Retiring workforce - Deloitte survey

Looming talent crisis signals need for organisations to employ new strategies for talent management

Impending baby boomer retirements, a widening skills gap and outdated approaches to talent management are combining forces to produce a ìperfect stormî that threatens long-term business performance, according to a new survey conducted by the Human Capital practice of Deloitte.

In a global survey, 69% of the 1396 human resources practitioners surveyed say attracting new talent poses the greatest threat to competitiveness, followed by the inability to retain key talent (66%) and incoming workers with inadequate skills (34%). These survey findings are underscored in a Deloitte research report, ìItís 2008: do you know where your talent is? Why acquisition and retention strategies donít work.î

ìDeloitteís new research points to an inescapable conclusion: the widening skills gap is a global phenomenon, particularly among the categories of key workers who disproportionately drive an organisationís performanceî said Ashley Unwin, a partner in consulting at Deloitte. ìThis trend will leave behind companies that do not begin to rethink their approach to talent management.î

Draining of the global labour pool

Over 70% of respondents surveyed by Deloitte confirmed they were experiencing, or expected to experience, a shortage of white-collar workers. Global demographic changes show that the number of 15-29 year olds entering the job market is steadily contracting, while growing life expectancy is further contributing to the problem.

Worryingly, only 13% of respondents identified approaching baby boomer retirement as a concern, despite overwhelming evidence indicating a large exodus of experienced staff from the labour market in the next three-five years.

ìRetirement legislation is under review in some countries but the current situation sees skilled workers continuing to leave their profession or trade around late middle age and too few people are joining the workforce to fill their place,î says Ashley Unwin. ìGovernments are able to partially alleviate the depth of talent pools through policies on immigration, taxation and education but their impact is likely to be superficial in the face of global working population forecasts.î

The survey found the level of significance accorded to recruitment and retention of able staff was consistent across every region surveyed, irrespective of the size of the organisation.

Almost half (46%) of the survey respondents stated that demographic changes and the impending skills shortage had been discussed at board level and most identified a clear link between talent management and business performance. 54% believe talent management issues will impact their overall organisational productivity and 40% say it affects the firmís ability to innovate. 33% acknowledge it will limit their ability to meet production requirements and fulfil customer demand.

Sabri Challah, a partner at Deloitte observes: ìIt is encouraging to see that so many organisations have discussed the impending skills shortage at board level. Given the potential impact on business performance, it is essential that board-level commitment is gained to help drive rapid change to talent management strategies.

ìFirms must adapt their talent-management strategies quickly, so that they can continue to attract the best people, nurture them to help maximise their contribution, and retain them, rather than lose them to competitors.î

Ashley Unwin concludes: ìCompanies can avoid sustaining a direct hit from the looming talent crisis by rethinking and reinventing their talent management processes into a well-designed talent strategy that drives productivity and differentiates a company from its competitors.î