A cursory look at the job supplements of any reputable newspaper or magazine reveals there are thousands upon thousands of openings in the higher end of the employment market, be it in private or public sectors.
Certainly there is no scarcity of plum jobs in South Africa or indeed elsewhere. Is it any wonder then that highly qualified professionals in disciplines such as IT, engineering, medical, project management, banking and finance etc, are quickly snapped up.
According to the Sunday Times, vacancies advertised in its Careers supplement have increased by 39% in the fourth quarter of last year, citing research by DMA People.
DMA People notes that the increase in demand for professionals in finance and IT is reflected in the vacancies by function – 3 485 positions requiring IT specialist skills were advertised in the fourth quarter of last year compared with 238 in the first quarter. Finance-related positions increased remarkably throughout the year from 463 to 3 136.
Allan Pike of Key Recruitment says the war for talent is exemplified by the tactics being used by employers to entice and retain talent. These include sign-on bonuses, inflated remuneration packages, share incentive schemes, retention payments etc. He says the greatest challenge for companies is defining a corporate purpose that goes beyond profit-making, then sourcing personnel who are aligned to this corporate vision.
“Good people need to work towards something they subscribe to or believe in. This gives them a sense of worth or contribution to a much greater purpose than just money,” says Pike.
Branding isn't just for product In a recent article published in HR Future (February 2008) titled ‘Talent makes the rules now', Samantha Crous, Publishing Manager for the HR best practice accreditation project BEST Employers™ South Africa explains that companies have even greater challenges in the attraction and retention of talented staff today than ever before.
Crous dubs companies that participate in the annual accreditation project as ‘intelligent employers' due to their active and passionate development of their employer brand. Says Crous, “Like any brand identity, an employer brand needs to be underpinned by a robust employer offering based on what talent can actually expect when joining or remaining at an organisation."
BEST Employers™ now sees more and more companies seeking out HR best practice comparative market data which is supplied through the projects research component: The HR Benchmark™.
“Ideally, an employer should gather all the necessary facts about human capital management trends regarding issues such as rewards, recognition, benefits, training and development and then strategise the means to address areas of concern relative to the norm, and better position the company as a choice employer in the minds of talent.
“This may mean training programme changes, or revised incentive structures or no changes at all. It may well be that companies should not necessarily make major changes, but rather communicate better with staff and the talent market about its people management successes. Through this, the employer will be able to address individual employee concerns by illustrating what the company is doing right relative to the market average, and be in a position to proactively address any HR framework issues that impact individual employee concerns, rather than adopting a reactive approach to general employee dissatisfaction.”
In other words, it's no longer enough for companies to say they are a great company to work for, the time is now to accredit such statements and market the organisation using an Internationally recognised mark of employer excellence to ensure the reach of the employer brand.
Unpacking the ‘war' Phuti Tsukudu of Tsukudu Associates, a former chairperson of the South African Post Office board, says the War for Talent refers to the attraction and retention of well qualified and versed employees who fulfil critical operational roles for the success of their companies. They are - almost - the lifeline of a business.
These high quality employees place a high premium on being valued, respected and well rewarded for their efforts. Mindful of the raging war for talent, these gifted individuals always demand that their expectations and aspirations be met.
She says corporations can no longer pay lip service to talent management because it has become a source of competitive advantage. This, she says, is the reason the corporate world is moving towards placing a high premium on talent. Tsukudu maintains that corporate leaders and their human resource functionaries have to develop strategies and innovative management solutions if they were to win this war.
She says talent management is high on the corporate agenda and is seen as a critical success factor for organisations striving for competitive advantage.
Is the war for talent real? “Of course,” says Tsukudu. “Given the shift from a product economy to a service economy, talented people are a major differentiator in the service industry."
A number of factors are responsible for this unofficial war being waged in boardrooms across South Africa. These include the growth in economic activities in many countries, coupled with persistent shortage of suitably skilled personnel, the changing demographics, the work-life balance agenda and the impact of technology on recruitment and competitiveness are leading to increased competition for a limited number of individuals who are capable of making the greatest difference in organisational performance.
