Hotel Recruitment: Is a Talent Shortage Looming?
By Paul Feeney, President, Sanford Rose Associates
Self-assessment Can Identify Where Problems Exist
Like the boy who cried wolf, too many prognosticators for too long have been predicting a massive talent shortage - with frustrated employees departing their jobs in droves.
"The new year is expected to usher in a flurry of job hopping," announced USA Today. A large staffing firm quantified the percentage of disaffected employees as being "more than half," while a retained search firm put the number at precisely 42 percent. According to the Society for Human Resource Management, 38 percent of HR professionals believe employee turnover is increasing.
To date, few if any organizations have seen a mass exodus from their ranks. In truth, talent shortages will begin to catch many employers unaware - but that problem is not across the board, nor will it happen all at once. As is often the case, the devil is in the details.
For instance, some occupations are relatively stable, while others are relatively fluid. Some skills are increasingly in high demand, while others have waned. Some departments and business units enjoy exceptionally strong morale, while others are in chaos. And the amount of entropy, or disorder, in a modern organization only increases with size.
For all those reasons and more, it is necessary to dig beneath the surface in order to determine where the greatest vulnerabilities lie. Let's start with supply and demand.
The Wall Street Journal in late January reported that three "hot" disciplines are forensic accounting, corporate security and Homeland Security marketing. Forensic accountants deconstruct financial reports to ferret out fraud; since the passage of the Sarbanes-Oxley Act, no public company or major accounting firm wants to be without one. Corporate security experts, of course, help protect everything from CEOs to the company's computers. Homeland Security marketers specialize in selling high-tech protective devices and services to the U.S. and other governments.
The first two occupations are demand driven, while the third is opportunity driven. All three are creatures of recent history, which means there is a dearth of well-established academic programs and career paths able to grind out job candidates by the thousands. Companies therefore compete for a limited supply of qualified individuals and pay top dollar to get them. Of course, as wages rise, more people will become attracted to such fields, and colleges and universities, will begin offering majors and degrees. Supply and demand will come into balance, and another shortage will disappear.
In fact, wage inflation is a classic early warning sign that demand outstrips supply. If the Audit Department has become the go-to place for six-figure salaries, chances are that good auditors are hard to find. Conversely, if the Sales Department can attract sales representatives year after year for the same base pay and commission rate, one can infer a lot about the pool of available sales personnel.
Advertising constitutes another high-demand occupation, whose warriors are wearing different gear than they did just ten years ago. As consumers increasingly ignore print advertising (who reads anymore?), TIVO their television programming (assigning commercials to oblivion) and zap pop-up ads as fast as they appear on their PCs, marketing chiefs and their advertising agencies have become desperate for a new generation of creative types - home-schooled in such non-traditional techniques as viral marketing and the product as entertainment medium.
Separate from hot and cold positions, let's take a look at workplace conditions. Many hospitals, for example, used to pay nurses poorly and treat them miserably, so significant numbers quit and fewer entered the profession. Stupid hospitals! Now, in the spirit of fair play, how are wages in your organization, how often are they reviewed and by how much have they increased over the past several years? And just how long has "corporate" sat on a pressing personnel requisition, insisting that two can keep doing the work of three? Could poor pay and employee burnout be creating conditions for the perfect storm?
In more than a few organizations, select departments - considered to be the company's crown jewels - fare better than others. Perhaps Accounting suffers while Marketing prospers (although these days it's likely to be the other way around). Accordingly, stress may not be evenly distributed or pay equally restricted. It only makes sense to look for organizational "hot spots" that can't seem to keep employees or attract new ones.
Overall however, the past several years found most employees reluctant to quit. In fact, the worldwide job market - which fell ill in early 2001 and only began to recover in recent years - lengthened employee tenure almost everywhere. Few wanted to trade job security for insecurity in a jittery economy. But, as all those surveys indicate, there well could be a lot of pent-up employee demand that will unleash itself this year and next.
And even though much of the upturn in executive-search assignments (up between 20 and 30 percent at most firms) has been fueled by job creation, more and more of them involve personnel replacement.
Another factor sneaking up on many employers is the aging population in most industrialized countries. With fewer people entering their 40s and 50s, competition will continue to heat up for the best and the brightest. Some workers may seek to retire at a later age, but statistical projections about that potential trend are unclear. An equal number may seek to retire earlier.
Last but not least, executive mobility has become a fact of life for those wanting to reach the top. As reported in the online publication, Knowledge at Wharton, professors Peter Cappelli and Monika Hamori have completed a study of Fortune l00 executives in 1980 compared to their counterparts in 2001. One major conclusion: The number of "lifers" in modern corporations has declined significantly. Today's corporate leaders are younger, more mobile (in terms of job assignments and employers) and more likely to have followed non-traditional career paths. They seek positions with high visibility and opportunities for quick promotion. So treat your rising stars well and be thankful for every year you keep them.
At mid-decade, is a talent crisis looming? The answer is shortage yes, crisis maybe. The shortage won't come all at once, nor will it be uniform. Some occupations will be more affected than others, just as some units in your company or institution may be more vulnerable than others.
What concerns executive-search firms in the year 2006 is that many clients (a) prefer to believe they are still living in the year 2002, when there was little urgency to most hiring decisions; and (b) prefer to follow one-size-fits-all policies concerning employment and compensation (a hiring freeze is a hiring freeze, while a wage cap is a wage cap). Instead, every position opening needs to be evaluated on its merits, with appropriate action promptly taken. The superstar in a talent-starved occupation needs to be wooed with great alacrity (as opposed to indecision) and won with great largesse (as opposed to nickels and dimes). It's guaranteed: Too much time and too little money kill deals.
Paul Feeney is President of Sanford Rose Associates, an Executive Search Firm. Sanford Rose Associates was founded in 1959, is a full-service executive search organization conducting retained and contingency searches through a network of 60+ offices worldwide devotes its practice to all areas of finance, accounting, general management, operations, technology, management consulting and project management for national and international searches. Paul has over 18 years of executive search management and corporate recruiting experience while working in New York, London and Prague. Mr. Feeney can be contacted at 973-492-5424 or firstname.lastname@example.org Extended Bio...
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