Talent optimisation and skill acquisition will continue in the year to come. In order to expand and grow talent, companies will continue to make strategic decisions such as offshoring/nearshoring. As per the study by Careerbuilder, about 23 percent of US employers who will hire most workers in China and 22 percent will hire the most in India.
Having been close to the process, here are my thoughts on the subject:
Offshoring/Nearshoring could be critical decisions that the company would have to make, Keeping in mind it would be operating out of the market where business is held. Some of the critical factors that need to be evaluated for job migration decisions are:
a) Contribution factor: This translates into having clearly defined long and short terms objectives for talent zones outside the headquarters and their alignment with the business objectives. The second step of the same process is the effective communication of these objectives at all virtual work areas.
b) Skill factor: Key ingredient of the strategy is right assessment of skills, education and training available in the market. Companies are moving from cost criteria to offshored product development (OPD) - a growing phenomena where independent software vendors ship out product engineering work. Global teams are moving up the value chain and are today an integral part of mission critical product decisions.
In operating market of fast changing dynamics: Supply/Demand can vary significantly. Assessment of the talent region is a key determinant for progress of the business. for eg. : India's pool of young university graduates (those with seven years and less work experience was estimated at 14 million according to Mckinsey Global institute) and at the same time analysing shortage in skills areas will enable business to re-direct to other global talent pools. Another report by Manpower indicates that in acute talent shortage supply markets (Peru -46% , Mexico -41%, Japan -45%), these conditions result in wage inflation.
c) Localisation factor: This factor encompasses infrastructural, economic policies and GDP growth of the chosen operating market. Looking into the example of Eastern Europe, the new EU member states continue to enjoy robust economic growth of an average of 6% , as EU membership brings influx of EU infrastructure building funds, and inward investment as western industry continues to relocate eastward. Countries such as Czech republic, Poland and the Baltic states should continue to do well, with growth expectations of 6%.(News: Goldseek).
d) Risk factor: As with any business, more so with growing economies, companies need to be vigilant of volatile transitory talent movements. One of the recent reports of Hewitt Asia Pacific 2006, illustrates that the banking and finance sector saw the greatest employee turnover at 25%, which is likely brought on by stable economies, growing markets and increased retail investor confidence. At 23%, attrition was also high in the outsourcing industry, which has experienced unprecedented levels of growth in recent years. The lowest turnover was recorded in the manufacturing sector at 11%. (Hewitt 2006 Asia Pacific data),
Example of such quick turnover rate is the recent exit of 6 top executives at Dell in Asia Pacific moving to Lenovo group ( China daily report).
With ever changing market conditions, organisations need to keep themselves abreast of local conditions and continue to explore creative measures in acquiring human capital to their balance sheets.
