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The well documented War For Talent coined by McKinsey & Company almost two decades ago has intensified to levels not conceived by even its astute authors.  Originally more a statement about the demographic challenges of a decreasing supply of post-baby-boom workers to replace baby-boom retirement in the then greater Western world, it’s painfully clear that identifying, attracting and retaining talented employees is now No.1 critical priority for any CEO well beyond any philosophical analysis of corporate demography.  And if you subscribe to the view that people are the only sustainable point of differentiation in modern industry and commerce then I believe it pays to examine why great people are now so hard to find…

Firstly, let’s give credit when due. Virtually everything McKinsey’s predicted has come to the fore!  The US, Europe, Eastern Europe, Australasia et al have all suffered from the demographic bulge of baby boomers entering retirement and leaving a gaping hole in the workforce. There are simply not enough workers from the following generations to backfill the labour market whilst maintaining aspirational economic growth rates of 2-3%. But that’s the simple analysis.  More alarmingly for countries like Australia and the UK, the problem is more deep-seated, and on many levels.

The globalisation of the world economy means that talent is now traded in an open market place with fewer restrictions and more incentives than ever before. With multinational companies like SAP standardising ERP solutions for instance,  high quality employees with that technical skill set can comfortably work anywhere in the world wide SAP network, helping other countries come up to speed in terms of international best practice standards.  Nowhere is this global War For Talent more pronounced than in the CEO arena as demonstrated by the enormous salaries these captains of industry are paid.  Don’t complain about it – just recognise that that is what you have to pay to attract and retain world class leadership in the most competitive of labour markets. The consequences of not having that leadership quality at the helm can mean death for a company with potentially hundreds or maybe thousands of employees on the streets without a job so the ROI is a simple one to justify in terms of economics if not philanthropy.

Tax regimes are very effective at either attracting or repelling the flow of capital (and consequently jobs) around the world. One of the best examples of a country on the smart side of this equation is Singapore whose current highest personal income and effective corporate tax rates are just 20% and 17% respectively. Compare this with the current Australian rates of 47% (incl. the Medicare levy) and 30% respectively and you begin to understand, in part, why Singapore has become such a commercial hub for the APAC region with many major corporations relocating their Head Office to this forward thinking regime in recent times. As a result, the bigger jobs, paying more money, with more responsibility and better international career potential are drawn to Singapore like bees to the honey pot and many of the best and brightest executive talent in Australia has been siphoned off accordingly leaving chronic skills shortages in some job categories.

Support For Entrepreneurial Business Culture, or lack thereof, is clearly another major factor behind the executive brain drain in Australia, making it much harder to attract and retain quality people onshore.  It was highlighted last year that Aussie Entrepreneurs were flooding to the greener pastures of Silicon Valley – no fewer than 22,000 at last count! They went because they were allowed (even encouraged) to fail by a deep reservoir of capital in Silicon Valley meaning that’s where all the deals are being done. Once there, it’s tough to persuade Aussie expats to return. The venture capital industry and culture in Australia looks decidedly pedestrian by comparison but many people hope and trust this is now being addressed with Australia now being led by Malcolm Turnbull, a true entrepreneur by any measure and someone who understands these dynamics.   

The demands of modern business are now so complex there is, by definition, a smaller pool of people able to perform the function to the competence required.  When I look at some of the Search mandates we are now running, I often compare the same role to its equivalent of say a decade (or even 3 years) ago and the position descriptions and person profiles now command so many more cutting-edge, cotemporary skills, knowledge and personal attributes that the shortlists of realistic candidates can often be counted on only one hand.  Generally speaking, the modern executive can no longer be just a subject or discipline expert. Now, they must also have base line competency and hands-on experience with business processing outsourcing paradigms; service level agreement management; cloud technology deployment; offshore labour arbitrage realities; and much more! 

If ever you doubted it, be assured that we are now very much in a CANDIDATE SHORT MARKET and will be for the foreseeable future.  But I have argued that great candidates are always hard to find, let alone employ – it’s just that as the whole game gets tougher their importance to the Enterprise is now more obvious than ever before.

Over a career spanning 22 years, Greg Tanna has established himself as an executive recruitment leader in Executive Search, Selection & Contracting for APAC Customer Interaction Management across BPO, ICT, Sales, Service, Analytics & Consulting sectors. Feel welcome to make contact with Greg @ www.tanna.com.au