HR RAGING DEBATES

8 thought leaders

weigh in on industry hot topics

We've gathered some of the brightest minds in Human Resources.
See their opposing views on topics ranging from performance
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Question 1

Talent Shortage – Really?

There have been several news reports in recent years about a lack of skilled workers across a number of key industries and yet many “employable” people are out of a job. So is there really a talent shortage or is this simply a lack in HR’s ability to effectively source the talent out there?

Henryk Krajewski (@buildvalue) says:

The talent shortage is real. And — the lack of talent remains acute despite relatively high levels of unemployment that still exist in many developed countries. Indeed, many of us assume record unemployment levels mean there are fewer job openings. Actually…there are plenty of jobs.

Based on data from the US Department of Labor job declines are coming in lower skill occupations, whereas job openings — approximately 3 million in the US alone — tend to be in higher skill occupations. This does NOT illustrate a lack of job seekers, but rather a lack of the right talent.

This fundamental mismatch between talent supply and talent demand puts pressure on organizations to attract and retain top talent like never before…at the same time demographics show the raw number of working age populace is set to decline dramatically over the next 40 years. Uh oh.

And yet I don’t often hear CEOs and executives discussing the implications in terms of risk to their business. Leaders should routinely ask: “How will we compete and differentiate?” “Who will lead our innovation?” “What geographies will we operate in and will those regions have an adequate talent supply?”, and “How important is access to talent to our ability to generate consistent returns over a consistent period of time?” These discussions are especially important to publicly traded companies who, by virtue of their relationship with their long term shareholders, must consider business risks far into the future.

Political leanings aside, it’s instructive to note that during the Last Democratic National Convention, Bill Clinton had this to say about the talent mismatch issue: “But already there are 3 million jobs open and unfilled in America…mostly because workers don’t have the skills to do them. The old economy is not coming back; we’ve got to build a new one!”

How important is access to talent to our ability to generate consistent returns over a consistent period of time?

Dominique Jones (LinkedIn) says:

Even though there are reports out there to support the contrary, I really don’t think there is a skills shortage. In fact, I believe there is a great deal of highly skilled talent out there and that the “perceived” shortage is actually the product of what employers are looking for and how flexible they’re willing to be in terms of their hiring requirements and philosophy — and what they’re willing to do to find the talent.

For example, if employers restrict their talent search in terms of specific geography or location, they’re already working with a limited supply of candidates and the “skill shortage” could become a serious issue.  However, if they opened their search to different cities, they would have a larger pool of individuals from which to choose.

Employers also can’t afford to overlook the fact that the talent-attraction game requires creativity.  Competition for top talent can be fierce, which means you need to have a good strategy in place to build your employment brand and attract the right people to the right job. And I’m not talking about a one-size-fits-all strategy.

You need to understand the jobs you’re sourcing and where the best candidates are, and then adapt your strategy accordingly for each function. For example, if you want to recruit   software developers, you need to understand the online communities in which they participate (e.g., indeed) and become part of those communities.

Employers also can’t afford to overlook the fact that the talent-attraction game requires creativity.

Laurie Bassi (@GoodCompanyBook) says:

As a card-carrying economist, I have an aversion to the term “shortage.” It’s a misnomer that really means “We don’t want to pay the price necessary to get what we are seeking.” So when firms say they are experiencing a talent shortage, what they’re really saying is they’re unwilling to offer sufficiently high compensation to attract and retain folks with the necessary skills.

For decades now, the level of investment in workplace education and training has been unsustainably low (at least in the U.S.). When faced with the “build versus buy” decision, too many firms have opted for “buy.” This approach results in a zero-sum game; firms hire skilled folks from the competition, but few skills are being built. So “talent shortages” and high unemployment go hand-in-hand.

The primary problem is not “simply a lack in HR’s ability to effectively source the talent out there” — although that could certainly be a contributing factor. Rather, it’s that firms are unwilling to provide either the necessary skill training or the wages required to attract the skills they’re seeking.

Some firms will, of course, argue that training provides employees with the means to leave — if they want to. And, to a certain extent this is true. But for the vast majority of employees, voluntary departures typically arise when employees want to get out of an undesirable work environment (lousy boss, few opportunities for advancement, poor work-life balance, or other related issues). Create a positive, dynamic work environment and employees will want to stay — even when competitors are trying to hire them away.

In short, I have little patience for discussions of “talent shortages.”  Those firms that make these arguments are presenting themselves as victims of a problem they’ve created themselves.

Create a positive, dynamic work environment and employees will want to stay.

Jon Ingham (@joningham) says:

Really? Yes, though it’s important to remember that in most companies, this isn’t the most significant problem we face. For example, a yet greater constraint is often the engagement of existing staff to fully leverage the skills they have. And probably an even bigger barrier is the ineffectiveness of our organisational structures which stop skilled, motivated individuals contributing in the way they would like.

Plus we have the problem that in most businesses it is the team and community which provide performance, not just the individuals themselves. So it’s only when we have engaged, organised talented teams, working in an enabling culture — when we understand how to use the talent that we have — that performance will result.

Still, talent is part of this broader requirement and there are definitely some growing mismatches between the people and skills available in our working age populations around the world, and what businesses increasingly need their workforces to provide.

Our companies’ workforce planning is still often quite poor but is generally much, much better than the planning we do at a national level (with a couple of exceptions like Singapore and maybe the UAE). So despite high levels of unemployment in many countries, when companies say they can’t find the people they need, they often have a point.

I don’t think we can wait for governments and professional bodies to correct this situation however. So HR does need to step up, be more strategic and creative, and find new ways to deliver talent into our businesses. Some of this is about taking a longer-term perspective, which we often already do in some sectors like energy and pharmaceuticals. But this approach need to be extended into other areas too, particularly those sectors like technology where this long term planning is most difficult to do.

In most businesses it's the team & community which provide performance, not just individuals.

Meet the Experts

China Gorman

For more than 25 years, China has held strategic business leadership roles in human resources professional services organizations. Currently CEO of the CMG Group, a consultancy supporting solutions providers in the human capital management sector, she is a sought-after speaker, writer and thought leader in the broad human resources marketplace. Data Point Tuesday at ChinaGorman.com has quickly become one of the most-read HR blogs.