HR: Talent Crisis Threatening Economic Prosperity
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n inability to recruit and keep the right people, and a talent mismatch are hitting companiesÂ’ bottom lines worldwide, according to a report issued by Professional Services Firm PwC.
A significant percentage of CEOs see the lack of talent as a major challenge to the growth of their businesses, with only a minority Â‘very confidentÂ’ that they will have access to the talent that they need over the next three years.
Gerald Seegers, Director for Human Resources Services at PwC Southern Africa, says: Â“CEOs are facing a Â‘talent crunchÂ’, and itÂ’s an issue keeping them awake at night. An inability to find and keep the right people is biting, with CEOs saying the lack of talent is stifling expansion and innovation within their organisations.
Â“It is a unique challenge Â– companies are struggling to find and keep the right talent when there are more educated people than ever before and a worldwide talent pool is available to them.Â”
PwC asked nearly 1,300 CEOs in 60 countries about their priorities and how they are preparing for the future. Talent emerged as one of the biggest issues facing the boardroom. In South Africa, in-depth interviews were held with 32 CEOs from leading listed and privately-owned companies.
CEOÂ’s Feel that They Will be Able to Access the Talent they Require
More than half of South African CEOs confirmed that it was becoming more difficult to recruit workers in their industries, citing the supply of skilled candidates, changing skills needs and compensation expectations as the leading reasons for this.
Despite these challenges, 72% of South African and 85% of global CEOs remain confident that they will be able to access the talent they require to execute their companiesÂ’ strategies in the next three years. Notwithstanding such optimism, CEOs are also candid about the effect talent constraints have had on their companiesÂ’ growth and profitability in the past year, with South African organisations being significantly more affected than their global counterparts in a number of areas.
CEOs across all industries said it has become more difficult to find the skills they need, even industries within which retrenchments have taken place.
Globally CEOs say they will change their strategies for managing talent. However, only a handful has the intention of relocating operations to take account of the availability of talent. Furthermore, only a small minority plan to use acquisitions or partner with other organisations to deal with skills shortages. It is also noteworthy that more than a fifth of CEOs seem not to have really considered these options at all.
Â“Organisations cannot realise their growth objectives without the right people to make it happen. Businesses that develop a well-informed and proactive approach to strategic workforce planning have an opportunity to gain a crucial competitive edge,Â” says Seegers.
Organisations are also looking at the gap that exists to replace the baby boomer generation over the next ten years and how best to prepare the next generation for that transition. Globally only 30% of CEOs are Â“very confidentÂ” that they will have access to the talent they need over the next three years.
Talent Can be Found Within their Own Organisations.
Seegers says: Â“To face up to this crisis CEOs are turning outside their sectors for talent and they are also going deeper into their own organisations to pinpoint their future leaders and invest in their development now.
Â“This early investment can pay off in future loyalty among these future leaders, and the obvious benefits of recruiting internally and Â‘growing their ownÂ’ rather than struggling to replace from outside.Â”
Seegers goes on to say: Â“HR needs to ensure that it is responding to this talent rethink by getting the long-term pipeline right and making sure CEOs get the right metrics.
There is a big opportunity for HR in management information Â– only a minority of CEOs are getting HR management information for the measures they say are important. CEOs want to know about their talent investments beyond productivity and labour costs. Employee engagement, team performance and isolating skills gaps are difficult measurements to make, but they are critical to see where investments and innovation are working.Â”
Business News Sector Tags: HR|