Will Your Organization Survive the Coming Talent Shortage?
Jan 24, 2019
The U.S. Bureau of Labor Statistics predicts a shortfall of 10 million workers by the year 2010. When that time arrives in just a few years, will your organization be ready? That depends on what actions your leadership is taking today. Most CEOs mouth the phrase, “Our people are our most important asset,” but few act upon it.
Employers around the world are experiencing the impact of an international shortage of knowledge workers. Here are a few examples:
- China: To make the move from manufacturing to services, China must raise the quality of its university graduates (McKinsey Quarterly, Diana Farrell and Andrew J. Grant, 2006, no. 4).
- India: To ensure its offshoring future, the country must not only produce more top-quality engineers but also show the world the depth and quality of its talent in other fields and in cities beyond Bangalore and Mumbai (McKinsey Quarterly, Diana Farrell, Noshir Kaka, and Sascha Sturze, 2005 Special Edition, "Fulfilling India’s Promise").
- Looming talent, skills gap challenges HR: The impending labor skills crunch offers HR professionals a prime opportunity to demonstrate strategic value (Society for Human Resources Management, Susan Meisinger, October 2005).
As a recruiter and head-hunter, my experience confirms the concerns expressed by employers around the world. There is an increasing demand for knowledge workers. The demand for engineers and medical professionals outstrips the supply. Nearly every classification of highly skilled and knowledge-based worker is experiencing a demand-originated pull on compensation packages.
Today’s predicament reminds me of a similar situation that arose in the housing market in 2001–2003 in Houston, Texas. I was looking for a townhouse in the inner city and found the perfect place. Unknown to me, there was a “housing frenzy” in progress. I made a respectable offer, just a couple of thousand dollars below the asking price. The realtor warned me that the market was “hot,” but I thought that if my offer was declined, I could always increase it. Wrong! The house sold the next day to a buyer who offered five thousand above the asking price.
The same situation is occurring today internationally in the skilled labor market. Employers are offering workers higher and higher salaries and even signing bonuses to lure them away from their current employers or other on campus recruiters.
So, what should your organization be doing today to acquire the manpower it will need tomorrow? Here is a five-point strategy that will position your organization to succeed:
1. Develop a work-force strategy. For years the world’s largest corporations—the GEs and AT&Ts—have recognized the need for a strategy to create congruency between the number and skills of people needed to achieve their goals. Smaller organizations have bought in to the need for goals and planning for the future but have failed to coordinate their strategic growth plans with the number and kinds of people needed to accomplish their goals. Don’t fall behind your competition because you’ve planned only for the number people needed to sustain the status quo. Develop a parallel people/skills plan that accommodates planned revenue growth.
2. Identify key positions and clarify duties and expectations. There is an insidious disease that leads to turnover and diminishes productivity. I call it “job fog.” Job fog occurs when expected outcomes are unclear; people aren’t effectively informed of their specific job responsibilities. The remedy is to develop a one-page, performance-based job description that clearly defines its duties and responsibilities, the “mission critical” outcomes expected, and the breakthrough outcomes that you would recognize as superior performance.
3. Identify the competencies that define an “ideal candidate profile.” Once there is clarity around expectations through the performance-based job description, the “fog” will clear and you’ll be able to see what competencies are essential to the job. This allows you to define the individual who would likely be a super performer in the position. This definition of competencies should go beyond simply defining the experience, education, and special skills required; it should also include “soft skills” such as emotional intelligence, motivators, and values. It is often said that people are hired because of their “hard skills” but fired because of their “soft skills.”
4. Create a 100-day plan. Take the time to address the early stages of employment for a new employee or an incumbent in a new job. Provide a track for them to run on. Many people fail because they simply get off on the wrong foot. Make sure they are know who to contact for information within the organization and how the corporate culture functions. After three months, schedule a feedback session to discuss how they’re doing. Remember: listen, don’t tell.
5. Assign a Mentor. Identify a mentor who has the specific experience and skills the new hire needs to develop. Make sure the mentor and the employee are a good match from a personality viewpoint. I have seen many employees “blow up” because they have been assigned a mentor whose personality clashed with his or hers. Don’t ask the person’s supervisor to act as mentor. There is too much conflict of interest there. Instead, assign someone from another department or discipline who has experience in a similar role.
This simple five-point strategy will significantly enhance employee quality, productivity, and retention rates. In all, you will distance yourself from your competition and set the table for you to “feast” on your organization’s achievements while your competition is “starving.”