Businesses and their leaders face some pressing questions about their future talent pipelines and human capital strategy. Global megatrends are changing the talent landscape at the same time that the global economy regains its confidence and looks towards growth.
CEOs are well aware of the extraordinary challenges ahead but seem less certain about how to tackle them. 93% say that they recognise the need to make a change, or are already changing, their strategy for attracting and retaining talent. But there’s still an enormous gulf between intention and action; a staggering 61% of CEOs haven’t yet taken the first step.
This paralysis is familiar. In 2013, 77% of CEOs said they had plans to change their strategy for managing talent in the coming 12 months – but if we look back at the past seven years of CEO surveys, talent management has been identified as the main target for strategic change in every year. And every year, their concerns about availability of talent have increased. CEOs are well aware that something needs to be done, but are less sure of exactly what that is.
This is no time for tinkering at the edges. The magnitude of the changes underway mean that a fundamental rethink of talent strategy is needed, and right now. New sources of labour to build tomorrow’s workforce must be found, and the way in which people work, and where they’ll work, needs to be reconceived.
CEOs see better times ahead; 44% believe the global economy will improve over the coming 12 months, compared with just 18% in 2013. But they also know that the rules have changed. Megatrends, including technological development, demographic change and urbanisation, are creating profound challenges for the future of business and their workforces.
Megatrends are redrawing the skills map for global businesses; the supply of talent is shifting at a time when demand is increasing. This is exacerbating a familiar worry for CEOs; 63% said availability of skills was a serious concern, an increase of 5% on 2013. With half of CEOs planning to hire more people in the next 12 months, competition for talent will be intense. Wage arbitrage is a growing concern; 58% of CEOs are worried about rising labour costs in high growth markets.
In a competitive talent market, the employer value proposition becomes critical. CEOs have worked hard to rebuild trust between employer and employee, and 39% report an improvement. But will trust translate into loyalty?
CEOs lay much of the blame for the skills shortage at the feet of government and legislators; 52% say that regulation is hampering their ability to attract and retain the best people, and only one in five felt their government had been effective in addressing skills shortages.
CEOs see that there are serious talent management challenges ahead – 93% say that they recognise the need to change their strategy for attracting and retaining talent. But an enormous 61% haven’t yet taken the first step. CEOs are well aware that something needs to be done, but are less sure of exactly what that is.
CEOs feel that HR isn’t ready for the task ahead. When asked how well-prepared the major functions in their business were to capitalise on transformational trends, only 34% felt that HR was well prepared and 9% said it was not prepared at all.
“I perceive talent to be one of the most important challenges for [us]. We’re investing heavily in attracting and retaining talent. This isn’t only a problem in Mexico, but for the industry in general. We need to have higher numbers of graduates in those areas where the industry needs them.”
“Over 50% of [the population in our region is] under the age of 24. That presents an opportunity because you have a seemingly very buoyant and young consumer base, however the challenge comes because the youth are not properly being engaged in the economic opportunities in the region”
“There are jobs in the economy, but there are no skills to fill those jobs. And so, as Transnet, we have embarked on a comprehensive programme to train young people in different vocations using modern technology.”
“There are increasingly younger employees, a more diverse set of them that are joining the organisation whose aspirations and expectations are very different from what a new set of employees had five years ago.”
“There is a generation already entering companies that has different values, a different way of seeing life, a different education… So we have to change, because the people working for us are already different.”
Global Marketing & Business Development, Human Resources Services, PwC United Kingdom
Tel: +44 (0)113 289 4423