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Small Firms Fight Global Talent War
7 July 2011:
At a time when many European countries are putting record numbers through higher education, why is the talent war still raging?
Some possible answers are contained in a major new piece of international research published today. It suggests that the struggle to recruit and retain talent continued right through the recession in Europe, China and Australia – and affects small and medium-sized companies (SMEs) as much as larger ones.
“HR Challenges and Solutions for SMEs: Winning the War for Talent Through Automation and Outsourcing”, published by ADP ES International, the global HR outsourcing provider, reports the results of a survey of 2,642 HR professionals from organizations employing 50 to 2,500 people in eight European countries (France, Germany, Italy, Poland, Spain, The Netherlands, Switzerland and the UK), China and Australia.
Most companies covered employ fewer than 500 people. The report (available at http://www.europe.adp.com/hr-challenges-solutions) provides unique insights into the people management problems of smaller companies which other international research often overlooks. It also provides comparative data on the countries included.
The report draws on expert views and references to other reports to conclude that the war for talent never really went away despite the deepest downturn since the 1930s.
Challenges
Conducted by Heliview in 2010 and independently analyzed by CorporateLeaders on behalf of ADP ESI, the survey shows that hiring qualified people and filling key positions is the most frequently mentioned challenge in seven of the countries covered.
The HR professionals surveyed were asked to list their most important challenges, issues or problems. Overall, 33% mention “hiring qualified people/difficulties filling key employee positions”, 27% “problems retaining qualified people” and 24% “developing managers and employees with high potential.”
The exceptions are the UK and China, where the search for talent is still among the top three issues most often cited, and Poland which is more concerned with the wage bill and labor laws.
The report also quotes from other surveys which found the same concern with talent over the past two to three years, although these were looking at larger organizations. Why did the recession and expansion in higher education not have a bigger impact? The report offers four possible reasons:
• The aging workforce
• Growth of the knowledge economy
• Rigidities in the labor market
• Changing attitudes of younger people
Solutions
Ways in which companies are tackling these problems are highlighted by two case studies highlighting the importance of management development (“growing your own”) and the use of social networking technology for recruitment.
By far the most popular solution chosen by the HR executives taking part was to automate administrative processes. Many companies also expect to outsource HR functions in the next year or two.
The report adds: “In searching for the best solutions, they stress the importance of integration between systems and services for different HR functions. As HR executives, their concerns start and end with the search for talented people to give their organizations a key competitive edge. But along the way they need better information and slicker processes.”
Andre Rampat, director and co-founder of Corporate Leaders, comments: “SMEs historically have a harder battle for talent due to their size and more limited HR resources. As a result, the more agile their core HR processes and systems are, the more time and resources can be freed to deal with the main challenges”.
Summing up the report, Mark Benjamin president of ADP ESI, says: “Defining what is the ‘right approach’ to solve the challenges, whether this is through outsourcing, automation, delegation of tasks to line management and employees, engaging external consultants or adding HR staff, turns out to be as individual as the needs of the organization that the HR function serves.
From years of experience we know that transformation of HR takes time and it is critical to understand all the options available to decide which is right for you.”
