For anyone involved in recruiting and talent management—or anyone concerned about his or her long-term career viability and talent development for that matter—it’s helpful from time to time to step back and consider the global forces that are shaping our labor markets in the U.S and abroad. Do they favor you? Your organization?
In many of the industries and market niches that Witt/Kieffer serves, executives who make a difference with sophisticated skill sets are near-impossible to find. We’ve written about this challenge regarding, for example, CEOs, CIOs, CFOs, Chief Legal Officers and physician executives in healthcare, as well as progressive leaders in the life sciences, colleges and universities, and even sports foundations and non-profits. There is a recurring theme in terms of attracting talented executives: Organizations that proactively position themselves to appeal to top talent and embrace talent development, not just those who pay the most, get the best people in the long run. Progressive organizations have learned this lesson to increase the diversity of their workers and attract women and minorities, and it’s something that can apply to recruiting the best people overall.
The competition is only going to get worse, believes Richard Dobbs, director for the McKinsey Global Institute, who spoke earlier this week at the global conference of the Association of Executive Search Consultants (AESC) in New York City. His talk, “The World at Work: jobs, pay, and skills for 3.5 billion people” referenced a recent report by the same name.
Dobbs calls the seismic workforce shifts currently taking place—including adding a billion jobs in the next 20 years on top of a billion in the past 20 years—the most substantial force shaping global society today. “It’s bigger than the economic impact of first and second World Wars together,” he says, adding facetiously: “It’s bigger than the Internet. And it’s bigger than the introduction of the plow!”
Every year, 65 million people move from agriculture into cities, where the jobs are, he says.. First-generation urban workers typically end up two times richer than they were before, while successive generations increase their wealth on an even greater trajectory. The result is a massive labor force and consumer class—the 3.5 billion referenced in his title.
Talent Development: The Skills Challenge for Workers and Employers
An unfortunate side-effect of this shift is a bifurcation of the global labor market. “While this change is resulting in huge numbers of people being taken out of poverty and lives being improved through urbanization, there is now an underclass developing in developed countries,” Dobbs says. “That group is growing up poorer than their parents. And that all comes down to supply and demand.”
Those who are succeeding and doing as well, or better, than their parents are highly skilled workers. Unfortunately, the increase in these workers globally (even with Chinese and Indian universities churning out skilled graduates) doesn’t come close to meeting the demand. The dearth of skilled workers will only get worse, Dobbs believes.
Thus, for nations and economies, a defining future challenge is talent development and the “skilling” of more workers. This is already happening, Dobbs notes—think of all the fuss regarding “STEM” education (need reference here) in the U.S. and abroad—but not at a rate nearly fast enough.
The upshot for workers, even those who are fairly highly skilled already, is to continue to ramp up your marketable talents. Greater skills directly correlate to higher salaries and more work options. For executives and their organizations facing competition for recruiting highly skilled employees, especially leadership talent, Dobbs offers the following suggestions:
- Build a granular understanding of different labor markets, and know when you can tap into those markets.
- Raise the productivity of high-skilled workers through talent development and efficiency-boosting measures (social media can be one).
- Shift technology investments from “labor-saving” to “skill-saving”—that is, to enable less-skilled workers to play larger roles.
- Take an active role in public education and training systems by shaping curricula and supporting training in colleges.
- Retain and bring back older workers through flexible work arrangements.
Employers Need a Dynamic Value Proposition
Many organizations are doing this already—a good thing, as Dobbs finished up by suggesting that the clear differentiator for employers tomorrow will be the ability to offer a dynamic value proposition to skilled workers around the world. Why should great employees come to your organization as opposed to your competitors (even in different industries) across the globe? What is your organization’s competitive advantage?
Interestingly, Dobbs also sees this challenge as a “board diversity” issue, something Witt/Kieffer’s Jim Gauss counsels clients about regularly. Diversity on boards isn’t just about gender and ethnicity and should be considered in a broad context, including skills and knowledge areas. Dobbs’ point is that boards of directors in all industries must have labor market experts, and understand the countries and markets worldwide where they will draw talent from in the future.
Companies that understand labor markets and plan for talent shifts now will “lock in structural advantage for the next 50 to 75 years,” Dobbs concludes. First and foremost, organizations must make themselves great places to work. “The risk for clients is if they’re not able to tap into that employee talent proposition,” he says.
By Paul Thomas, Witt/Kieffer Senior Writer (@PaulWThomas)