World Economic Forum Annual Meeting 2007

Economic Drivers of Growth: What's Next in the changing world of work
By Jeffrey Joerres, Chairman and CEO of Manpower Inc., a world leader in the employment services industry.

Continual changes in global labor-force dynamics are having a major impact on the way employers around the world conduct their affairs. The global war for talent has become a reality, and companies can no longer ignore this economic fact of life. Now is the time for companies to adopt innovative global strategies to find and retain top talent.

Recent Manpower research on the global talent shortage and its effect on wage inflation confirmed what we have been hearing from our clients and seeing in global labor markets. The talent shortage is threatening growth opportunities for many companies, and 25 percent of employers are being forced to pay higher salaries for permanent, professional positions compared to a year ago, according to a recent survey we conducted.

Interestingly, the world’s most populous country is experiencing the most acute talent shortage. China’s talent shortages are largely driven by the country’s rapid economic growth over a relatively short period of time. As the Chinese economy grows and moves into more value-added work, the challenge of attracting and retaining staff is rising with skill levels, as demand outstrips supply. Lacking a well-established talent pool of mid- and top-level leadership is hampering the economic growth of Chinese and foreign-invested businesses.

The problem will not just go away. In the next several years, the talent shortage will intensify and the war for talent will become the war for engagement. Engaged employees work harder, satisfy customers, attract sales and employees, contribute to long-term performance and growth, and are retained. Organizations need to become “employers of choice” and more adept at attracting the talent they need and retaining it for the long haul. The organizations that have determined how to recruit the right people, retain them past retirement age, and keep them engaged, motivated and productive, will realize distinct competitive advantages.

Many economies have a wealth of untapped labor pools, representing an opportunity to gain an edge on the competition for employers who are able to determine how best to engage these individuals successfully in their workforces. Unemployed or under-employed individuals: the disaffected, jobless youth; single mothers, people with disabilities; part-timers who would prefer full-time employment; and older workers needing to work longer to subsidize their shrinking pensions, all could be brought into the workforce to fill talent gaps. Governments can do their part to embrace these diverse categories of potential labor sources by creating the right legislative and regulatory climate for employers to make these individuals fully active in the economy. Consequently, employers will need to cast aside stereotypes and recognize that age, race and gender are not indicators of ability, but rather skills, expertise, and the capacity to learn are what matters.

Preparing and adapting for tomorrow’s changing employment landscape, recruiting from alternative labor pools and understanding how workers want to work will be how the most desirable employers set themselves apart in the future and remain ahead of the game. The companies that attract and retain quality people with the strongest skills in this tough, dynamic and competitive world of work will be the engines of world economic growth and prosperity.

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