She adds that research conducted by the Chartered Institute of People Development (CIPD) in the UK, shows that 40% of young people under the age of 30 regard changing jobs every two to three years as being trendy.
Tsukudu explains that even during times of economic slowdown, the war for talent rages on due to lack of suitably qualified, skilled and high calibre personnel.
“This war has picked up in the past years, and one of the scale drivers of this are China and India. These two countries have a combined graduation capacity of around seven million, but their problem is the quality of those graduates. Only one in 10 in China and one in four in India meet the high skills levels their respective countries need, as well as meeting global business expectations."
As a result, both countries have to “fish for talent” in the global talent pool which is ever shrinking.
Facts and figures According to the Manpower Employment Outlook Survey, on a global scale, 41% of employers are finding difficulty in recruiting the right people, while the corresponding figure for South Africa stands at 39%. The survey reveals that globally employers continue to show high levels of hiring intentions/expectations.
In mitigating risk, Tsukudu notes that the growing shortage of highly skilled manpower will compel corporations to compete on remuneration, rewards, career prospects, attractiveness of job challenges, the strength of the employer brand etc. She outlines the following as remedies for companies to mitigate talent shortage risks:
Enhancing links with schools to ensure the growing needs of business are closely tied in with educational training policies. This can be enhanced by effective career guidance and counselling, which is a key weakness currently in South Africa
Tapping into underdeveloped sources, and investing in further training and providing opportunities for work experience
Promoting inclusiveness by effectively managing and harnessing diversity as a strategic imperative, embracing it and promoting cultural fit, as talent is highly mobile
Investing in training and development, while promoting the concept of “growing our own timber.” For it is not sustainable to keep on poaching from other organisations. Such practices just increase the recruitment budget and does not contribute to an attractive employer brand
Encouraging prolonged working life to harness the experience, skills and maturity, as well as promoting coaching and mentoring efforts across different generations
Tapping into new sources of labour and capitalising on off-shoring opportunities
Becoming innovative in attraction and retention approaches, by ensuring that retention is not an isolated strategy but an integrated one
Facilitating re-skilling/up-skilling to keep up with growing trends in technology and globalisation challenges
Investigating job redesign
Making flexible use of available talent
Considering an employment partnership
Another study conducted by Mckinsey and Company a few years back, which involved 77 countries and featured 6 000 managers and executives, concluded that the most important corporate resource over the next 20 years will be talent: smart, sophisticated business people who are technologically literate, globally astute and operationally agile.
The same report makes mention of the fact that while demand for talent goes up all the time, the supply side of the equation diminishes. This is the terrain in which hardened HR generals have to compete for scarce talent. It is safe to assume, therefore, that only battle-hardened HR practitioners will earn their stripes in the quest to ensnare key manpower.
Talent has become more important than capital, strategy or R&D, says the Mckinsey and Company website.
The war for talent is global. According to the website Fast Company, there will be 15% fewer Americans in the 35-45 year age group over the years, while the US economy will grow at a rate of 3% to 4% a year. Over that period, demand for bright talented 35-45 year olds will increase by, say 25%, and supply will go down by 15%. It is such dynamics that give rise to the war for talent.
Talent management is critical to every company's success, say authors of the book War for Talent. They recommend that corporations invest heavily in their “A” performers, affirm the “B” performers and improve or remove the “C” performers.
The Mckinsey and Company's survey of 13 000 executives at 120 companies and case studies of 27 leading companies, discovered empirical evidence that better talent management leads to better performance. It says on average, companies that did a better job of attracting, developing and retaining highly talented managers earned 22 percentage points higher returns to shareholders.
This article is written as part of the BEST Employers™ South Africa human capital management accreditation and public relations project, now open for participation.
Visit our PRESS OFFICE: CRF International is research-based publishing company that identifies top performing companies across three continents using credible, scientific research surveys and provides a powerful brand and marketing platform to best performers through its local partnerships and publishing arm.- more....
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