How do you cope with the increasingly competitive trends in global talent management? We often hear managers and leaders say that the right talent for the job is scarce and that they go the extra mile to retain their talent pool to thrive or even survive.
Nowadays, talent management is one of the major concerns among companies, and the trend is increasingly becoming a global phenomenon. Why? Because they can. Employees get access to online recruiters, apps, and an endless list of job opportunities from job portals. Job opportunities became identical to online shopping, where they can compare openings and then choose their best pick.
Applicants have the power to shortlist companies and job openings more than ever before.
The era of global talent’s empowerment
Thanks to modern technology and a wide range of job opportunities, we have reached the era when employees can climb the corporate ladder dictating their own terms. If an employee experiences a slight discomfort or is disconnected from the company values, jumping from one ship to another has never been easier.
It’s employee’s turf now
During the early onset of the pandemic (2020), millions of people lost their jobs, hundreds of thousands of companies (globally) folded, and the world economies experienced a recession. As the situation started normalizing in the middle of 2021, the market opened for new job opportunities. Before the pandemic, the world economy surpassed numerous recessions, and each recession affected the job market differently.
On top of the recession, it became a global trend for employees to jump ships to find better opportunities. Every time an employee changes jobs, they demand higher rates. It benefits the job seekers but gives the organization headaches in retaining top talents. The job market is increasingly becoming the employee’s turf now. They come and go as they please.
Tenure still matters
Despite the job market being flooded with new employment opportunities, a considerably large number of employees still prefer tenure along with the perks and convenience that come with it. So they stay where they are. And why not? Taking risks of moving from one company to another does not guarantee lasting employment.
With the uncertainties of the volatile job market, quitting can be an irrational option any employee can take. Tenure is typical among the older demographic who prefers stability and certainty.
Although tenure reassures the employees that they will not lose their jobs, it is disadvantageous for the company in terms of performance complacency. If an employee stays in the same company for a prolonged period, they typically become overly comfortable and relaxed in performing their tasks because there is no risk of losing them. It can also prevent them from advancing their career. Though the company can cross-train their employees to upskill and reskill, the final decision stays with the employees if they want to explore further or stays with the same job scope.
Younger talents are ruling
Younger employees tend to move a lot. Full of fresh ideas, theories, and high ideals from college, they thought they could change the system overnight. As they jump from one job to another within a few months to a couple of years (maximum), the organizations are in constant search of new talents they can keep and develop.
Millennials take over the job market
Currently, millennials occupy 35% of the job market and are expected to occupy 75% of the workforce by 2030. Like the younger workforce, millennials display mobility, and their presence is undeniably strong.
With the degree of mobility of millennials and younger employees, talent management remains a challenge for most global organizations.
Freelancers are on the rise
In the last few years, a large number of displaced employees from the recession of 2008-2009, and the new graduates have taken refuge in online jobs. They call themselves freelancers, independent contractors, and self-employed, among other things. Society has witnessed a whole generation of entrepreneurs, coaches, and freelancers dominating the job market. Several freelancing portals sprouted from all over to bridge the geographical gap between companies of all sizes (from various sectors) with freelance workers.
This trend enables companies to reduce their cost and liabilities. Their contract with the freelancers is non-committal and frees them from paying benefits, vacation pay, health insurance, 401K, and other perks they provide their regular employees.
Some companies are experiencing employees quitting en masse due to discontent with their corporate value or management-related issues leading to the rising demand for freelance workers. In 2021, the rate of employees quitting their regular job is back to the pre-pandemic rate forcing companies to adopt a hybrid system to survive their operations. It gives freelancers a steady inflow of job orders.
However, this setup is not for all organizational types. There are processes and job specs that large companies and known brands cannot simply allow freelancers to perform. Likewise, the amount of freedom the freelancers get can easily discourage them from going back to regular employment. As a result, talent management becomes a constant struggle for many organizations.
Global staffing trends
Many (or most) large multinational corporations (MNCs) maintain their market integrity and competitive edge in the global arena by adopting the four approaches to global staffing, ethnocentric, polycentric, regiocentric, and geocentric.
The ethnocentric staffing approach means the company hires employees from their parent country to fill the crucial organizational positions in their global offices. The company can either relocate an existing employee to the host country or hire someone from the parent country who is willing to live in the host country.
This approach is ideal if the company is expanding or opening a branch in a new country so that the implementation of the company rules and policies becomes easier. As a rule, expatriates must not exceed 20% of the hiring cost of the host country.
A polycentric staffing approach means hiring people locally to fill the positions in the host country. Foreign companies need the skills and expertise of local professionals. They can help the company to expand their operation as locals know the market and they possess the necessary skills in conducting business.
A regiocentric staffing approach means hiring and transferring people from the same region. For example in the Asia Pacific Region, a company can transfer employees from Australia to Singapore or India and vice versa at a much lower cost than employee transfer, say, from the US or other western countries.
