Corporate Talent

Corporate Talent in the US Since 2000

One of the biggest problems in America today is talent shortage. The need for qualified workers is growing exponentially in almost every business sector. It has become increasingly important for companies to attain and keep skilled talent in order to secure their future in the marketplace. In addition, many companies are now becoming aware of potential future declines in their valued workforce.

As the baby boomer generation starts to retire, it will phase itself out within the next fifteen years. In fact "many firms are facing a severe hollowing out of expertise as [a result], with some having to replace more than half their staff over the next decade" (Wood 5). This will create a large demand for qualified executives and managers in the near future. "RHR International, (a consultancy) claims that America's 500 biggest companies will lose half their senior managers in the next five years or so" (Economist 2).

The recent advent of the Internet into mainstream society has immensely changed the task of locating and employing talent. Cheaper communication throughout the world has in a sense made the world a smaller place. No longer is the world immense, with seas in between. Today the world is flat; with people overseas just a click away. In effect, this situation is immensely changing the world of business as we once knew it. Instead of relying on local talent to fill necessary positions, the trend in outsourcing jobs to third world countries is gradually increasing. There are several different reasons for this phenomenon. Among the major ones being cost, diversity, and lack of local talent.

Survey of Major Industries

The current trend amongst major industries--namely technology and manufacturing--involves outsourcing and acquiring competitor talent. Outsourcing is a common solution amongst major companies like Microsoft, Hewlett-Packard, and Sysco Systems. For example, Hewlett-Packard's India development center was established to gain an edge on the talent war. Growing from 20 employees in 1998 to over 900 employees today. HP calculates that 60% of its growth in the next decade will come from developing countries compared with 20% over the past decade. In efforts to capture the local market, HP has already installed research facilities in India aimed at creating a basic affordable computer priced at $109. It seems that the only way to understand this new market, is to have talent that is already immersed in the local needs and limitations. In this scenario, an American mindset could not be adaptable or capable of relating to the lifestyles and needs of Indian consumers making outsourcing inevitable. (Economist 6).

Outsourcing is still a big issue in the United States today. Recently millions of Americans have lost their jobs to individuals in third world countries who are willing to work more hours for less pay. Just in the labor market alone over one million workers lost their jobs in 2001 (Tanner). In essence, the talent shortage might just be a big myth enabling corporations to acquire cheap labor from developing countries. The problem is not a labor shortage, but rather a shortage of cheap labor. A good example of this is found on farms in the United States filled with Mexican workers. There is an ample supply of Americans that are willing to work on farms. However none are willing to work for the low wages that Mexican immigrant workers are willing to receive. Another problem too is that American workers are often overqualified for their jobs--demanding higher salaries for their skills. In response, foreign workers abroad and in America have enabled companies to cut down on costs for comparable skills--increasing profitability. Another good example is the use of Indian telemarketers and telephone assistants. Vonage and many others are taking their business overseas because Indians have perfect English, making them prime candidates for qualified cheap labor. In the manufacturing sector too, product assembly is being outsourced. While goods such as cotton may be produced in the United States, third world labor is still more inexpensive.

In sum, exporting jobs overseas has devalued and reduced educated workers' incomes. If big companies can pay someone overseas less for a position that costs more at home, they are less willing to provide better pay and incentives to native workers on the home front.

What is HR

Modernity has created a highly technological and capitalist society where human capability is a scarce and valuable commodity. Among this scarce commodity of human capital you will find head hunters or human resource departments whose sole purpose is to pinpoint talent like a needle in a haystack. These departments are located in large companies and are called human resources departments, otherwise known as HR. In total, HR departments are involved in finding, interviewing, evaluating, and placing talent. They all use different types of procedures and methods in order to keep a well stocked Rolodex of golden gooses--in other words--an ample supply of talent.

Recently, human resource department are playing larger roles in companies, if not some of the most vital positions. Within the last decade, the directors of HR departments have become some of the highest paid employees of major companies. The search for talent has become more essential due to the scarcity of talent and its ability to increase profitability and revenues--(much like a golden goose lays golden eggs).

Human Resources departments use techniques and cutting edge technology to find candidates. With the availability of the internet, HR departments can more easily find qualified employees. Many actively use job placement websites like Monster and HotJobs in order to locate employees. Some HR firms even go so far as to recruit employees from competitors or companies who are laying employees off. And statistically, one in every three executives has been approached by their company's competition. (Economist 5)

Human resource departments have been coming up with new strategies in their quest for talent. Major companies' human resource departments go to industry Meccas to recruit talent. They also use job placement firms, which implement the Internet and extensive university and institute networks in order to find qualified new talent from all over the world.