The Year of Great Change Is Dawning: Some End-of-the-Year Thoughts

We come close to the end of another year, and a good time for a look at where we have been and where we are going. ERE has been around now for more than six years! And what a six years it has been. I remember the day ERE’s president David Manaster called me to ask if I would write a column or two for ERE, and I remember that, even though I didn’t really know what it was, I agreed to do a few and see how it went. Now, 300 or more columns later, I guess it has gone pretty well. We have ridden a roller coaster of talent shortages, what have seemed like talent excesses, layoffs, and terrorism. Despite it all, we really should be aware that we are now in talent trouble. This coming year will be the Year of Great Change. As the economy improves, we will see how deep the shortage of talent has become. Figures vary, as do opinions on their accuracy, but most feel there is a shortage of between two and ten million people to fill the jobs that exist and will emerge. Even if the shortage is only a few hundred, it will change the recruiting equation entirely. Recruiting Becomes Talent Management The challenge is ours to take up. We cannot just spend our time seeking out primarily external people to fill the openings our organizations have. We will need a proactive, market-informed, internal-employee-focused talent management process to keep our firms supplied with the talent that will make them, and us, successful. We will have to get better at doing the cost-benefit analysis between hiring someone and developing someone internally. We will have to help our managers find ways to identify and keep the best people they have, develop less experienced ones, and limit external hiring to the barest minimum. And we will do this because, to a large degree, the external supply will be smaller and less skilled. Deep knowledge of who competitors employ, of who is about to go on job market, and about who is graduating with a skill we need will be vitally important. We will need broader skills and more awareness of the talent market than we have ever had before. Skills Not Positions Rather than rely as we do now on the outdated assumption that there are plenty of talented people if we could find them, we will realize that there are nowhere near enough people with the exact set of skills we want or think we need. Instead of looking for the person with the most exact skill set to fill a position, we will have to look for someone who has the right general combination of skills that will get the job done, even if they do not exactly meet our requirements. We will be faced with choices ó either hire a good, skillful person and train him to do the specific job we have, or spend time and money trying to find an exact fit. We will have to figure the cost/benefit ratio of hiring verses developing people. We will more than ever before have to alter the job requirements to fit the candidates we have, not the other way around. More often than ever before, we will be given a choice between a solid, competent, motivated and available candidate and the hope of finding someone else with the “perfect” skill set. We will find ourselves influencing managers to choose the former and invest a few weeks in training. The time saved, to say nothing of the candidate’s motivation and commitment, will more than offset the costs of training. Education Becomes a Competitive Advantage Organizations that can identify people with basic skills and competencies, and that have the means to efficiently train them in the specifics of a particular job, will prosper ó to the chagrin of those that can’t or won’t. Public and private education will strain to meet the needs of most organizations, and these organizations will have to pick up the slack and do their own training and development. This is why corporate universities and e-learning are popular and growing ó they help meet a need that leading edge companies have felt for more than a decade now. Our universities and high schools are not producing enough of the kinds of people organizations need. This is partly caused by rapidly changing needs ó the kinds that academic institutions can barely grasp let alone prepare people for. And it is partly caused by an economy that needs highly skilled workers, not the lightly skilled ones that American high schools turned out by the thousands for General Motors and other manufacturing companies for most of the 20th century. We have an educational system, at all levels, perfectly designed to produce the kinds of workers we no longer need. Only a handful of institutions, such as the University of Phoenix or Capella University, are forging new models. Leveraging a Global Marketplace While today we outsource and offshore for economic reasons, soon we will do it because that is where the people with the best skills are located. We will also have to realize that the notion of an American worker is becoming outdated in a global marketplace. All workers are global workers, and work will go to where the talent is located. Increasingly, the talent we seem to need is in China, India, Central Europe, and Southeast Asia. Corporations and workers, together, will begin to identify with regions and with consumers, rather than with political boundaries. Quality and cost will both be ingredients in a complex stew of economics, ethics, and politics. Large, unionized organizations will have to learn how to restructure their relationships with unions so that their members can be retrained and redeployed in more productive ways. But, of course, small non-unionized firms will find this to their advantage. This is why Cisco and HP and other companies that do not have unions are well-positioned for this global talent marketplace. Since unprofitably guaranteeing jobs that are already doomed to go to a cheaper source is not good for organizations or our country, it will be wiser to figure out how to help our current employee learn new skills. Our economy is a powerful job creator, and the mix of needed skills is always changing. Organizations and employees have to be armed with good market knowledge and a willingness to shed off the old and take on the emerging. We have to be willing to do the same to be reading this column in another six years. We live in the best and the worst of times. Change is rapid, technology pervasive, and most of our old practices are not working. This will be the year of great change ó and great opportunity, as well.