The time is now

Susan Meisinger

Susan Meisinger, President and CEO, Society for Human Resource Management (SHRM), writes for Corporate Finance on the need to address the talent shortage

Organisations around the world are facing a potential loss of skills, knowledge and leadership over the next five years as a massive exodus of older workers draws ever closer. And a new study suggests that most are not prepared for it.
Only 14 percent of organisations worldwide report they’re ready for the future shortage of qualified workers, according to a recent global workforce planning study by The Infohrm Group, a workforce planning, reporting and analytics firm with offices in London, Washington DC, and Brisbane, Australia.

The study, titled Global Approaches to Workforce Planning: What is Working?, culled data from 187 small, medium and large organisations and was the first of what Infohrm expects to be an annual survey on the issue.

The fact that an enormous ‘brain drain’ is looming should not be a bolt from the blue; the issue has been the subject of much organisational and institutional hand-wringing in recent years. What is surprising is that so few organisations have acted to address the situation, despite repetitive alarm bells raised by government institutions, academia, and the business and mainstream media.

This condition is widespread around the globe, but a few countries have been more proactive than others in seeking to address it. Organisations in the European Union and North America are lagging the most. While 22 percent (a paltry number in itself) of Asia-Pacific firms reported being prepared to “a large or very large extent,” only 10 percent of European respondents and 6 percent of North American firms said the same.

Sense of urgency
The survey report noted that while many European and North American organisations are “increasing their sense of urgency surrounding workforce planning,” the issue is “as severe or perhaps more severe than it’s been.”
Seventy-nine percent of the organisations surveyed reported a big gap in their talent pipeline, and 40 percent of their executives rate the problem as ‘acute.’ Only 24 percent reported having ‘to a large/very large extent’ a formal workforce planning process; 43 percent report having a formal process “to some extent.” Do the math: this leaves 33 percent with little or no workforce planning. The fact that so few organisations have adopted such plans is cause for concern.

In response to the looming skills shortage, many organisations have focused on plans to retain older workers through phased retirement or flexible work arrangements. But merely retaining older workers will not be enough. Retention efforts must be integrated into a comprehensive workforce planning program, a process to assess workforce content and composition to respond to future organisational needs. Workforce planning involves an analysis of the gap between what an organisation currently has in the way of talent and what it will need in the future.

Workforce planning benefits include the ability to identify and staff a workforce better by creating targeted recruitment strategies and to better allocate resources within the organisation, all of which can lead to significant cost savings, improved efficiencies and increased productivity .A comprehensive workforce plan provides a strategic basis for making recruiting and staffing decisions.  It allows organisations to plan for change, and provides a strategic basis for addressing anticipated workforce issues.

Anticipated changes
By drawing on demographic forecasts, retirement projections and succession planning, the workforce planning process yields refined information on changes to be anticipated; the skills and knowledge that retirements, resignations and other events will take from the workforce; and key positions that will need to be filled. This in turn allows organisations to build broad sourcing programs, plan replacements and changes in workforce competencies, and link workforce talent with organisational strategies.

Organisations without workforce planning programs should call on their human resource professionals to develop and implement them. HR professionals whose organisations are involved in workforce planning should conduct a comprehensive review to ensure that their programs are focused on long-term needs and aligned with organisational objectives.

The impending talent shortage is real. Organisations worldwide — indeed, the global economy — will be adversely affected if it is not addressed. The time to begin is now.

SHRM is the world’s largest association devoted to human resource management. The Society serves the needs of HR professionals and advances the interests of the HR profession. Founded in 1948, SHRM has more than 225,000 members in over 125 countries, and more than 575 affiliated chapters. For further information please visit: www.shrm.org