Hiring talented people has never been easy. Unfortunately, it’s about to become even more difficult as global talent gaps widen across numerous industries such as manufacturing, construction, and health care. Without enough talented employees, organizations will be hobbled and unable to compete—even if their financial coffers are full. The shortage of highly skilled professionals not only will make managing out of the downturn more complicated, it also will threaten economic prosperity worldwide. To sustain economic growth, the U.S. will need to add more than 25 million workers by 2030; Europe will need to add more than 45 million. Indeed, 70 percent of German employers are already hard-pressed to find the right people.
Simon Targett, editor-in-chief of The Boston Consulting Group, spoke with Rainer Strack, a BCG Fellow and senior partner and managing director at BCG, about what it takes to attract top talent, how to address the new realities of talent mobility, and how to cope with the most underutilized segment of the global workforce—women.
Simon Targett: You just finished working on the report Global Talent Risk—Seven Responses with the World Economic Forum (WEF). According to that report, the competition for talent is intensifying as the talent gap grows wider. What will it take for companies to lure the world’s best and brightest? And then to retain them?
Rainer Strack: To attract talent, companies must build their brands. Ask yourself, “How can we become the company of choice?” The process is similar to the one used to build customer loyalty, except talented individuals rather than customers are the target. Just as with attracting customers, you have to deeply understand the potential employees you want to attract and market directly to them, wherever they are in the world. But that’s only the first step. To retain top talent these days, companies need what we call a “talent trellis.” Many people are no longer interested in the one-way, eyes-forward march up a management ladder. A trellis, in contrast, offers a variety of customized vertical and horizontal career and education pathways.
The report says that globalization is fueling talent mobility. So will there be a larger number of migrant workers?
Well, we are indeed seeing the growth of an internationally mobile, professional class of workers. But geographical migration is only part of the story. The talent shortfall around the globe cannot possibly be filled with migrant workers. That is why we expanded the concept of talent mobility to include nongeographical migration, or virtual mobility. In a networked world, a considerable portion of corporate work can be completed off-site. This transition supports a performance-based work culture that is focused on results rather than on physical presence in an office. So, we will see more migrant workers, but we will also see a larger percentage of professionals working virtually for companies in other locations. We will also see more companies exploring virtual work opportunities for employees abroad as well as setting up short-term assignments between business units and geographies.
And that’s not all. Besides geographical and virtual mobility, the talent market requires intellectual mobility. People will need to reinvent themselves by changing careers multiple times. This is one reason that we need better development opportunities in companies, including job rotations, support for lifelong learning, and so on.
In the WEF report, strategic workforce planning is the first of the seven responses outlined to address the global talent risk. Why is it so relevant and applicable now?
Well, there is no time to waste. Strategic workforce planning means modeling labor supply and demand for different job families to understand current and future imbalances and develop strategies for addressing them. As you know, organizations face a huge talent risk right now: the risk of lacking the capabilities they will need to compete or to grow. One reason for the shortfall is that global trends such as sustainability and product customization are changing the nature of jobs; and as jobs change, so do the skill sets in highest demand. Of course, demographic shifts in the Northern Hemisphere are another reason.
It takes years to train highly skilled professionals in industries ranging from health care to mining. Unless they plan now, companies and countries will not have the human resources they need to pursue their strategies for growth. They won’t have the quantity of resources they need, and they won’t have the quality either, in terms of educated and prepared employees.
In the last few years, high levels of unemployment have fueled protectionist attitudes and anti-immigration policies. Why is it so important for governments to attract talent now?
As we’ve said, their economic prosperity depends on having enough people with the right skill sets. There is not a country in the world that has the talent it needs.
Easing migration policies is part of the answer—it takes time to build the flow of migrants into a country. Just as important, countries must build a brand, as companies do. They must ask, “How do we become the location of choice?” After defining their core proposition, values, and competitive advantages, countries need to promote themselves globally. Options include social media, hosting international events, opening informational centers abroad, building diaspora networks, and providing incentives for migration. Students are an obvious target. Countries like the U.S. benefit from being a magnet for bright students—but more attention needs to be paid to keeping those students in the country after graduation. Another increasingly popular strategy is to attract citizens home, so that the home country benefits from all the skills and experience that its expatriates learned while abroad.
You also talk in the report about pools of underutilized talent, women in particular. What should companies do to tap into these resources?
First, companies have to recognize the value they would gain by targeting women. The talent is right there, outside their door, if only they were willing to find a way to tap into it. Women represent approximately 55 percent of college graduates worldwide. Yet, due to cultural restraints, many have difficulty entering the workforce or returning to it after having children. Likewise, highly educated immigrants may not be using their skills because employers don’t know how to evaluate their resumes. Human-resource strategies have to be changed to target these pools of underutilized talent. Then the barriers that keep these valuable resources out of the workforce must be knocked down. Child care, flextime, language courses, and virtual work are all options here. And finally, drawing in these resources requires an inclusive culture that celebrates the diversity of experiences and strengths.