The Global War for Talent - Keeping The Best Employees

By Marie Ramp, Germany

From many businesses all over the world many influential and concerned figures are voicing their opinions regarding the issue of talent shortage.

Initially this may seem difficult to believe as we have heard about high unemployment rates are still common in some countries and in areas of countries that have an overall good rate of employment. Looking behind the scenes we find that business life is changing and many new challenges face today's employers.

Today it is not enough to be successful in the short term. Long-term sales success and revenue growth requires consistent, outstanding performance that is unique in the eyes of your customers. Today's businesses have to be at least one step ahead their competitors. In other words you need to be better, faster and/or cheaper and offering high value to the customer.

This goal becomes more challenging due to growing market transparency intensified by the technological development, especially the distance decreasing information and product treasure chest that is the Internet. Considering that your unique idea will be visible and easily reproducible by your competitors within a short period, the necessity to differentiate becomes essential to survive. Consequently, the importance of clever and complex ideas and strategies developed by clever and talented high potentials rises.

In addition, globalization forces us to think and act beyond territorial boarders. Suddenly we can lose key customers to a supplier in an East European or even Asian low-wage country. As these countries successfully emerge in the global marketplace for products and services, many blue-collar work jobs in the field of production were shifted to countries advertising with low labour costs. East Europe plays a significant role as a near-shore outsourcing destination for West Europe. In China, a blue-collar worker costs about €260 direct labour costs per month, in India for example €160 per month, which is about 10% of the costs in West Europe. The hard fact coming out of this development is that low qualified people in the production field in developed countries are in global competition. Societies might complain about that, but what they need to be aware of is that companies and their employees need to follow the requirements of their customers demanding best products and services at a low price.

To manage these challenges companies require different skills from their employees than in years before.

Whereas workers once were judged on the basis of hard work, loyalty and experience, now the key to success are employees with flexibility as well as planning, analytical and globalization management skills. The future lies in management, sales, training and the professions - all of which require high education and training, creativity, soft skills and lifelong learning. With the great business developments in the fields of technology, engineering, communication and sciences we experience that not just global players but also small and medium sized companies are desperately searching for high-qualified workforce.

Across the globe 41 percent of employers are finding it more difficult to fill jobs, specifically openings for sales representatives, skilled manual trades people and technicians, which are in-demand technical workers in the areas of production and operations, engineering and maintenance.

Graduates with a double degree in engineering and management have the highest level of the required flexibility and skills, and are understandably in great demand. There is likely to be huge competition in the energy sector in the future. The rising importance of information and communication technology creates talent demand in computer manufacturing, software development and information industries. In addition in every country, service jobs, for example health and social care, will be increasingly important, because they cannot be automated and exported yet.

Reasons for that competition among employers on the recruitment market lie in demographic and educational structures. As birth-rates are plummeting around the world and half the population of Western Europe will be over the age of 50; a quarter over 65 by 2030, there is going to be a massive labour shortage, and the idea to simply draw on large numbers of immigrants to supplement labour supply is a myth. In addition the low number of people entering traditional fields like engineering is also a sign of skills shortages ahead.

The demographic shifts and economic factors could ultimately threaten the engines of world economic growth and prosperity. In Germany the discrepancy of high unemployment rate on the one hand and talent shortage on the other hand arises to a hot topic on the labour market. Despite an unemployment rate of 7 percent, 2.5 million workers will be missing by 2020, because the unemployed workforce cannot fulfil the high qualifications required by the job market. Even the high populated emerging markets like China and India have already opened up the war for talent. Although the labour market offers a huge quantity of workforce, high qualified employees with experience and foreign language skills are becoming rare and the high resource demands caused by more than 10% economic growth per year in China cannot be satisfied anymore. It is the shortage of specific skills and competences required in those industrialized, emerging and developing economies, which is most concerning.

When demand outstrips supply like this, we can expect salaries and compensation to rise. Once you have recruited a talent, you also face loosing him as loyalty drops and fluctuation rates rise among the demanding talents, who have a lot of opportunities.

Part 2 - Retention Strategies: CLICK HERE >