Although this approach is more cost-effective and convenient than transferring employees from their parent country, some possible barriers have to be taken into account when adopting this approach, like language issues, cultural differences, and religious affiliations.
A geocentric staffing approach means hiring people regardless of nationality and geographical location. For example, a company can hire employees from remote places, and their jobs can be performed virtually (ideal for customer support). Another way of dealing with a geocentric approach is relocating employees to a new host country.
Global operations have many advantages and disadvantages, but in order to build and sustain a talented workforce, companies must use talent management. The core objectives of a successful global talent management strategy are to recruit, develop, deploy, and retain the right talents.
Incorporating Global Talent Management into Business
- Talent management should be aligned with the company’s strategy. Managers and leaders should be well aware of their talent requirements. They must be in alignment with the organizational strategy and maintain strategic flexibility when necessary. Companies should have the ability to adapt to the ever-changing business condition and have the capacity to restructure their approach to handling talents.
- Internal consistency. Consistency is a crucial factor in building a strong pool of talents in the organization. It underscores every practice, communication, and decision in the company to make the business successful.
- Cultural integration. The organizational mission and vision are there for a reason. Although, logically, companies will not violate any law if they do not live up to their written core values. However, it’s a great help to the talent management process if the company integrates its core values into various processes such as hiring, leadership development activities, performance management systems, and compensation and benefits programs. Once cultural integration is in place, recruitment, retention, and talent development becomes natural and seamless.
- Active involvement of line managers. The talent management process of successful companies includes not only HR but all the managers from all departments. Human Resources alone cannot put a spell on talent management. Leaders starting from CEO to junior leaders must pitch in some ideas. One of the potent strategies in the talent management process is to get the line managers involved. They will participate in the decision-making and hiring process, and get accountability for training new talents.
- Balance the global and local requirements. Companies with an international presence must master the art of reaching out to local internal clients by maintaining sensitivities on cultural differences, the local corporate environment, and business practices (country-wise). A coherent HR and management strategy to reach out to locals can resolve (or prevent) any intercultural tensions.
- Maintain a unique (employer) brand. A brand does not only work for consumers but employees too. Attracting the right skills and attitudes goes hand in hand with the unique organizational brand. For example, employers must develop a way (different from competitors) to resolve internal conflicts or a distinct set of perks and career paths. Uniqueness makes your brand stand out.
Difficulties in maintaining high-quality talents?
The quick answer is YES.
Every sector has different talent needs. Before the pandemic, the employment sector had already been struggling to find the right talents, and the ripple effect of COVID-19 even made it harder. Yes, we are still not over the pandemic, and people still worry about childcare, health concerns, and more.
The job market is running short of “right talents.” You did not misread it. There is a huge talent gap in the industry. For example, not enough medical professionals to fill the position in hospitals and other healthcare facilities. The industry doesn’t have enough web developers, computer engineers, AI analysts, and programmers to cope with technological advancements. Applicants claim to know the job but lack the necessary skills and knowledge to perform them. With the suspension of traditional learning and hands-on skills training, the talent gap is widening day by day.
Low-budget job openings are at an all-time high. Due to slow turnover, some employers cannot afford to offer a decent rate to some physically demanding and mentally exhausting positions. Others view this phenomenon as “taking advantage” of the recession. People need employment and are willing to accept offers even if it is a decimation from their previous package to survive.
Millennials and Generation Z are leveraging the popularity of short online courses and video tutorials to upskill and reskill themselves. They jump ships as often as they wish. As we mentioned above, it’s the era of employee empowerment. To some degree, they can beat college degree holders and professionals in landing high-paying jobs
The truth is, it’s a tough time for both employers and employees. People are barely surviving with gigs and short stints with companies that are not offering regular positions. The uncertainties of “what ifs?” and “what’s next?” lingers in everyone’s minds.
It doesn’t matter if you are a freelancer, salaried employee, consultant, self-employed, or wage earner because uncertainties still await. There is no escaping it. Companies are opening their doors for fresh (or returning) talents to join the workforce. Businesses take risks too.
Global talent management is in peril!
There are solutions.
It is job seekers’ turf now, but employers can still save the day, not by aggressive hiring initiatives but by addressing the internal conflict that causes a high attrition rate.
Some attritions are nearly impossible to avoid. That’s why companies must strategize on retaining their best talent as much as possible.
It all boils down to salary and other perks. An organization that can pay good money has the power to retain the best talents in the market, harsh truth.
If your company is not in the position to pay top dollar, your solution is to build a perfect environment and work culture that your employees will not want to leave you. Maybe it’s about time you take HR more seriously for their efforts
Let us help you with your plight in finding the right talent. Start a successful talent management today. Let’s work together!