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The Changed Talent Landscape

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I talk a lot about change … about the need to embrace change, about the fact that it happens whether you like it or not, about the fact that those who fight it will lose.

I have not, to date, talked about WHY the world has changed and why it won’t be going back to “the way it was”.

I am just another guy running a business here in Canada … but my business is in the supply of talent, and my clients include the major banks, the telecommunication companies, the oil and gas sector, three levels of government, utilities companies and retail clients.  I deal with system integrators, management consulting companies and am active in our industry association.   So … I think I know a little bit about jobs in Canada.

To be as simplistic as possible I divide my changed world into pre and post recession, and throw in that period of recession that was a catalyst for change.

The following are some of the drivers of the changed world that we live in:

1.  Team Dynamics. 

Prior to the recession (the “normal” world people like to talk about) companies had been on a steady course of success and growth.  Their teams had been built over years, and comprised of a percentage of “A” players, some larger percentage of “B” players and a majority of journeymen.  (Think of a sports team, comprised of the superstar or two, the up and comers and the rest … still a pretty effective team).   During the recession the best companies used the time to increase their “A” players at the expense of some journeymen. 

What does that mean?

It means the gap between the best companies and the rest grew; it means that the people who are available in the marketplace today are highly unlikely to be A players; it means that some companies lost!  The strong teams got stronger and the other teams got weaker.

2.  The “Lean” Factor.

During the recession companies learned to operate at maximum efficiency, they trimmed “fat” and lived within their means in order to survive. 

What does that mean? 

It means that companies will be that much more reluctant to get “fat” again.  Hiring will be slower, more thoughtful and with a view to staying lean … ie. less jobs.

3.  The Outsource/Offshore Phenomena.

Prior to the recession many clients I talked with would not think about outsourcing, and the thought of offshoring was even further from their mind.  During the recession all companies needed to look at their alternatives to conserve costs, as a result outsourcing and even offshoring got a lot more attention.  Companies have been exploring these solutions much more aggressively than previously and where the ROI is clear there is now an appetite to make it happen.

What does that mean?

Outsourcing shifts the workforce from an end-client to a service provider and will result in less jobs because of economies of scale offered by the supplier and other efficiencies that they can bring (10 end-client jobs does NOT = 10 outsourced jobs).  Offshore outsourcing moves those jobs to another country and many regular outsourcing solutions have some component of offshoring as part of the solution.  The result is less jobs in the local markets.

4.  The Nature of Work.

Canada, like many “industrialized” nations is moving more from a “blue collar” workforce to a knowledge economy.  The manufacturing base of Ontario has been in steady decline ever since the dollar rose above 80c US.  A reluctance by the unskilled workforce to accept less (money & benefits) makes the offshore solutions just that more attractive. 

What does this mean?

It means that knowledge based companies will be more important for the creation of jobs as we move forward than in the past.  These type of companies generally tend to employ less people than manufacturing plants etc.  Less jobs.  Better paid jobs.  More skills needed to get a job. 

5.  Changing Attitudes.

In previous generations people enjoyed jobs for life … that ceased to exist some time ago.  In fact a recent UK study found that one in three workers  remain in a job for less than two years.  The recession meant that many experienced workers were laid off and the loyalty to those employers was further eroded. 

What does that mean?

It means that companies will have trouble attracting and keeping the best talent, because their focus will be more on protecting their self-interest rather than investing in what is unlikely to be a long career.  More self employment.  More turnover.  More focus by companies on retention … or more reliance on outsourcing!

6.  The Global Economy & Demographics.

The boomers are/will be retiring leaving that big gap behind them.  This means that talent will be in short supply the world over and countries will be competing to attract that talent.  Within those countries, provinces/states and cities will be competing for that talent.

What does that mean?

It means governments and municipalities need to think about attracting talent to their locations.  It means that there will be less A and B players and the teams will be more mediocre.  It means that competition will be fierce.  It means that people with good skills and experience will be able to go anywhere.  It changes how companies recruit and puts a huge emphasis on the HR function … with a special focus on attracting and retaining talent.

This blog entry is not meant to be a comprehensive study of this subject, but a teaser to get the conversation going … to get people thinking about these issues.  This whole subject will mean that the importance of the HR function will rise, that companies will need to be more flexible in how they meet their strategic goals, that governments need to address this pressing agenda.  It is particularly interesting to see the US starting to push back against immigration when we are on the cusp of a GLOBAL war for talent … a little short sighted I would suggest, particularly for a country built on the backs of immigrants over the last 200 years.

Food for thought?

It is not necessary to change.  Survival is not mandatory.  …W. Edwards Deming