|Drivers of managing talent risks, as reported by organizations surveyed |
|Ranked by frequency of mention |
|Rank* ||Driver |
|1 ||Shortage of personnel with necessary skills |
|2 ||Lack of organizational focus on managing talent |
|3 ||Lack of development in talent management processes |
|4 ||Increased global competition for talent |
|5 ||Negative impacts of law or regulation on organization's ability to attract talent |
|6 ||Freeze on new recruitment impacting ability to manage talent |
|* Based on 492 responses from our global multi-sector survey. Rank order may not reflect statistically significant differences in all cases. Unclassified/refused responses not shown. |
Nearly 20% of respondents report that people with the right skill sets are simply not available.
Summary: While never first, in almost all sectors human resources risks rank among the top four challenges. It is of particular concern in emerging markets.
Risks associated with the war for talent are on the rise for the third consecutive year.
There is reason to be concerned with this challenge: most sectors expect this risk to continue to escalate in importance as 2013 approaches. The only sector to expect a decrease in the level of human resources risk is oil and gas.
This can perhaps be attributed to the fact that oil and gas firms have been grappling with this challenge for some time: "human deficit capital" was the number one risk on the oil and gas sector risk radar in 2008. However, it has since fallen back, possibly because firms have put programs in place to manage the threat.
In 2011, however, no sector ranked this risk first. The risk appears near the top of the list by virtue of consistency: while never first, in almost sectors it ranks among the top four.
Respondents appear on the whole to be evenly divided in citing both internal problems, e.g., weaknesses in HR processes, and external pressures, such as rising competition for talent, as responsible for pushing this risk higher.
Nearly 20% report that people with the right skill sets are simply not available — a factor that may in part reflect weaknesses in educational systems. This is a weakness that is likely to get worse.
Talent risk is a particular concern for the retail sector and for public administration (exposure to talent risks in this latter sector is likely to be heightened over a lack of flexibility over hiring practices and remuneration).
It is also worth noting that many of the geographies where the risk is of particularly concern are the emerging markets: in Brazil, China, India and South Africa, it ranks in the top four. This suggests that the much publicized "reverse brain drain" of talented Chinese and Indian workers returning to their home countries has not been sufficient to offset the rising need for skilled workers in these economies.
Managing the risk
Despite the high priority given to talent risks in this survey, active management of this risk is relatively infrequently reported.
Overall only 50% who identified this risk as a top-four concern reported that they had already taken measures to manage talent risks, with the development of a talent management program the most common measure mentioned.
In general, risk mitigation strategies showed little variation between sectors. However:
- Banking sector respondents are less likely than those from other sectors to have programs to manage talent actively, and appear more likely to complain of shortages of skilled personnel or weaknesses in HR processes.
- Nearly 30% of respondents from the public sector also complain of weaknesses in talent management.
- Organizations from the emerging markets are the most likely to actively manage talent-related risks.
- Organizations located in China appear to lead the way in developing university recruitment programs
- Respondents from China and India, followed by respondents from Sweden and France, appear most likely to have programs to nurture high potential staff. These results may reflect expectations of longer employment tenure in these countries.
- It is also the emerging markets where particular talent management challenges are most notable. For instance, while overall, 17% of respondents reported that their firms lacked developed HR processes for managing talent, this figure rises to 40% among organizations operating in Russia and Poland.
Organizations' responses to managing talent
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