What caused human resource (hr) talent shortage and how to improve it?

The continuing war for talent


A surprising amount of what Shlomo Ben-Hur, a professor of leadership and organisational behaviour at IMD, writes could have come from the last century. In 1997, Steve Hankin, a McKinsey consultant, coined the term “the war for talent”, which promised fierce competition for the most promising would-be managers. Fifteen years on, today’s organisations, notes Mr Ben-Hur in his school’s research spotlight, are still hungry for talented workers. And, just as then, demographic trends, such as the ageing of Asian populations, will shrink the pool of younger workers in future while younger employees have expectations that their employers may have to adjust to meet.

There are two related problems to consider, says Mr Ben-Hur. One is that the “traditional talent deal” is no longer reliable: companies cannot invest in training for their more promising employees and expect to recoup the benefits for a decade. The other is that firms looking for talent tend to overvalue external candidates and undervalue internal ones. Taken together, the two trends make a sort of sense: an internal candidate may be ready to jump ship; one coming in from outside should be grateful for the job for a couple years at least. But imagining the most talented employees as fish only briefly caught makes it hard for companies to recognise, much less reward, their best performers.

What does this imply for MBA students? Not, unfortunately, a chance to relax. According to Mr Ben-Hur (although he fails to cite his source) only a quarter of professionals in India and a fifth of Russian professionals are considered “employable” by multinational standards. Those aspiring to executive positions from other countries might be handicapped by inadequate science training or a lack of foreign languages. The perceived lack of talent may mean that those with the highest ambitions have to do even more to prove themselves part of the crop worth considering.

But there are two practical steps MBA aspirants can take, assuming Mr Ben-Hur’s analysis is correct. One is to trade loyalty for further training: even companies with pared-down training budgets may be open to the idea of financing an executive MBA, or even just short courses, if you are willing to agree not to seek other employment until the firm feels it has been paid back. The other, for those already studying, is to keep in mind the internal problems a company can have identifying and selecting good fits. Peter Cappelli, a professor at Wharton, has written more extensively about companies underestimating how much it costs to keep a position unfilled. Even for the most accomplished graduates, much of getting hired relies on uncontrollable forces; remaining calm about that fact may make searching for a job easier.

Employers, on the other hand, have a great deal to wrestle with. Mr Ben-Hur makes a passing aside to “recent fascinating research showing that large numbers of senior leaders no longer want to be promoted further, although only a minority of them will admit this to the business”. Let’s await the follow-up; if such research turns out to be robust, companies may have to evaluate the problem of not only attracting new talent and keeping it, but getting it into the upper ranks.

Source: Economists

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