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Human Capital Management – New Generation IT Talent Management

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The IT skills shortage is set to worsen leading up to 2010 – globally![1]  And it has nothing to do with soccer!

What does this IT skills shortage mean for Human Capital Management in South Africa?  Well, for one thing, it means that there is going to be increasing pressure from outside of South Africa for our high-level skills to move to the developed world – UK,USA,Australia.  Not because of crime, not because they’re not happy – but because they CAN!

Hewitt Associates, in their report “Next-Generation Talent Management” identified five key workforce trends that are going to cause dramatic changes to the way that people are managed.

  1. A smaller and less sufficiently skilled workforce.  With negative population growth rates in the developed countries resulting in smaller populations of working-age people, there are not sufficient people, never mind sufficiently skilled people, available to take the places of the retiring “baby boomers”.  It is forecast that, by 2010, there will be 10 million more jobs than available workers in the USA[2], and a decline in the 30 to 44-year old workforce of 3 million[3].  Another significant observation is the physical and virtual migration of workers and jobs across the globe.  It is anticipated that “worker migration” will create a globally competitive workforce until at least 2016.  However, the “younger” workforce will not have sufficient skills and experience to take the place of those leaving the workplace.
  2. An increasingly “Global” workforce.  Today, more than ever before, the geographic boundaries are crumbling for the current, more mobile, workforce.  With technological advancements, today’s workforce is able to market itself beyond local or national boundaries, and workforce mobility and migration are on the rise.  This applies equally to “electronic immigrants” – workers who take jobs in other countries without actually immigrating[4].  Jobs too are on the move.  Jobs are being relocated, (offshored) to places that best match organisational needs in terms of labour, skills, costs, and capacity.  It is forecast that this will increase in the USA to between 30% and 40% of their jobs being offshored by 2010[5].
  3. A highly virtual workforce.  With the advent of wireless communication, high speed broadband connections, laptops and PDAs, the workforce today is “freed” from their desks and traditional “nine-to-five” work schedules.  The number of employers with all employees working from the office was expected to have declined from the then current 46% to 20% by 2005/2006[6].  Increasingly today’s workforce are part of a global talent supply chain working across disparate nations, social strata, companies, professions and job classes.  “Virtual co-working” and the “virtual workspace” are creating a workforce that sees no limits to jobs[7].
  4. A vastly diverse workforce.  With the shortage of an available, skilled workforce, “retirees” are opting to return to the workforce until 70 or more.  In the USA, workers are staying in the workplace for an average of 15 years beyond the age of 55[8], and 80% of the “baby boomers” are expected to keep working past the age of 65[9].  There are now more generations in the workforce than ever before, and significantly large numbers of women have entered the workforce, representing 40% of the global workforce[10].  The traditional notions of a “man’s” job and a “woman’s” job have broken down, and traditional attributes of age, sex, culture, etc., must be abandoned to cope with the growing diversity.
  5. An autonomous and empowered workforce.  The trend to “knowledge” work, technology-based communications, and the ready availability of top quality information via the Internet, is presenting today’s workforce with the knowledge and skills to be able to make better decisions about how they do their work, and where they do their work.  Employees are no longer limited to one organisation or career path, and organisational “loyalty” is a thing of the past.  In fact, in the modern organisation, experience with other employer organisations is seen as an asset.

But what can we do about it, and, more importantly, what SHOULD we be doing about it.  In the “Next-Generation Talent Management” report, Hewitt Associates suggest 5 practices in Talent Management that will need to be adopted by future focussed organisations.

