· 2 min read · News

Companies need the right talent strategy to avoid a skills shortage that could jeopardise their recovery from recession

Published:

Companies must put their people first in the recovery or risk experiencing deep talent erosion and sustained underperformance, employers have been warned.

According to a worldwide survey of senior managers, sponsored by StepStone Solutions, two years of cutbacks have undermined workplace trust. Combined with increasing demand for executive talent and a sharp drop in graduate recruitment, the survey has found that companies without the right talent strategies risk developing a major skills shortage just when they need employees' energy and commitment the most.

According to Companies at the Crossroads, researched and written by the Economist Intelligence Unit, nearly one third (29%) of the business executives said employee engagement is low and they expect to lose key people as talent demand grows.  

At the same time, graduate recruitment has also been dramatically affected, with 6% of respondents saying graduate recruitment would be a focus for their organisation in 2010 - compared with 50% of respondents in 2009.  

Meanwhile, talent has moved fast up the boardroom agenda. The availability of talent has risen to overall third as a driver of growth (voiced by 46% of respondents), sitting behind only economic recovery and credit availability.

More than four out of 10 employers (41%) agreed they have a shortage of talent in their organisation and 44% find it increasingly difficult to recruit talented employees.

One respondent in two plans to ramp up recruitment over the coming year;  only 18% still plan to reduce or freeze headcounts, 16% of line managers said that staff were fully engaged with the business, yet this is not recognised in many boardrooms, with 38% of CEOs saying that trust is ‘high'.

The top three priorities for talent investments for 2010 are:

  • Performance management (voiced by 46% of respondents)
  • Leadership development (41%)
  • Training and development (36%)


For younger workers 50% cited career development as their biggest priority, but this dropped to just 1% for the over-50s. Similarly almost 40% of older workers cited non-salary benefits as important, dropping to just 2% among 20-30 year-olds.

 Matthew Parker, group managing director at StepStone Solutions, said: "This research among global leaders shows that they understand the need to focus on their talent, but that greater action is needed today to create talent strategies for the future.  It is particularly worrying to see low trust among middle-level employees going hand-in-hand with low graduate recruitment and an ongoing demand for senior executive talent.  

"Left unaddressed these problems constitute a perfect storm for businesses, as the most capable employees head for the exit and fresh talent is not recruited. These trends have serious, long-term implications for any business in a recovering economy and they require urgent attention."

The survey, undertaken in December 2009, covered over 400 senior managers primarily in major corporations in the US, Europe, and Asia-Pacific.