Thursday, January 10, 2008

Making talent a strategic priority

“Finding and retaining talented employees is at least as challenging today as it was ten years ago.”

Demographic trends, globalization, and the growth of knowledge work have intensified the external pressures on companies—but many of them compound the problem by failing to make talent management a strategic priority.

Executives can act on their rhetoric about the importance of employees in creating competitive advantage and embed a robust talent strategy in the overall business strategy if they focus on all workforce segments and not just on the top performers, create different value propositions for employees with different characteristics, and increase the role and capabilities of the human-resources (HR) function.
Companies like to promote the idea that employees are their biggest source of competitive advantage. Yet the astonishing reality is that most of them are as unprepared for the challenge of finding, motivating, and retaining capable workers as they were a decade ago.

Ten years after McKinsey conducted its War for Talent research, the 1997 study drawing attention to an imminent shortage of executives, the problem remains acute—and if anything has become worse. Companies face a demographic landscape dominated by the looming retirement of baby boomers in the developed world and by a dearth of young people entering the workforce in Western Europe. Meanwhile, question marks remain over the appropriateness of the talent in many emerging markets.

Business leaders are deeply concerned, judging by two McKinsey Quarterly global surveys. The first, in 2006, indicated that the respondents regarded finding talented people as likely to be the single most important managerial preoccupation for the rest of this decade. The second, conducted in November 2007, revealed that nearly half of the respondents expect intensifying competition for talent—and the increasingly global nature of that competition—to have a major effect on their companies over the next five years. No other global trend was considered nearly as significant. Continue here


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