Just as competition for customers intensifies during an economic downturn, so does competition for talent. Throw in demographic change and a shortage of skilled workers and the result is a very tight talent market. During a recent Aberdeen survey of 900 organizations, 43% of respondents indicated they were concerned about an “insufficient talent pipeline,” while almost as many respondents were concerned about “loss of high potential employees to competition.”

The reality is that in this downturn, many organizations will be making cutbacks. In this case, Shevelenko and Berggren of SuccessFactors advise organizations to “cut with precision, if you must, but not bluntly.” Of course, this can only be accomplished if performance management is sound, records are well kept and clarity exists about the present and future business strategy. And since cutting too deeply can have profound negative consequences, organizations must keep an eye on the future. Shevelenko and Berggren tell organizations to “focus on your core talent and invest where it counts.”

Employees need reassurance during a downturn. Jung, Messenböck and Sirkin of the Boston Consulting Group, caution against creating a fearful environment and tout the benefits of open communication. Similarly, Shevelenko and Berggren recommend transparency.

Global patterns can provide insight to help guide planning. The talent shortage varies between countries, a point that is documented in the Bersin and Associates report 2008 Talent Management Factbook ®: Global Trends, Facts, and Strategies in Corporate Talent Management and explained country-by-country in the Manpower report Talent Shortage Survey 2008 Global Results. Manpower surveyed almost 43,000 workers and found that, for example, Romania, Hong King, Singapore, Australia and Taiwan are experiencing the greatest shortage. Not only do shortages vary between countries, they also vary between industries, with key areas identified in the Bersin and Associates report.

Shifting global economic patterns may also provide insight. For instance, Faiola and Drew suggest in The Washington Post that “the global slowdown stemming in part from the deepening U.S. financial crisis is hitting the world's richest nations the hardest even as emerging nations, some with once-fragile economies, are proving relatively resilient.” And debates such as the one on the Economist.com which considers whether or not “the competitiveness of workers in today’s rich countries is in permanent decline” are emerging and posing some serious questions.

Yet, workers are willing to re-locate to find work. Zieminski references a Manpower survey of 31,000 people that shows almost 80% would move for a job, with just over half willing to make the move permanently.

Experts cited in Bridging the Gap suggest that a focus on retention, employee development and recruitment will help minimize the negative consequences of a talent shortage. The Boston Consulting Group finds that companies which successfully maneuver a downturn, actively “look for ways to leverage their core capabilities in new fields, industries, or market segments.” Both these steps rely upon thorough performance management documentation, solid processes and quick access to pertinent information.

References:

Aberdeen Group Inc. Managing Employee Performance. Aberdeen Group Inc., May 2008.

Bersin & Associates. What Works ® Talent Management Newsletter. US: July 2008.

Bishop, Mathew, Jacob Funk Kirkegaard and Lynda Gratton. “Proposition: “The competitiveness of workers in today’s rich countries is in permanent decline.” Economist.com [www.economist.com], July 18, 2008.

Jung, Udo, Reinhard Messenböck and Harold L. Sirkin. “Winning in a Downturn Six Actions to Take Now.” Boston Consulting Group, 2008.

Faiola, Anthony and Jill Drew. ”Slowing Economy Gives Way to Global Role Reversals.” WashingtonPost.com [www.washingtonpost.com]. July 17, 2008.

Goldsmith, Marshall. “Human Resources: The Big Issues.” Business Week, July 8, 2008.

Manpower ®. Talent Shortage Survey 2008 Global Results. Manpower ®, 2008.

Shevelenko, Alex and Erik Berggren. “Winning Through Talent in Uncertain Times: 4 Strategies to Get Ahead.” SuccessFactors Inc., 2008.

Yohe, Grae. “Bridging the Gap.” Human Resource Executive Online [www.hreonline.com]. May 16, 2008.

Zieminski, Nick. “Most workers willing to move for a job: Manpower.” Reuters, June 24, 2008.