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Are You Prepared for the Talent Shortage?

Key Concept ~ Competing for talent is always a challenge for small firms.  The competition for talent in the 21st Century is already accelerating.  Entrepreneurial startups may want to rethink how they attract, recruit, and retain talent going foward.

The global staffing firm Manpower Group™ issued their 2011 Global Talent Shortage Survey (Manpower Global Talent Survey 2011 PDF) recently in which they identified that 52% of U.S. firms are struggling to find adequate talent for open positions.  In all of the Americas only Brazil, at 57%, is experiencing a greater shortage of talent than the U.S.  I don’t know about you, but I find this to be quite a sad commentary on the state of competitive fitness in the U.S.  There are few signs the talent shortage is about to abate any time soon.  In fact, most executives are anticipating the opposite; as we continue to move further away from the Great Recession the competition for talent will continue to heat up.

So, what are companies doing in response?  According to the survey, not much. In response to the shortage of talent (particularly for technicians, sales representatives, and skilled trade workers…the top three areas of talent shortfalls) only one out of five companies is increasing their training and educational programs for their associates.  Only 6% are pro-actively working with local schools and educational institutions to help address the skill gap.  More companies (25%) are changing their recruiting strategy than are looking to change, or even evaluate, their approach to how they lead and develop talent.

What was really startling was the perception held by executives as to the level of impact not filling key openings in a timely manner has on stakeholders (customers, investors, associates, etc.).  Only one out of five executives surveyed felt not backfilling a critical, open position has a high impact on constituents.  The survey goes on to identify 43% of executives believe leaving a position open has little impact, no impact, or didn’t know if open positions had any impact whatsoever on stakeholders.

This certainly isn’t the impression I’ve been getting from the research that continues to emerge from companies like McKinsey & Co., Gallup, RogenSi, Martitz Research, and other global consultancies.  The disconnect this points to is nothing short of astounding.  Hopefully, entrepreneurs, who tend to be closer to the front lines of day-to-day business, recognize just how disruptive this can be for the associates that remain onboard.

We collectively seem to have very short memories.  It was just fourteen short years ago when we went through the last severe chase for talent.  I was running a global service business in the biotechnology/pharmaceutical sector for a major corporation at the time.  The dot.com boom was in full swing, and places like the San Francisco Bay Area, a hotbed for both the high tech and biotech industries, had an unemployment rate of around 1%.  Our own customers were aggressively pirating our technicians away from our business.

Technicians that required six months of training and education before they were fully capable of conducting their work within the highly regulated biopharmaceutical industry.  Even if I could find potential technicians worth training, the skyrocketing wage scale and cost of living in the Bay Area created remarkable barriers to backfilling.  It became so severe, we would dispatch technicians from as far away as Mexico City and New Jersey for a week at a time to support our customers in Northern California.

What’s coming next will make that talent shortage pale in comparison.  More than 10,000 Baby Boomers are retiring every day.  This rate of retirement will continue for the next seventeen years!  Workers from the Gen X and Gen Y generations are simultaneously introducing an entirely different set of expectations regarding their careers.  They are far more mobile than their Baby Boomer predecessors.  They expect opportunities for professional development and a greater sense of purposefulness as part of their employment.

They witnessed leagues of loyal Boomers work for corporations for decades only to be callously displaced at the next downturn.  The typical length of engagement for these younger workers, the ones with the adaptive technology skills companies covet so dearly, is around three years.  Perhaps this is part of the reason companies are so hesitant to provide training and employ professional development plans?  I’ll hire it when I need it seems to continue to be the prevailing attitude, unfortunately, it may not be there when you go looking for it.

Many companies are holding fast to their slash and burn harvest mentality.  Of squeezing every bit of value out of fewer and fewer human resources.  Of expecting more and offering less in return.  The survey and research results of the past few years are clearly demonstrating the effect of this on the workforce.  The majority of workers are feeling over-burdened, disengaged, and apathetic towards their employers.  The social contract, one’s whose expectations were forged in the post-WWII era, between employers and employees is broken. Talent holds the cards now, and it will be talent that will renegotiates this relationship going forward.

This creates an opportunistic environment for entrepreneurs.  Create a better working experience, and the talent will very likely find your firm, however small, an attractive alternative to life in corporate settings.  As an example, my first national sales management position was with a small company in Massachusetts.  We were anything but an attractive employer for top, seasoned sales talent.  We were, however, a wonderful place for high potential talent to germinate, get a few years of real, business-to-business sales experience in the life science market, and move on to a top-notch gig with a major company in the sector.

I chose attitude, intelligence, and the desire to grow professionally over experience.  I chose to train my sales team to sell the way I knew, from my own sales experience in the sector, would work.  I knew going in, I had to catch the talent on their ascent, and provide them with the training and experience they needed to get to where they wanted to go.  I knew my place in the career food chain, followed this approach, and the team achieved exceptional results.  Each sales representative I hired was with us for just a little over two years and every one of them went on to six figure sales jobs with their next company.  It was a fair trade-off, everybody won because we had calibrated our expectations accordingly.

As the talent wars continue to flare up, take a step back and look at what you have to offer.  You may be pleasantly surprised by embracing a fresh perspective in what you define as talent and what you need in terms of experience.

About Dave Solomon

Dave Solomon is a serial entrepreneur influenced by Terry Murray, one of the greatest business mentors of 21 century. This Blog is an initiative to recollect the lessons of Mr. Murray and help aspiring entrepreneurs become transformational entrepreneurs

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