Marc Smith is deputy editor of Families in Business.
The changing demographics of the labour market, enduring skills shortages and employee demands for work–life balance have created a so-called "war for talent". Marc Smith explores the challenges for the global family business in their search for skilled staff
Talent management is business's latest go-to phrase. A survey by employment services provider Manpower Professional has revealed that employers worldwide are finding it increasingly difficult to unearth professional staff with appropriate talent. The net result of this, according to the study's authors, is that salaries are increasing and growth opportunities are being threatened.
Talent shortages are particularly acute in the Americas and Asia-Pacific. Employers in the US (45%) and Japan (45%) are having the most difficulty in finding qualified professional talent, with both countries citing sales representatives and engineers as the two positions being the hardest to fill. Jeffrey A. Joerres, chairman and CEO of Manpower, warns that, "Employers will have to work much harder to retain and optimise their existing permanent professional employees, and develop innovative ways to attract and retain new talent. Developing a strong employer brand will become even more important as the war for talent heats up."
Wage inflation was seen to be most prevalent in Asia-Pacific. Employers in Singapore (55%) and New Zealand (40%) reported that increased competition for available professional talent was causing them to pay higher salaries than a year ago. Nearly half of all the 32,000 respondents claimed they would have hired more permanent professional staff if quality candidates had been available.
In Europe, however, France (8%) and the Netherlands (10%) have the lowest number of employers in the world needing to pay higher salaries due to talent shortages. Only 14% and 15% of Norwegian and Belgian employers would have hired more staff if appropriate candidates were available.
What conclusions can we draw from these statistics? It is evident that there is a global imbalance in the availability of talent, with Europe being the clear winner. David G. Demetrius, chairman of the Continental Europe Institute of Directors, believes that Europe cannot compete on price, so it has to compete on talent. The question is how Europeans can harness this competitive advantage and turn it into long-term benefits. "Education and skill development are vital in maintaining this advantage," commented Demetrius.
There is also a warning for all those firms who are fighting to get their piece of emerging markets such as China and India. At the moment there seems to be a finite number of qualified professionals available. However, it is dependent on the sector you are working in. The Julius Baer Group, Switzerland's largest dedicated wealth manager, has just opened two new offices in Hong Kong and Singapore. "Asia is not only a key strategic growth region, but also our biggest growth story, and we are proud to be represented with such a talented and experienced team here in Hong Kong," said Alex W. Widmer, private banking CEO of the group, whose founding Baer family are still major shareholders.
Though established family businesses usually have few problems in attracting employees – some companies employ multiple generations of the same families of workers – expansion abroad or the need for non-family managers can mean that finding the right person for the job may not be as easy as it once was.
Sandy Pepper, a partner at leading professional services firm PricewaterhouseCoopers, believes that companies in fast-emerging economies need to base their HR policies around the recruitment and retention of skilled staff at all levels. "BPO companies in India are finding that staff turnover among new graduates can be as much as 50% per year, largely because of pay," he says. "Reward management systems are clearly very important in these circumstances."
Developed economies on the other hand require more complex strategies. "Here, the issue is that a small number of highly-skilled people can have a significant impact on company performance," says Pepper. "While compensation is important, the issues here are much more complex – learning and development, career management, work–life balance, even the working environment all come into play."