Our predictions are now being greeted by loud echoes, with Gartner Inc. recently identifying talent shortages as the top risk faced by businesses. More tellingly, the market is already feeling the pinch. In Australia, Telstra is one high profile example, with CEO Andy Penn announcing the telco will open a new innovation and capability hub in Bangalore later this year. Penn specifically cited the shortage of IT skills available in Australia as the driving factor behind the decision.
Perhaps the most striking aspect of these early rumblings is how widespread the impact is, with no industry seemingly left untouched. Media stories on talent shortages in 2019 alone (keeping in mind it’s only February!) have already covered challenging conditions in the energy, automotive and manufacturing industries as well as a shortage of lawyers in Singapore and teachers in New Zealand.
The pain in APAC will be acute
The pace of change in the APAC region, especially in China, only elevates the talent challenge. Our own modelling puts the labor skills shortage in APAC at 47 million by 2030, with unrealised output an eye-watering $4.238 trillion.
Discussions about the talent shortage are often countered by talk of the potential for AI and automation to replace humans in jobs, mitigating the pain of the crunch for business. In some cases that's true, but technology cannot deliver the promised productivity gains if there aren’t enough human workers with the right skills. The jobs of the future will be about leveraging technological advances, relying on our uniquely human skills and our capacity to constantly adapt or expand those capabilities.
This is the crux of the crunch. Unless leaders act now, there simply won’t be enough people with the right mix of experiences and skills to take on these advanced roles in an increasingly fast-moving and ambiguous environment.
Time to level-up on talent management
We may not be able to escape the crunch, but there are things that can be done to prepare for its impact. We’re already seeing that the organisations that are refreshing or disrupting the way they manage talent are the ones most likely to outperform their competitors.
It comes back to a simple imperative: getting the right employees in the right roles, with the right resources and processes ensuring this. And while everything about the current global environment makes this feel incredibly complicated, we’re seeing the most successful organisations stripping back their talent process to the essentials in service of this central proposition.
Here’s how they do it:
Imperative 1: Simplify and add a dose of objectivity
There’s a growing view among HR leaders that less is more when it comes to talent management process. Simplified, forward-looking processes that are founded on objective sources of information will empower line managers to act quickly and confidently, while enabling talent management to reach the entire organisation (not just the top tiers).
Imperative 2: Make choices and focus
Forward-thinking talent management teams identify the most important talent based on their capabilities and skills to take the company forward over the next decade. This shifts the focus from seniority to capability. It also changes how these pools of talent are viewed within the organisation; they’re seen as an asset that must be developed and supported to realise their competitive advantage.
Imperative 3: Draw on the right information to make the best talent decisions
None of this is possible without the right information. Once HR leaders understand how they want to shape talent strategy, they need to think through how to gather information on employees at all levels of the organisation to make the right decisions about developing, managing and retaining top talent.