Executives Worldwide See Talent Gaps as Top People Challenge in Every Region and Industry

Global Survey of 4,741 Executives in 83 Countries and Markets, Conducted by The Boston Consulting Group and the World Federation of Personnel Management Associations, Identifies HR Priorities of Today and the Future Singapore

 

Managing talent is the most critical human resources (HR) challenge worldwide and will remain at or near the top of executive agendas in every region and industry for the foreseeable future, according to a new global study conducted by The Boston Consulting Group (BCG) and the World Federation of Personnel Management Associations (WFPMA). Key findings of the report, Creating People Advantage: How to Address HR Challenges Worldwide Through 2015, was presented yesterday at the Singapore HR Congress and Business-Connect Exposition 2008.
 

The study, which is based on a global survey of 4,741 executives in 83 countries, found that managers also rated improving leadership development and managing work-life balance as urgent priorities. The report provides rankings and analyses of 17 HR challenges in seven major regions of the world and suggests specific actions to address those issues. “The study, the most comprehensive review of global HR practices ever conducted, provides piercing insight into the current and future challenges facing companies,” said Florent Francoeur, President and CEO of WFPMA, the world’s professional HR body.

 

Singaporean companies, understanding that many of the country’s best and brightest seek their fortunes elsewhere, are accustomed to looking overseas for talent. Our study found that 44 percent of companies in Singapore are already sourcing talent globally, and 71 percent of executives said that they will be doing so by 2015.

Based on the report, Singaporean executives indicated that they will launch different initiatives such as establishing alumni networks and targeting specific groups of potential employees such as different ethnicities, immigrants and women in order to manage talent. Managing talent ranked as the most important HR challenge in 9 of 17 countries analysed in depth, including the United States, Australia, Singapore, Japan, and the United Kingdom, and was at least in the top three in 14 of the 17 countries—a reflection of increasing globalisation and competition. To help address this challenge, executives from all regions expect their companies to boost global sourcing of talented employees. Although few companies today are moving businesses to new locations to access people, executives expect this to be the most rapidly growing HR trend through 2015.

 

“It may soon be harder to find and keep talented employees than to raise money in an IPO,” said Rainer Strack, a BCG partner and one of the report’s authors. “In the West, work forces are graying, while in developing markets, companies have an unquenchable thirst for skilled employees. Creating a ‘people advantage’ will increasingly translate into competitive advantage.”

 

Other Challenges: Improving Leadership and Work-Life Balance

Improving leadership also ranked as a top-three HR challenge in 10 of the 17 focus countries, including developed nations such as the United States and Japan as well as emerging markets such as China and India.

 

Managing work-life balance was rated a key future challenge in every region except the Pacific Region and a top-three priority in Argentina, Chile, Brazil, Canada, India, Italy, Singapore and South Africa. Flexible work arrangements are the cornerstone of almost all work-life balance initiatives. Worldwide, more than 60 percent of executives said that their companies already offered flexible working hours, and nearly 80 percent said that they planned to do so by 2015. Offering part-time work was the second-most popular future action by employers.

 

“The days of company-loyalty-at-all-costs are over,” noted Andrew Dyer, worldwide leader of BCG’s Organisation practice and another author of the report. “Employees, especially the most talented ones, often make career choices based on factors such as flexible work hours and emotional gratification.”

 

Disparate Views on Demographic Risks

While some issues were nearly universally important, others varied widely across geographic locations. Managing demographics, for example, was the fourth-highest priority overall, but executives in different countries offered strongly varying assessments of its importance. Those in the United States, Canada, Australia, and much of Europe (particularly Germany, France, and Italy) rated it a pressing issue. By contrast, Japanese executives, who have been grappling with the effects of an aging work force for years, did not rank it as a key HR priority.

 

“Many executives don’t realise the serious problems they could face from a loss of knowledge and productivity if they don’t start preparing today for labor shortages in five or ten years,” Strack said. “They should analyse capacity and productivity risks for each location, unit, and job type and then develop a series of measures to mitigate anticipated shortfalls.”