In their recent book entitled Mass Career Customization, authors and Deloitte talent strategists Cathy Benko and Anne C. Weisberg argue that not everyone is on board in recognizing that there is a “structural workforce shift” at hand, that “the workplace must respond in kind” and that “now is the time and place to sustainably address this challenge.”

In science and engineering professions, overall global growth from 1995-2005 has been uneven, with: the number of researchers doubling in selected non-Organisation for Economic Co-operation and Development (OECD) economies, including China; slower growth in the U.S. (35 percent) and the European Union (29 percent); stagnation in Japan (5 percent); and faster-than-average growth in the other OECD member countries (60 percent), according to the National Science Board’s Science and Engineering Indicators 2008, released last week.

Governments of many mature industrial countries view demographic structures, stable or shrinking populations, expanding opportunities in other fields and declining interest in math and science among the young as a potential threat to the sustained competitiveness of their economies, the latest in the NSB’s Science Indicators series claims.

As such, business leaders are notably concerned.

A global McKinsey Quarterly survey in 2006, of 10,000+ respondents, indicated that the respondents regarded finding talented people as likely to be the single most important managerial preoccupation for the rest of this decade. A second global McKinsey survey, conducted last November, revealed that nearly half of the respondents expect intensifying competition for talent — and the increasingly global nature of that competition — to have a major effect on their companies over the next five years. (The 2007 survey, The Organizational Challenges of Global Trends: A McKinsey Global Survey, was completed by more than 1,300 executives.)

More than two-thirds (70 percent) of human resource managers in a winter 2006 survey sponsored by Monster.com stated that employee retention is a primary business concern, while 40 percent of the 600 HR managers surveyed reported having seen turnover within their organizations increase over the 12 months prior to the survey.

In terms of pure capital, studies have shown that employee turnover can cost companies up to 40 percent of their annual profit. A negative impact on the bottom line is damaging, but a churning employee population seriously degrades the corporate culture, creating even more dissatisfaction and turnover,” Workforce Management Online recently pointed out. And the impact turnover has on organizations continues to rise, with 40 percent of companies having reported direct costs of $5,000 to $20,000 to replace a single employee, according to a survey of 391 companies conducted in 2006 by employee retention consultancy TalentKeepers.

“Demographic trends, globalization, and the growth of knowledge work have intensified the external pressures on companies — but many of them compound the problem by failing to make talent management a strategic priority,” according to another recent report from McKinsey Quarterly.

Even when companies do make talent a priority, says McKinsey, “they often fall into another trap”: failing to address the needs of talent at all levels of the organization.

Sure, you can increase the likelihood of hanging on to top talent in various management positions with retention interviews: identifying the employees you really, really need to keep; sitting down with them and discussing the company, their personal satisfaction and ideas to make their job even better than it is.

Yet, as McKinsey's Making Talent a Strategic Priority report points out:

Unsung segments — front-line staff, technical specialists, even the indirect workforce, such as people who work for suppliers, contractors, and joint-venture partners — are often as critical to overall success as A players. Experience suggests that an exclusive focus on top players can damage the morale of the rest of the organization and, as a result, overall performance.

Therefore, “a more inclusive approach involves thinking of the workforce as a collection of talent segments that actively create or apply knowledge.”

According to McKinsey, there are seven obstacles to good talent management:

• Senior managers don’t spend enough high-quality time on talent management;
• Organization is “siloed” and does not encourage constructive collaboration and resource-sharing;
• Line managers are not sufficiently committed to development of people’s capabilities and careers;
• Line managers are unwilling to differentiate their people as top-, average- and under-performers;
• Senior leaders are not sufficiently involved in shaping talent-management strategy;
• Senior leaders do not align talent-management strategy with business strategy; and
• Line managers do not address under-performance effectively, even when chronic.

“There’s no magic formula for curing churn,” Workforce Management recently noted. “What it does take is strong core values, open communication, a sense of community that’s continually nurtured, and constant vigilance.”

Constant vigilance, in this case, should mean frequently defining and communicating a powerful employee value proposition — or, an explanation of why a smart, energetic and ambitious person might want to work for one company rather than another.

Earlier: Attain, Retain and Manage Top Talent

Resources

Mass Career Customization Aligning the Workplace with Today's Nontraditional Workforce
by Cathy Benko and Anne C. Weisberg

Making Talent a Strategic Priority
by Matthew Guthridge, Asmus B. Komm and Emily Lawson
The McKinsey Quarterly, January 2008

Science and Engineering Indicators 2008
National Science Board, Jan. 15, 2008

The Organizational Challenges of Global Trends: A McKinsey Global Survey
The McKinsey Quarterly, December 2007

Retention Strategies for 2006 and Beyond
Monster.com, winter 2006

Finding and Keeping the Best: 3 Ways to Ensure That Employees Stay
by Mark Hewitt, Allyis Inc.
Workforce Management, January 2007

The New Metrics of Corporate Performance: Profit Per Employee
by Bryan L. Lowell
The McKinsey Quarterly, February 2007