  1. Predictive workforce monitoring and strategic talent decision-making.  As with any scarce resource, the need to understand, predict and plan becomes paramount.  The emphasis of effective HR measurement will move to anticipating and predicting future talent needs.  The identification of “key competencies” needed for the organisation to achieve its goals and the management of those competencies is becoming the “order of the day”.  “Only by practicing workforce monitoring and planning on an ongoing basis will organisations have sufficient lead time for acting on the opportunities and challenges that present themselves.
  2. Flexible and anticipatory talent sourcing.  Organisations will use a broader spectrum of talent sourcing practices and relationships.  Older and retired workers will be recruited into organisations, especially in the more highly skilled areas.  Internally, organisations will maintain a “talent inventory” – that is, an inventory of the talent and competencies that exist in the organisation.  This is used for further development, fast-tracking, fast deployment, and strategic workforce planning.  The different types of employment relationships that are developing include growth in part-time and temporary work, contracting, flexitime, reduced hours, flexible-schedule work, telecommuting, job sharing, on-call work, ageless internships, and non-traditional shift work.  Organisations are also adopting new anticipatory sourcing strategies, such as: preparing employees in advance for potential roles, continuous learning opportunities, matching of employee long-term plans with work opportunities, “cloning” best-fit employees, the use of “head hunters” to monitor internal and external talent, the evaluation and analysis of employee aspirations and capabilities, and coaching.  In fact, Hewitt Associates found that using such talent supply chains is a common practice in organisations that consistently achieve double-digit profit growth.  Successful organisations will adopt a variety of strategies to ensure a continuous supply of appropriate talent.
  3. Customised and personalised rewards and communications.  Many organisations are already using the employee-customisable Total Cost of Employment model.  These models in the future will offer reward “menus” tailored to groups of employees or individuals or competencies and tied to role and performance – not years of service.  Choices will broaden to include choice in work assignments and location, time and money for training, and flexitime.  Organisations will base rewards on results achieved in line with business strategy – not hours worked.  The challenge for HR will be creating customised rewards menus that attract, motivate, and retain a broader spectrum of employees, without increasing the total rewards budget.
  4. Distributed and influential leadership.  “To get the most from a workforce that’s short on experienced talent, globally dispersed, virtually connected, and prepared to be authoritative on the job, organisations will distribute leadership responsibilities throughout the organisation and transition traditional leaders from commanding to influencing”[11].  The organisation of the future will manage business processes through people – not manage people.  Employees will have the competence and the authority to make decisions within their “node” of the business process, collaboratively and individually.  This requires that information and knowledge sharing processes and systems are in place and that “traditional” leaders in the organisation are “transitioned” by developing the skills and abilities necessary for the new leadership environment.
  5. Unified and compassionate cultures.  In new-generation organisations, self interest, worker difference and distance will be minimised, and in their place will be a culture of inclusion, promotion of collectivist values, and reward for collaborative contributions.  Organisations will allow workers to take charge of arranging workdays and work weeks according to both work and personal demands and requirements, balancing place of work and time of work with family and personal demands.  Organisation will also minimise job insecurities in their workforce, presenting an accurate picture of employees’ job security at all times, and providing development and outplacement services to employees whose jobs are at risk.

The world of HR is about to change, dramatically and irreversibly.  Talent Management practices currently in use were designed for an abundant, isolated, homogenous, and employer-dependent workforce.  This no longer applies.  The new workforce needs a new generation of talent management practices.


[1] Source:  US Bureau of Labor Statistics
[2] Lockwood, Nancy R., “The Aging Workforce”, HR Magazine, December 2003.
[3] Heet, Justin A., “Beyond Workforce 2020: The Coming (and Present) International Market for Labor”, Hudson Institute, 2004.
[4] Budman, Matthew, “Will We All Be Unemployed?” Across the Board,January 1, 2004.
[5] “Employer Perspectives on Global Sourcing”, Hewitt Associates, 2004.
[6] “Innovation: Remote Working in the Net Centric Company”, The Economist Intelligence Unit Executive Briefing,July 15, 2003
[7] “You Can Do Anything, But Not Everything”, Fast Company, May 2000.
[8] Schwartz, Peter, “Inevitable Surprises”,Gotham Books, 2003.
[9] Temple, Paul, “No Retirement for Boomers”, Workforce, July 2000.
[10] Source: International Labor Organization (ILO).
[11] “Next-Generation Talent Management”, Hewitt Associates.

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