The critical question of where to find and how to effectively manage talent tops the priorities of 1,201 business leaders from more than 69 countries, who were surveyed as part of PricewaterhouseCoopers’ annual global CEO survey. PricewaterhouseCoopers (PwC) is No. 1 on The 2012 DiversityInc Top 50 Companies for Diversity list.
The survey report finds that strategies for managing talent are the No. 1 concern for the CEOs over the next year, followed by approach to managing risk, investment decisions and organizational structure following mergers and acquisitions. In recent years, with the global recession, profit and investment were top priorities, but that is changing.
“This really is the biggest business concern around the world … growth is going to be very uneven and there is concern about the diversity of different pools,” says Ed Boswell, who leads PwC’s U.S. Advisory and People Change practice and is a principal in the firm. He notes that as CEOs try to expand their organizations’ global footprints, they—and their teams—are required to examine aspects of business from a different perspective. While growth is occurring rapidly in countries such as China and India, it is much slower in more developed Western countries, including the United States.
Two-thirds of global CEOs believe there is a limited supply of candidates with the right skills, and 44 percent say creativity in the workplace is a major detriment to their business goals. The key to remedying these gaps is tapping underutilized pools of talent, the survey found. And globally, according to the survey, the demographics with the most widespread opportunity are based on gender and age.
That corresponds with research from DiversityInc’s first global survey of 12 countries, which found gender—and to a lesser extent, age—to be the only universal talent pools companies were focusing on globally. DiversityInc’s second global survey will be completed this fall, and it surveys 17 countries, primarily in Europe and Asia.
The PwC report notes that in almost all markets, women represent substantially less of the workforce than men. In South Korea, where only 60 percent of female college graduates ages 25–64 are working, foreign multinationals got ahead “by aggressively hiring an excluded group, women, in the local managerial labor market,” according to research from the Harvard Business School. The report finds that there remains a major gender gap in most countries. Yet only 11 percent of CEOs globally are planning “significant change” to policies to attract and retain more of their female employees.
Older workers are another underutilized pool of talent. In many countries, populations are aging and baby boomers are becoming eligible for retirement. In the United States, for example, the report notes that more than 1 in 10 employees are currently eligible for retirement. More than half of North American CEOs foresee challenges as older workers retire, the research found. Even though many valuable workers nearing the traditional retirement age say they want to carry on working, only 10 percent of CEOs are planning significant changes to hold on to older workers. Similarly, 54 percent of the CEOs foresee challenges in recruiting and retaining younger employees. However, outside of Latin America, only a minority of businesses are changing the way they pay younger employees to improve recruitment, the report found.
These three pools of talent—women, older workers and younger workers—are particularly vital in thinner talent markets where skills are scarcer, but they require specific strategies to approach, PwC noted in the report. As India-based HCL Technologies Vice Chairman and CEO Vineet Nayar says in the report, “With Generation Y coming into the business, hierarchies have to disappear. Generation Y expects to work in communities of mutual interest and passion—not structured hierarchies. Consequently, people-management strategies will have to change so that they look more like Facebook and less like the pyramid structures that we are used to.”
The highest priority on the shared agenda relates to the workforce. Over the next three years, 42 percent of CEOs expect to significantly increase their role in fostering a skilled workforce.
The biggest challenge for the CEOs is getting the message down through the management ranks, Boswell says. This challenge is especially true globally. “So often, companies export talent from the U.S. and western Europe. The unintended message is that the local talent isn’t up for the challenge or that leadership role. We need to say to the emerging markets that we see you as the leaders of tomorrow,” he says.
Billy Owens, global and U.S. leader of PwC’s International Assignment Services, agrees. He notes that one of the encouraging items from this survey is the increasing desire of younger workers for international assignments. “In the past, mobility was defined as ‘You’re from this location and you do this.’ Now it’s getting blurred with project teams working across borders. The mix of talent crossing borders is changing rapidly, and I don’t see it going back.”