West Perth, Australia (PressExposure) September 11, 2009 -- Recent research from the National Institute of Labour Studies indicates that unlike previous recessions, the skills shortage of 18 months ago has influenced companies to hold onto staff, rather than hiring and training young workers to boast the skills pool.
Professor Kostas Mavromaras from the Institute, highlights that generally employers want to keep experienced staff and typically cut training when business is down. In doing so they set themselves up for future shortages of qualified people. In this recent financial crisis, we see companies avoiding laying off many of their older workers, which differs from previous times.
This is a bonus for the baby boomers, who have watched their retirement age increase as their superannuation decreases. However, it's not so beneficial for the younger generation of workers who are going to be left with serious skill gaps in the future.
It is over a decade ago that McKinsey's strategic paper on the impending "War for Talent" was released, spurring HR leaders to upscale their talent attraction and talent management strategies. A key driver identified was the threat of the aging workforce and the impact this will have on our business world in the future. Aptly coined, the world population 'pyramid' will transform into a population 'coffin' by 2045 due to the changing age distribution. This will impact labour force participation and potential economic growth.
For many companies, the impending skills shortage is just something they will have to deal with in the future. Right now the focus has been on reducing costs and training has been one of the cuts on the top of that list.
Research suggests that some companies have cut training to the bone, while others have only reduced what they have considered as 'non-essential' training.
Leadership training you would think would remain on the company training agenda as an essential item. After all the leaders of the company are the very people who are being looked on to help the organisation pull through the tough times, spot the opportunities for growth and accelerate the company out of the economic downturn.
In addition, leaders are being looked on to drive employee engagement and productivity. With over 21% of the current Australian workforce disengaged, company management certainly has a task ahead of them. There is also the emergence of a new 'style' of leadership requiring additional skills such as building resilience and leading in crisis, that leaders need as part of their armour for future success.
If you think developing employees can wait until the dust settles and the economic resurgence begins, think again. Not only does this send a clear message to the people whose talent is the most highly valued, it also leaves your organisation vulnerable to under-performance through skills shortages and you may find yourself left behind in the wake of your competitors when the market turns.