BCG study: aging workforce creates talent gaps

by Editor 5/30/2008 3:54:00 PM

Managing talent is the most critical human resources (HR) challenge worldwide and will remain at or near the top of executive agendas in every region and industry for the foreseeable future, according to a new global study conducted by The Boston Consulting Group (BCG) and the World Federation of Personnel Management Associations (WFPMA)/Canadian Council of Human Resources Associations (CCHRA).

Key findings of the report, Creating People Advantage: How to Address HR Challenges Worldwide Through 2015, are being released in Canada today.

The study, which is based on a global survey of 4,741 executives in 83 countries, found that managers also rated improving leadership development and managing work-life balance as urgent priorities. The report provides rankings and analyses of 17 HR challenges in seven major regions of the world and suggests specific actions to address those issues.

"Our workforce is aging, and demand for talent is increasing. Finding talented, future leaders has become more difficult than raising financing," said Kilian Berz, Canadian Organization Practice Leader and managing director of The Boston Consulting Group (BCG). "Many Canadian companies serve global clients, but their leaders have limited global experience. It is critical to re-evaluate how to recruit." He adds, "This is also a big challenge for our own business."

This will place exceptional pressure on the financial services, consumer goods and energy sectors. With nearly 24 percent of the population projected to be older than 65 by 2031, the study notes that over 78% of Canadian companies expect that by 2015 - or earlier - they will be offering flexible employment options to attract or retain semi-retired or retired employees.

Managing talent ranked as the most important HR challenge in 9 of 17 countries analyzed in depth, including the United States, Australia, Singapore, Japan, and the United Kingdom, and was at least in the top three in 14 of the 17 countries - a reflection of increasing globalization and competition.

To help address this challenge, executives from all regions, including Canada, expect their companies to boost global sourcing of talented employees. Although few companies today are moving businesses to new locations to access people, Canadian executives expect this to be the most rapidly growing HR trend through 2015.

"The study, the most comprehensive review of global HR practices ever conducted, provides piercing insight into the current and future challenges facing companies," said Florent Francoeur, Past-President of the WFPMA, one of the world's leading HR organizations, and President and CEO of l'Ordre des CRHA et des CRIA du Québec, the Quebec Human Resources Association.

 

Other Challenges: Improving Leadership and Work-Life Balance

Improving leadership also ranked as a top three HR challenge in 10 of the 17 focus countries, including developed nations such as Canada, the United States and Japan as well as emerging markets such as China and India.

Demographic shortages will create competition for experienced leaders in Canada. "As the executive pool shrinks and as shareholder expectations and board accountability continue to rise, we anticipate HR strategy will be fully integrated into the overall corporate strategy. For some it already is, while for most it is often an afterthought and mostly focused on the upper echelons during talent transitions," said Marc Gilbert, a partner and managing director with BCG in Toronto. "More and more, HR strategy is being discussed at the board level."

Managing work-life balance was also rated a key future challenge in every region except the Pacific Region and a top-three priority in Argentina and Chile, Brazil, Canada, India, Italy, Singapore, and South Africa.

"In Canada, two thirds of women with children under the age of six are employed, so the importance of this topic in Canada is not surprising," said Lynn Palmer, CEO of the Canadian Council of Human Resources Associations. "Some 82 percent of Canadian executives said they expect their companies to offer flexible work arrangements by 2015, and 74% expected their companies would be offering part-time work as a work-life balance initiative by 2015, up from 61 percent in 2007."

"Companies are forced to enhance their offering to further employee loyalty," noted Gilbert. "Employees, especially the most talented ones, often make career choices based on factors such as flexibility and emotional gratification."

 

About the Methodology of the Study

BCG and the European Association for Personnel Management (EAPM) conducted the Web survey in Europe through January 2007, receiving 1,355 responses from HR and other executives in 27 European countries. In conjunction with that survey, during May 2007, we interviewed 102 senior executives in Europe. Between September and November 2007, a global Web survey was conducted in cooperation with the WFPMA, eliciting an additional 3,386 responses from participants in 56 countries. This survey was rounded out with 118 interviews with executives from those countries. In all, the two Web surveys elicited 4,741 responses from 83 countries, and BCG conducted 220 interviews with senior executives.

 

About The Boston Consulting Group

The Boston Consulting Group (BCG) is a global management consulting firm and the world's leading advisor on business strategy. We partner with clients in all sectors and regions to identify their highest-value opportunities, address their most critical challenges, and transform their businesses. Our customized approach combines deep insight into the dynamics of companies and markets with close collaboration at all levels of the client organization. This ensures that our clients achieve sustainable competitive advantage, build more capable organizations, and secure lasting results. Founded in 1963, BCG is a private company with 66 offices in 38 countries.

For more information, please visit www.bcg.com.

 

About the Canadian Council of Human Resources Associations

The Canadian Council of Human Resources Associations (CCHRA) is a collaborative effort of human resources associations from across Canada, which represents more than 33,000 professionals, 18,000 of whom hold the Certified Human Resources Professional (CHRP) designation. In less than 15 years, the CHRP designation has become the symbol of excellence in human resource management.

 

About the World Federation of Personnel Management Associations

The World Federation of Personnel Management Associations (WFPMA) is a global network of professionals in people management. It was founded in 1976 to aid the development and improve the effectiveness of professional people management all over the world. Its members are predominantly the continental federations, which are made up of more than 70 national personnel associations representing over 400,000 people-management professionals.

For more information, please visit www.wfpma.com.

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