The term “war for talent” comes from the title of the book written by Mckinsey’s Steven Hankin in 2001. With various turns in the economy, one has seen cyclic phases of war for talent and war for jobs
However, this time around the entire cycle got shrunk. Covid 19 crisis and subsequent lockdown in March 2020 brought the economy to a grinding halt. Hiring was frozen, salaries were cut and, in many cases, employees were laid off in large numbers. In a short period of just 18 months from this disruption, we are on the other end of the spectrum struggling to hire and retain talent. Here are a few reasons:
Digitization
Covid 19 crisis created a sense of urgency to adopt digitization across industries. It became a matter of survival to reexamine the operating models in terms of how to engage with customers, delivery mechanisms, supply chain, and workforce management.
This created a huge demand for tech and related skills. Further, with the increase in the number of start-ups that have raised funds and unicorns that came into being, the internet-based industry has become a formidable player in the war for talent. With the focus on growth and speed of execution, they are redefining the compensation packages and employee benefits.
Lastly, in India resource crunch for tech was even more severe with the domestic companies and offshore centers of international companies chasing the same talent pool.
Pent Up Demand
As the economy began to recover, businesses operating with a minimal workforce during the lockdown period commenced hiring to reach the pre-pandemic levels of headcount and started filling positions that were frozen for around 18 months.
There was a sudden rush to hire for the existing positions plus the positions that got created due to growth in certain sectors. The hiring that would have normally spread over a few years to support regular growth got concentrated over a smaller period when the markets opened.
The Great Attrition
Post pandemic, employees across the industry and geography are leaving their jobs at a record rate. Many are doing so without a job in hand. The reasons are varied. Some are exhausted with the increase in workload and erratic working hours while working from home.
There is a stronger desire to strike a work-life balance amongst this group. Others have a growing desire to search for a sense of purpose and a feeling of being connected with what they do. There is a greater emphasis on quality of work. Also, remote working has made employees less connected with their managers and organization.
The relationship has become transactional in many cases and there is not too much of an emotional barrier to overcome before putting in papers. Contradictory as it may sound, despite the disadvantages and fatigue set in with working from home, employees are resisting coming back to work on a regular basis and are switching to jobs that offer more flexibility in when and where they work.
Borderless Hiring
One learning out of the lockdown has been that remote working is clearly an option. In certain roles, it doesn’t matter where one works from.
This along with the current talent crunch has made employers look beyond their current geographies. Tech companies based out of Bangalore and NCR are hiring employees not only from Pune and Chennai but also from cities like Jharkhand and Chattisgarh and allowing them to work remotely.
Employee immobility is no longer a handicap. Talent from smaller towns is integrating with the wider job market. Companies that thrived on the low-cost base model with development centers in small cities are seeing their employees have multiple offers of working remotely and at a much higher compensation.
Scarcity of Good Talent
As per a recent survey by the Manpower group, 69% of the employers globally reported difficulty in hiring, a 15-year high. The number is even higher for India despite a higher population and younger demographic. The reason is the lack of required skills.
Our education system is completely out of sync with the industry requirement. According to the India Skill report 2022 by Wheelbox, only 48.7% of the total youth in India is employable. Also, it is well established that the top talent is 4 to 8 times more productive than the average ones. This intensifies the effort to hire from a very small pool.
Organizations have to re-think their workforce acquisition and retention strategies. They have to shed their old beliefs, reinvent their employee value proposition and bring it alive with highly engaged leadership across levels.
