The Global Talent Crisis

In today's complex environment, a strategy for attracting skilled people is as critical as a marketing or finance strategy

By Mark Foster

I have heard it said that there is a war for talent—and talent has won!

In the decade since this war for talent was first declared, the definition of talent and the fronts on which the war is being fought have all grown more complex, paradoxical, turbulent, and contradictory. Talent is not just a human resources issue. It is an urgent strategic issue that business leaders need to address proactively—now.

Here's why. Corporations are experiencing seismic shifts in demographics, resulting in aging workforces but fewer, younger workers in some parts of the world and burgeoning sources of young talent in other parts; a rising demand for new skills paired with growing deficits in basic skills; more diverse, distributed, and mobile workforces; and, despite a global abundance of people, local scarcities of talent. The shortages are particularly acute for knowledge workers and managers.

Top of the Agenda

It's clear that a talent strategy is now as important as a marketing or finance strategy for corporations operating in today's multi-polar world. Of all the business issues that my Accenture (ACN) colleagues and I help our clients address, talent is among the most difficult. In fact, our latest annual survey of more than 850 C-suite executives around the world found that attracting and retaining talent falls only behind competition as the top threat to business success. (Certainly at Accenture, with global workforce of 180,000 people, talent is at the top of our strategic agenda.)

Despite years of lip service, senior executives are only now realizing that their talent strategy must entail more than just throwing money at high-performers in hopes of recruiting and retaining them. Indeed, talent must be redefined to include not just the best and brightest but the entire workforce—those who contribute all of the skills and capabilities that an organization needs to sustain growth.

Dimensions of the problem

A committed, high-performance workforce is the heart and engine of any organization, and the facts about global workforce challenges are undeniable:

•Companies and countries will need more than 3.5 billion people by 2010 to fill knowledge worker positions. By 2020, that number will exceed 4 billion. Projections indicate that there will be shortages between 32 million and 39 million people to fill these positions. The U.S. will have the biggest shortfall—needing as many as an additional 14 million people.

• The shortage of talent is particularly acute at the management level. Two out of five Chinese companies find it difficult to fill senior-management positions, and turnover rates at the manager level in China are 25% higher than the global average.

• The balance of the global labor supply is shifting to developing economies. Between 2005 and 2050, the working-age population of emerging economies will increase by 1.7 billion, compared with a decline of 9 million in the developed economies.

• In the U.S., retirement of the baby boomers means that the 500 biggest companies could lose half their senior managers in the next five years.

These are just a few facts, but it's clear that talent has become a global commodity, fiercely fought over by multiple competitors. As a result, I've found that CEOs are eager to discuss the development of a "talent map" to help them think about the skills they require, for what purposes, where in the world they should be located, and how they can secure those skills. Many have devised innovative solutions, some more successful than others.

Five strategic imperatives

Whether recruiting young technicians from the developing world, retaining valuable experience from an aging generation of employees, or integrating Generation Y into the workforce, executives confront a maelstrom of talent issues. At Accenture, we have identified five strategic imperatives that companies should embrace to become talent-powered organizations:

1.