Talent Shortage Becomes Real Business Issue in 2006
Talent shortage is no longer a futuristic threat, but will change the landscape of Kiwi business in 2006
Auckland, 12 January, 2006 - The looming threat of a talent shortage, harbingered by human resources (HR) managers for
years, is poised to be a real issue for business in 2006. New Zealand’s most talented employees continue to look for
better opportunities in the US, Australia and Europe or to switch to part-time and contract work, leaving a dearth in
the domestic labour market. In the coming year Kiwi businesses appear likely to be forced to grapple with an
ever-increasing talent shortage.
“Talent shortage looks set to become a major concern for CEOs and CIOs in 2006,” says Sandra Lyall, human resources
director, Unisys New Zealand. “It has reached a critical level. In the past, talent management and retention programmes
have been a perk for employees. Effective talent management is now a business imperative. Companies will no longer be
able to retain a competitive advantage without it.”
Unisys experts predict the following HR trends will drive change in the IT sector in 2006:
1. Increasing difficulty finding the best people for positions on offer;
2. Rising costs from recruitment, initial salary offerings, and running programmes and incentives to retain top
performers;
3. Increase of flexible working options for employees;
4. Employee retention-once a business has found the right person for the job, the challenge becomes finding the unique
motivators to keep them engaged
5. Managing performance-basic people management techniques and transparency in communication with employees will help to
ensure profitable performance.
“Solving the talent shortage across New Zealand will require a number of tailored solutions for individual employees,”
says Lyall. “In 2006, businesses will need to focus on identifying what motivates their employees, otherwise employees
will find someone else who does.”
1. Finding the “right” people
Recruitment is becoming increasingly difficult in all markets. According to a new McKinsey report, which builds on their
1997 study, the need for workers who perform complex functions is increasing. Jobs involving routine interaction, such
as clerical work, are being replaced by jobs demanding the exercise of greater judgment and integration of previous work
experience. This makes finding and identifying talented employees more difficult because a ”resume” list of skills
cannot capture the amorphous set of “soft” skills required for the performance of complex tasks.
2. Rising costs
Scarcity of employees makes cost effective recruiting increasingly difficult. Paucity of candidates not only drives up
starting salaries, but also increases the need for incentives to keep employees from jumping ship. Employees are aware
of the talent shortage and in light of this are constantly asking for more from employers.
3. Flexible working
Flexible working alternatives are particularly important in New Zealand where lifestyle opportunities lure employees. A
parent may want time to spend with children after school, or a “gen x-er” may want to hit the surf on a cloudless
Wednesday afternoon. The reality for businesses is the same: no matter what the demographic, everyone wants the
flexibility to work from home and dictate their own schedules. Businesses must develop ways to manage this new culture
by balancing face-time with the lifestyle benefits of flexible work hours and telecommuting.
4. Employee retention
The key to retaining the best talent in a competitive market is understanding that solutions must be tailored to
individual employees. A generic corporate plan ignores the differences in employee demographics and individual
personalities. Retaining employees is achieved by gaining insight into what motivates the individual, and making sure
that each employee is engaged on appropriate terms. A healthy turnover rate keeps a business from becoming stagnant,
however it is essential to identify and retain high performers.
5. Performance management
Keeping employees satisfied and engaged is closely related to greater employee retention. Managing performance can range
from basic management techniques, to mentoring employees and implementing large-scale talent management programmes.
Successful talent management programmes identify and groom employees with potential for leadership roles within an
organisation.
Identifying unique motivators for employees is the keystone for successful performance management. Demographically,
generation “X/Y” employees respond well to bonus incentives and talent management/mentoring schemes, yet recent studies
suggest that junior management is often overlooked when it comes to talent management programmes. Women have also been
shown to be more critical of the current talent management programmes than their male colleagues and generally find them
less effective.
“Talent Shortage has been a major business issue for Boardrooms over the past few years but will become even more so in
2006.” says Lyall.
ENDS