Talent Shortage Becomes Real Business Issue in 2006

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

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