The 21st-Century Talent Shortage

With baby boomers retiring and other companies luring away key talent, is your company ready to fill the talent void, or unprepared to deal with the shortage of talent to manage business operations and growth?

Succession planning is a boardroom topic discussed from time to time; however, almost all companies fail to set-up a program organizationally that can deal with forecasted labor shortages in the not too distant future.

Studies show only about 50 percent of companies has in place a succession plan framework. Those that do, generally have only a process that is aimed at the executive level. Over 90% of companies are insufficiently prepared to ensure critical management and customer-facing positions are filled to levels that safeguard revenue, service and their brand over the next decade.

Secession planning is like changing a tire on a moving car. Human Resource groups are caught up in principally a reactive function that includes a variety of activities – current staffing needs, recruiting and training employees, documenting performance, dealing with performance issues, ensuring company practices conform to various regulations, managing employee benefits and compensation, overseeing employee records and personnel policies. In tandem, front line management is over-involved day-to-day in meeting sales and earnings objectives while ensuring customer service levels and competitive innovation are greater than before. The byproduct of this present-day busyness is no solid strategic plan for long term talent acquisition in what will be the tightest labor market in US history.

How then, do you go about it? A starting point is to better document, analyze and discuss current talent management activities and benchmark this information against an assessment of future needs for talented people. 78 million baby boomers will begin retiring in the next few years, and will continue to do so through 2031 when they reach full eligibility, so any plan should be at least a 10-year plan.

A simple understanding your organization's future talent needs can be made—in raw numbers—by taking into consideration historic turnover statistics, a projection of the number of people currently in the organization likely retiring out, and the amount of new positions created through planned expansion.

Then, organize the performance review process to obtain accurate data regarding existing talent—this process must include measurements of individuals’ performance, as well as indicators of potential and readiness objectively. Using only a few performance indicators based on outcomes to specific performance objectives will make it possible to rank employees and present a clear view of the band of talent in each job family. Where an organization marks the ranking in terms of high, moderate, and under performing employees adds that the count of future talent requirements. Talent assessments need to be methodical, data-driven, consolidated and be graded to be a strategic tool.

The summation of these measures sets the groundwork for a realistic approach to acquiring and developing talent for the future. Bring Human Resources and front line Management together to ask important questions: What needs to be improved? Who are motivated to improve? What knowledge and skills do employees need to succeed in their work? How can what they have learned be applied and retained? Can ongoing performance be measured accurately? If talent cannot be developed internally, how can we acquire the talent from outside the company? How do we go about dealing with these gaps?

Adapting an organization to prosper in a talent war is difficult, and one should not act as though it can be done easily. However, this difficulty and the implications of change for the organization, should be cause for failure to act.

“Great things are accomplished by talented people who believe they will accomplish them.”
–Warren G. Bennis