics with company strategy, and identify current and future hard-to-fill positions. Objective: inspire a proactive approach to talent development globally among managers, by encouraging managers to take the initiative to train/retrain/act as mentors.
2. Draw from untapped talent pools: Senior workers are experienced and skilled and represent a growing portion of the workforce — powerful points in their favor that employers seem to be slow in recognizing. The challenge is changing company mindsets, including reluctance among younger managers to supervise employees more experienced and skilled than themselves. At the same time, to make more effective use of younger talent, business leaders can work with educational institutions on aligning course offerings with the skills that companies need.
3. Offer competitive salaries and invest in training: Higher demand means that companies may need to increase wages. In 2010, to counter the mass exodus of its employees to Facebook, Google decided to increase the salaries of all of its 23,000 employees by 10%. Today, Google engineers are some of the past best paid in the industry. Another solution: hire applicants who are close to being qualified but require a reasonable amount of on-the-job training.
Business leader testimony:
In 2011, Infosys invested over $240 million, or 4% of their yearly revenues, in training and education. In partnership with 400+ engineering institutions across India, the Campus Connect Program was created to raise the employability of engineering graduates.. According to the McKinsey Global Institute, the IT consulting firm is “one of the world’s biggest and most effective training institutions, providing training to over 45,000 employees every year.”
Read our dossier
The skills gap
Reconciling talent supply and demand
Business Digest no. June 2012.
A synthesis of several publications, accompanied by an interview with Srikantan Moorthy, senior vice president and group head, Education and Research (E&R), Infosys Limited, May 2012.