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This chapter is from the book

Talent Management: A Surplus of Workers and a Shortage of Required Competencies

Talent management refers to an approach that organizations use to attract, develop, retain, and mobilize employees who are most valuable and important to their strategic success, both domestically and internationally. Attraction entails putting policies and practices in place to recruit and select talent. Developing includes policies and practices that provide talented individuals with work and career-related competencies. Retaining refers to developing policies and practices that deter talent from leaving an organization. Mobilizing includes implementing policies and practices that facilitate movement of talent across regions and countries.

An important notion behind talent management is talent shortage, which occurs when employers cannot find skilled individuals in the workforce to fill positions. As Table 1.3 indicates, talent shortages are a serious concern for many organizations in a majority of countries in times of economic prosperity, as well as in times of economic uncertainty and economic/financial recession. For many organizations, especially in the service sector, shortages become severe across a wide range of positions when economic conditions improve.

Table 1.3 Top Five Countries with Talent Shortages

201113

201214

201315

1. Japan

1. Japan

1. Japan

2. India

2. Brazil

2. Brazil

3. Brazil

3. Bulgaria

3. India

4. Australia

4. U.S.A.

4. Turkey

5. Taiwan

5. India

5. Hong Kong

Source: ManpowerGroup’s research on Global Talent Shortage

There are three important reasons why employers have difficulty sourcing or finding talent:

  • There is a gap between the competencies applicants have and those that are needed to be effective: This can occur when job requirements change rapidly or when there is a mismatch between the competencies that employers require and what the workforce can provide.
  • There are few or no available applicants: This can happen when there is not an ample supply of talent to meet labor demands. In certain industries and occupations such as health care, demand for talent is growing at a faster pace than the availability of talent.
  • Organizations use rigorous selection procedures to screen out external candidates: When selection criteria are too stringent or when organizations are risk-averse with respect to hiring external unknown talent, they face hiring challenges. Ultimately, the organization’s focus is more on developing existing employees.

In the context of talent shortages, the challenge for the learning function is to ensure that the organization is developing current employees for future roles and positions. Providing training and development to current employees is a popular strategy used by most organizations to retain talent.

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