As executives are struggling to move beyond the economic turmoil of the past few years, many business leaders are re-calibrating their talent strategies to meet the shifting demands characterized as the "new normal."
While the inclination may be strong to revert to talent strategies that served them well prior to the recession, many executives seem to recognize that the forces shaping future talent needs, including globalization and an aging workforce, did not diminish during the downturn. Instead, these trends continued to intensify, now requiring business leaders to adopt new talent strategies to position their companies for success.
Recent survey findings underscore the need for a new approach. Deloitte's new survey series, Talent Edge 2020, explored trends in talent management that are expected to unfold in the decade ahead. The first survey in this series queried over 300 senior business and talent executives across industries at large companies worldwide.
One key and surprising finding is that high unemployment rates have not generated the talent surpluses many executives expected. On the contrary, many executives predict talent shortages across key business areas, particularly those needed to drive innovation and growth.
Let's start with Research and Development: nearly three in four executives (72%) surveyed predict talent shortages in R&D, and more than half (56%) of respondents anticipate shortages in executive leadership. The expected R&D shortage is particularly acute in industries where product innovation is critical.
Among technology/media/telecom companies surveyed, 40% predict a severe shortage of R&D talent, while 39% of the consumer/industrial products companies and 37% of the life sciences/health care companies surveyed foresee severe shortages in this area.
Even with high unemployment (reported at 9.0% in the U.S. in early 2011), it's clear that the competition for talent continues to heat up—fueled by the demands of an economy that grew even more global and more competitive during the recession.
The talent paradox of having an abundance of willing workers but a shortage of people with the necessary and desired skills is expected to pose significant challenges for companies competing in the global marketplace. Those that wish to succeed must devise new strategies for getting the right talent in the right place at the right time.
Another recent survey corroborated these trends. Despite high and persisting unemployment, almost half of the CFOs surveyed say their companies are finding it more difficult to acquire sufficiently skilled people than they did five years ago. Roughly half of CFOs citing difficulties blame changes in staffing needs, and the other half say their regular staffing profiles are getting harder to find. Energy/resources CFOs indicate the greatest difficulty in filling open positions, with nearly 65% citing hiring concerns.
In contrast, only 21% of CFOs are finding it less difficult to acquire skilled talent—half because their staffing needs are changing and half because their regular staffing profiles are getting easier to find.
Some industries are faring slightly better than others.
More than one-third of retail/wholesale CFOs say hiring is getting easier because their staffing needs are changing; one fifth of technology CFOs agree. CFOs in the financial services industry, which has been particularly distressed by the global financial crisis, are unique in reporting that their regular staffing profiles are getting easier to find (28% make this claim).
Interestingly, if you remove the effects of financial services, only six percent of CFOs are saying their regular staffing profiles are getting easier to find.
What does this mean for finance and business leaders? First, hitting the reset button back to 2007 will not help reshape talent strategies to compete in the decade ahead. The fundamental challenges of globalization, the digitalization of work, changing demographics, and shortages of critical skills (manifesting itself in poaching wars and higher wages for hard to find specialists and leaders) are part of the new normal.
Now is the time to refresh talent and retention strategies making sure you have a clear understanding of your critical talent, what's important to them, and that you're delivering a combination of financial and non-financial benefits that they value. In the shift to the new normal in talent, it's time to put your foot on the pedal.