Posted on 02/17/2005 9:25:25 AM PST by qam1
RISMEDIA, Feb. 16 – Impending Baby Boomer retirements, a widening skills gap driven by declining educational standards, and outdated and ineffective approaches to talent management are combining forces to produce a "perfect storm" that threatens the global business economy, according to Deloitte Consulting.
In a recent U.S. survey of human resources executives nationwide conducted by Deloitte Consulting, more than 70 percent of the 123 respondents say incoming workers with inadequate skills pose the greatest threat to business performance over the next three years, followed by Baby Boomer retirement (61 percent), and the inability to retain key talent (55 percent).
These survey findings are underscored in Deloitte Research's report, "It's 2008: Do You Know Where Your Talent Is? Why Acquisition and Retention Strategies Don't Work."
"The overwhelming accumulation of data, including Deloitte Consulting's new research, points to an inescapable conclusion: the widening skills gap, particularly among the categories of workers who disproportionately drive companies' growth and performance, is a global phenomenon that will create unprecedented challenges for businesses," said Ainar Aijala, vice chairman, Deloitte Consulting and global service area leader of Deloitte Consulting's Human Capital practice. "The confluence of demographic and social trends -- the full force of which will begin to be felt in as little as three years -- will leave behind companies that do not begin to rethink and redesign their approach to managing human capital."
In only three years, the first wave of Baby Boomers will turn 62, the average retirement age in North America, Europe and Asia. According to the Deloitte Consulting survey, one-third of U.S. companies expect to lose 11 percent or more of their current workforce to retirements by 2008.
"While the 'greying' of the workforce will independently create large vacancies across industries, additional factors, such as low birth and immigration rates in Europe and the single-child policy in China, present further perils to companies worldwide," explains Aijala. "Companies will also continue to face inadequate skills among an increasingly diverse, virtual, global, and disengaged workforce."
Life sciences, energy and the public sector will be the hardest hit with manufacturing, consumer business and financial services industries close behind. For example, Canada, Australia and the U.S. could lose more than a third of their government employees by 2010. The National Association of Manufacturers revealed in a recent survey that more than 80 percent of U.S. manufacturers face a shortage of skilled machinists, craft workers and technicians. Further, the U.S. Department of Education predicts that 60 percent of new jobs in the 21st century will require skills possessed by only 20 percent of the current workforce.
Among the many threats affecting the global workforce over the next few years, the exit of "critical talent" could be the most damaging. Deloitte Consulting defines "critical talent" as the individuals and groups who drive a disproportionate share of their company's business performance and generate greater-than-average value for customers and shareholders. These individuals are "critical" to their company's ability to meet strategic goals and objectives.
"When we talk about critical talent, we are not necessarily referring to the 'A players' or senior executives," explains Mike Fucci, principal and U.S. leader of Deloitte Consulting's Human Capital practice. "Critical talent represents those individuals who possess highly developed skills and deep knowledge of not just the work itself, but of how to make things happen within a company, such as the couriers within package delivery companies who have daily client contact and direct knowledge of the supply chain, or researchers and clinicians within drug companies."
Unfortunately, few organizations have talent management processes in place to address the impending workforce shifts that will negatively impact critical talent segments. In fact, only half of the organizations surveyed by Deloitte Consulting have identified a list of the critical skills they need for future growth. Even more alarming, more than a quarter of respondents say defining critical skills as a workforce tool is "unimportant."
"Employers need to focus quickly on understanding which skills will make or break their business, where those skilled individuals will come from, and how to keep these workers engaged and committed within the organization," Fucci cautions. "Only those organizations that respond swiftly and plan effectively will find themselves on top of these new challenges."
Traditional approaches to talent management frequently focus on acquisition and retention. When the talent pool tightened in the 1990s, companies responded by offering rich compensation packages and "hot skills" bonuses. The end result, however, was often disappointing -- recruiting costs soared while investments in training languished. In addition, such compensation packages were often matched by competitors, contributing to high attrition rates of talented personnel.
Despite the changing landscape, organizations still plan to increase their investment in traditional talent solutions for 2005. Approximately 60 percent of survey respondents plan to increase experienced employee recruitment, while 42 percent plan to increase campus recruitment. Additional investment will also be given to rewards packages for experienced employees (39 percent) and new recruits (30 percent).
"Acquisition and retention strategies remain important parts of talent management. Such strategies, however, attend to the "end-points" of the process and only offer a quick fix to these new workforce challenges," says William Chafetz, national practice leader of Deloitte Consulting's Organization and People Performance Services. "To survive the changing labor landscape, organizations must employ more comprehensive talent management strategies that reflect an understanding of critical workforce segments and satisfy the conditions those employees need to succeed."
According to Deloitte Research, talent-savvy organizations build strategies around what matters most to their critical talent -- their personal growth or development, their need to be deployed in positions and assignments that engage their interests and curiosities, and their connection to others in ways that drive performance for the company as a whole.
