Going into the global financial crisis, the business world was experiencing a massive shift as the markets moved from the West to the East. McKinsey Management Consulting firm stated that, “there was a war for talent.” Companies were growing at rates unheard of in modern business history and they were consistently breaking growth records. Then all of a sudden our attention shifted back to the West as those markets came to a screeching halt. We went from a “war for talent” to a “war on talent.” Many of the companies that were experiencing record growth are now travelling in reverse. And unfortunately, companies are shrinking as their market capitalizations are in a downward spiral. This sudden move leaves a big question looming in my mind, “What will happen after the recovery?” I am not as consumed with when the economic recovery will happen as I am with what will happen when it does. What do you think?
A few facts that were true, are true now, and will be true after the recovery:
• The markets have officially shifted from West to East.
• The majority of explosive global business growth is in the East.
• The majority of the massive downsizing (and layoffs) has been by Euro-American based companies.
• And, there are not enough potential employees in the fast-growth and emerging markets.
So, what is going to happen after the recovery? We are going to experience a talent shift. Not a talent war as McKinsey has been espousing since 1997. I declare that the war is over and it is not coming back. But, unfortunately for business, “talent” has won the war.
With all the layoffs, the shrinking of businesses and the previous “war for talent,” you may be asking, “How can I say that there will not be a continuation of this war and that ‘talent’ has won?”
To understand this, all we have to do is look at the demographics. Here is the reality: only 48 percent of the fast-growth and emerging market population are of working age. Yet they need to provide for all of the needs, business, products and services for the 5,474,500,000 people living in those markets. There is a decreasing pool of working age employees and an increasing demand for business. Workforce availability is a key resource for business growth and speed.
Simply stated, there are not enough potential employees, so they (the talent) win the war. This fact raises the question that we all should be asking, “What is going to happen after the recovery?” There is no debate that the most important corporate resource over the next 20 years will be talent — finding it, keeping it and getting the greatest performance from it. The talent reality is really bad; it is much worse than previously anticipated. And this pain will be a reality for every business. This global shortage of talent is the “after recovery” new crisis.
In the fast-growth and emerging markets, once the recovery takes place, we need to make a talent shift. The fact is that for our businesses to succeed — and probably even to survive — we must address this new crisis head-on. The businesses that are proactive and do this will win.
Next you should be wondering, “What do we need to do to make the talent shift?” Here are seven points to consider:
• Create a talent strategy
• Avoid business colonialism
• Understand emerging market talent
• Look globally for local talent
• Develop workforce skills
• Build a permanent temporary workforce
• Don’t fight in a war that is already over
When you think about making the talent shift, I beg you not to make the disastrous mistake and give it away to the human resources (HR) department. Making the talent shift is not for the HR department. Rather, it is a critical new set of business skills for every leader throughout your entire organization. The more personal effort your executives give to it, the better chance you have of making the shift and succeeding after the recovery.
Tommy Weir, Ph.D., serves as managing director of the EM Leadership Center