Finding the right talent is a problem worldwide, despite a large, easily accessible pool of educated people and opportunities to outsource more tasks.
A quarter of more than 300 US-based employers polled by Deloitte in December said the shortage, motivation and retention of qualified talent is the most significant challenge their company will face the next three years, up from 16% a year earlier. And 43% of the more than 1,200 respondents in a global CEO survey PwC conducted between September and December said it has become more difficult to hire workers.
The talent challenges are acute in knowledge industries, such as pharmaceuticals and technology companies, and in heavy industry, such as industrial manufacturing and automotive, the PwC survey suggested.
“We are in a talent crunch that is being felt across the world,” Ed Boswell, US Advisory People and Change practice leader at PwC, said in a press release.
The PwC report cited some talent crunch examples: A Chinese automaker attends job fairs in Germany even though China produces large numbers of graduate engineers each year. High jobless rates persist in the US and Europe, particularly among the young, while businesses fret that they cannot attract the digitally adept Millennial generation. Too many well-educated citizens of the Middle East and elsewhere are not in the workforce at all.
Talent shortages and mismatches are not only driving up recruitment expenses more than expected, but are also keeping companies from pursuing market opportunities. Thirty-one percent of the respondents in the PwC survey were concerned it affected their company’s ability to innovate effectively.
So what are companies doing about this talent challenge? The surveys provide some answers:
- 78% of CEOs worldwide plan to change their strategies for managing talent.
- 67% of CEOs worldwide said it will be more likely that talent will come from promotions within their companies.
- 53% of CEOs worldwide plan to move experienced employees from the company’s home market to newer markets to circumvent skills shortages.
- 43% of US employers plan to change learning and development programs for employees, up from 38% a year earlier.
- 38% of CEOs worldwide expect to invest significantly in technology to avoid talent shortages.
- 79% of CEOs worldwide have the chief human resources officer report to them directly to integrate HR with business planning at the highest levels of the company.
—Sabine Vollmer (svollmer@aicpa.org) is a CGMA Magazine senior editor.