How to keep the talent pool full
Every year, the world's biggest consultancy firms, human resource agencies and multinational and foreign companies - and to a lesser extent mainland businesses - invest enormous amounts of time and money in studies to understand and attempt to overcome the talent shortage.
This is understandable, as in an increasingly globalised world of razor-thin margins, the constant need to add value to achieve business sustainability lies not in advanced technology but in the people behind the machinery.
By and large, companies have acknowledged a pressing need to nurture talent through training and development programmes that add value to its human assets. The crux, however, is in the depth of corporate commitment to developing human capital and the extent that it is integrated into strategic business planning. In a fast-changing and cut-throat business environment, such commitment may be challenged by pressure from the board, shareholders and a market accustomed to the delivery of speedy results.
Nonetheless, many companies operating on the mainland have established long-term relationships with universities in the country that include donations to faculties, offering scholarships and internships, and backing research as a way to facilitate recruitment and ensure a supply of talent for entry-level jobs.
In a research report last month on how to address the mainland's growing talent shortage, management consulting firm McKinsey pointed out that an important objective of these company-university relationships should be to identify talent at a much earlier stage - as early as the second year of university.
IBM, one of the corporations building bridges to education on the mainland, has formed partnerships with several universities, made donations to educational institutions nationwide and collaborated with the education ministry to improve teaching and curricula, the consultancy said. Without doubt, investments like these are long-term, exhaustive and costly, and do not deliver immediate results, but they are proving necessary for companies in order to expand, and contribute to the corporate social responsibility scorecard.
While recruiting talent is an issue, having the right managers to capitalise on each employee's strengths and minimising weaknesses is another. An incompetent manager is likely to trigger a chain reaction that would result in a failure not only to inspire staff and build team spirit, but also to deliver expected outcomes.
Like it or not, human resource output is a highly intangible asset that can easily become a liability.
The McKinsey report said the mainland faced the dual challenge of aggressive business-building goals and an inadequate talent pool. In turning the situation to their advantage, therefore, top companies should introduce initiatives to develop new leaders - who may be relatively inexperienced - internally, and bring experienced leaders from outside up to speed systematically.
The key to success is matching the right people to the right initiatives, it said.
As mainland companies expand abroad, their hunt for competent managers will add to the demand for talent worldwide. McKinsey said a survey of executives on the mainland found that 43 per cent of respondents expected the proportion of foreigners in senior management teams to increase over the next three years. Another 44 per cent said a lack of managerial talent was a barrier to conducting business outside the mainland.
With inflation a growing factor, companies have a natural tendency and every reason to trim human resource costs. Stories are aplenty of companies reducing headcounts in the name of restructuring that either reflects a logical decision or merely an excuse to downsize. Remaining competitive is fundamental to the success of any company, but a short-term human resource saving may not bode well for the longer-term business development picture. Addressing both the talent shortage and rising costs is a tough balancing act.