In this blog series we would like to touch upon an issue which is fast gaining attention among the CPOs & CEOs globally on account of its direct impact on the organization’s performance –Talent Crisis.

With the economies still struggling and the unemployment rates lingering at high levels – there is a huge talent crisis looming. A recent report from the Hackett Group, 2013 states for 82% of the enterprises, enhancing employee/talent retention and development is of critical importance.

Another report from Mckinsey Global Institute suggests that a high job growth scenario in the U.S. would yield a workforce deficit of 1.5 million college graduates by the year 2020.

In the 15th annual PwC Global CEO survey, one in four CEOs said they were unable to pursue a market opportunity or have had to cancel or delay a strategic initiative because of talent challenges.

Talent crisis has a direct impact on the organizations ability to serve customers better. Let’s have a look at what are the global trends.

• Demographics are the primary reason for growing anxiety around talent. The Baby Boom generation, born from 1946 – 1964, has begun reaching the traditional retirement age of 65. Even if Baby Boomers defer retirement for up to 10 years, there is no stopping the trend in which experienced, knowledgeable professionals leave the workforce in greater numbers than inexperienced ones will join.

• There are also projections that suggest future workforce composition may not be well aligned with business needs. McKinsey suggests that the professionals colleges do produce may be ill matched to the types of jobs available.
• The Lloyd’s Risk Index report notes that China “has a large population of young and old people, but a deficit of working-age professional workers,” and that the search for talent is “much more acute in the Asia-Pacific region” with 70% of business executives rating talent as high or very high among their priorities compared to 42% and 45% in Europe and North America, respectively.

The situation gets even trickier for CPOs on account of additional reasons like;

• The procurement function is gaining in importance and complexity
• Capabilities needed for the new, more strategic procurement regimes are not yet well defined
• There are still only relatively small pockets of excellence when it comes to secondary and higher education devoted to preparing people for careers in procurement and supply management
• There is also plenty of research to suggest that different generation of workers —Baby Boom, Gen X, Gen Y and now Gen M (mobile) — have vastly different work motivators and ideas around things like the role of technology, work-life balance, job security, loyalty and engagement.

In the coming two blog posts we will explore how the procurement talent crisis can be tackled. So stay tuned.