Many of the companies Deloitte Consulting surveyed seem to understand the importance of development and training their employees, with nearly three- quarters (70 percent) of respondents planning to increase investments for mentoring and coaching in 2005, e-learning (64 percent) and classroom training (49 percent). "It is a great sign that most organizations are committed to strengthening the skills and knowledge of their workforce, but they need to do more," states Chafetz. "No single part of the talent management process can sustain an organization or generate superior business performance on its own - organizations must adapt a new way of thinking and use critical talent as a competitive advantage and a long-term investment."
Quote: If something costs less down the street, don't you go buy it there? You do not shop around for the best price?
I realize this is a global economy but doesn't somewhere US companies have any loyalty to US workers. Even a smidgeon??
You mention gov. regulations are a factor in business cost and I agree 100%.
However lets say for argument purposes a US company has zero regulations to contend with on american soil. However the wage for a US worker is $20 and they can go to China for 1.00 per hour. They are going to go to china my friend. It is all about profits..which it should be, but again, should there not be any loyalty whatsoever to american workers. (Even with companies that get money from US taxpayers.)In todays age there is not.
You free traitors that think your job cannot be outsourced (and tell the ones that lost their job to suck it up-be man etc, move to another local etc )should read a report that was on this site today or yesterday. China even wants to get into financial services.
Architecture and other "outsource proof" jobs are next.
We are going down a lsippery slope.
Here here!!!
I am fully aware of the problems with displaced workers, I happen to be one, lost my job due to "global competition", even though this happened, it does not change my view one iota.
First, my standard of living has never been higher, I do not care about where companies do things.
Second, I have spent the time and effort to make myself marketable in other industries where I am less susceptible to the global forces. Does that mean there is no risk, of course not, but this idea of company security/loyalty is a pipe dream, you are a free agent. Now are there advantages to companies having this trait? I believe there are, this is the gist of the article IMHO, but it is their decision.
I just do not get it, but it is human nature, people look at the world as they want it to be, and plead with the "government" to fix it if it is not. It is far more useful to view the world as it actually is.
Grrrrr. There is nothing like having your qualifications judged by someone whose only qualification is as a Human Resource "Executive".
Here's a tip, If a company has more than 1 HR Rep per 150 employees, You don't want to work there.
This is actually a good thing!
I'm amazed American companies can compete at all, Just like our government it seems all companies are loaded with useless, productivity draining positions like Team*/group leaders, Efficiency experts, Sensitivity trainers, Quality Assurance, Bloated HR Dept's and of course Consultants.
If we export this nonsense to other countries, maybe we can drag them down to our level. Or when the baby boomers retire and we get rid of these worthless positions then any so called labor shortage problem will be solved (Though unfortunately these people seem to be entrenched, You never see them get laid off).
* - I fully support who ever the person that came up with the concepts of "Teams" be publicly hung.
"We are all entrepreneurs now."
better education? to hold what jobs? service sector jobs? people are already tuning out of colleges and increasingly going to vocational schools. even if we eliminated all litigation in the US, and dropped all our environmental laws - we still could not compete with wages in china. their low standard of living and artificial currency peg guarantees them the advantage. what we should be doing is using tariffs to level the playing field.
Not if the jobs are already outsourced, they won't.
No chance of being fired if you're never hired.
For some reason, I can't visualize cello players showing an interest in rocket design. There's so much dead wood in corporate worlds and academia that many are paid to retire, resign or just go away.
Quote: Are you willing to pay $50,000 for your Saturn 2 door
Saturns are made in Tenn with AMERICAN workers and some of their models sell for less than 20K. Imagine that.
I've actually never had that experience, but I don't doubt you are right!
You are the exception rather than the rule.
Very true. Now, I want to ask a question. I am going to get slammed for this one. Why does our cost of living have to be so high? I don't want to live in a mud hut or whatever the Chinese live in so that they can survive on such low incomes, but why the disparity in pay? Why can they make it on 20 times less money/hour than we can?
Boy, you said it. This has got to be the worst group I've seen yet. I wouldn't hire any of them but what I've seen so far. It doesn't matter anyway, because the show isn't about the contestants anymore anyway. It's an hour long commercial for Trump and his Corporate friends.
They don't want old guys becaues old guys are too smart to jump through hoops whenever an employer dangles a carrot.
Perhaps the problem is not that there are too few skilled workers.
But that there may be too many skilled jobs for the percentage of geniuses in America's portion of the world population.
We should therefore concentrate on solutions to reduce the number of skilled jobs.
In the short term, this may be painful to some employers, but in the long term it better for everyone.
Disclaimer: Opinions posted on Free Republic are those of the individual posters and do not necessarily represent the opinion of Free Republic or its management. All materials posted herein are protected by copyright law and the exemption for fair use of copyrighted works.