War for talent continues despite downturn

The economic downturn has caused some organizations to think, quite mistakenly, that since more workers have suddenly become available due to layoffs, downsizing and consolidations, the war for talent is over.

The truth is, the downturn only delays the inevitable people shortage coming as a result of baby boomers retiring in large numbers. It doesn't eliminate it. The demographics have not changed. Within the next five to 10 years, Canada will still have more workers at the age where they can leave the labour force than at the age where they can begin working.

Now is the time for organizations to recruit, train and retain younger workers and ensure they can stay competitive in what will be a more skilled, knowledge-based economy.

A new research survey from the Chartered Institute of Personnel and Development says that recruiting and retaining top talent continues to be a priority for most companies. It was reported that 74 per cent of over 700 participating firms said the new economic realities had not caused them to rethink their people strategy.

Of the remaining 26 per cent, those who had revisited and changed their strategy, one in five said they had placed greater emphasis on identifying, developing and retaining talent. Among the other survey findings:

"While 25 per cent of respondents have had to downsize their operations, they have made a concentrated effort to retain key talent; only three per cent had to let go of top performers.

"Eleven per cent of those surveyed said they were taking the opportunity to scoop up talent that had been let go by the competition.

"Organizations are choosing to preserve the people with the most potential, with 55 per cent reporting that they were nurturing more talent in-house and 45 per cent focusing on essential development.

Although times are undeniably tough, it is not the time for organizations to be scaling back either their recruitment strategies or their employee retention practices, such as personal development. The looming skills shortage is an unflinching reality.

The CIPD report also found that only six per cent of managers believed they were well equipped to manage talent in a recession. Thirteen per cent said they did not think they were adequately equipped at all.

Some things organizations should keep in mind when it comes to recruiting in challenging times:

"This is a great opportunity to hire. Competition is not as fierce from other firms who may be choose to cut back on their recruiting practices.

"Higher unemployment means more candidates are available. This does not only include those who have been laid-off, but those who survived recent cutbacks. They may be unsatisfied working in the conditions they have been left in and may be more easily persuaded to work for you.

"Turnover will decrease. In tough times, people seek job security. This makes it easier to keep top talent that may be otherwise lured away for bigger paycheques but less tenure.

"Avoiding knee-jerk reactions will help you save face. Companies that move toward mass layoffs often suffer damage to their public image. This tilts favour toward companies that appear to be more stable and have remained level-headed in the same conditions.

Use today to plan what your workforce will look like tomorrow. This is the time to do some forecasting and plan how your recruiting strategy will change to accommodate the next "up" economic cycle. It's coming. While organizations may seek out more cost-effective solutions for hiring talent during a downturn, they need to be able to think beyond surviving the short term. They need to be able thrive in the long term.

-- With reporting by Barbara Chabai

John McFerran, PhD, CMC, F. CHRP, is founder and president of People First HR Services Ltd. For more information, visit www.peoplefirsthr.com.

RESEARCH:

http://www.personneltoday.com/articles/2009/02/19/49485/john-philpott-on-why-hr-is-better-prepared-for-a-downturn-than-ever-before.html

http://www.ere.net/2008/10/20/managing-recruiting-during-an-economic-downturn-the-top-10-action-steps-to-take/

http://www.onrec.com/newsstories/23861.asp