AIB 2014 Annual Meeting: The war for talentJun 25, 2014
Attracting and retaining talent has forever been an issue for organizations, yet new research suggests the competition to attract talent will reach unprecedented levels in the near future. Indeed, a 2012 study by global consulting firm McKinsey, found that that one of the biggest employment trends in coming decades will be a shortage of high-skill, college-educated workers for all advanced economies.
Mila Lazarova, associate professor, international business at the Beedie School of Business, chaired a fascinating session on this subject on the third day of the Academy of International Business (AIB) 2014 Annual Meeting.
The discussion was part of the Scholars Meet Practice track sessions at the event, and featured a panel of experts from both industry and academia sharing knowledge and research on the topic of how to attract and retain talent in the global business market today.
The panel consisted of academics Pawan Budhwar, Aston University, Paula Caligiuri, Northeastern University, and Rosalie Tung, Beedie School of Business and incoming President-Elect of the AIB. Meanwhile, the practitioners’ perspective was represented by Jeff Zhu, of Chinese multinational software engineering provider Neusoft.
As a rapidly expanding organization, Neusoft has utilized some innovative recruitment strategies over the last 15 years, Zhu explained. When he joined the organization in 2005 it employed 6,000 people, but by 2011 this had increased to over 21,000.
“The challenge is that the world is looking at us,” said Zhu. “Globalization brings massive amounts of opportunity to the Chinese IT market, but also creates intensive demand for IT talents.”
Neusoft boasts an annual attrition rate of only four per cent in their workforce – less than half of the national average in China. In order to retain their employees, and to attract the right kind of new talent, Neusoft employs some unusual techniques, Zhu revealed.
The company has owned its own private university in China for nearly fifteen years now, from which it employs between 1,000-2,000 graduates each year; approximately 20-30 percent of the graduating class. It then puts these fresh graduates through intensive training programs after they begin employment, with innovative management structures in place to ensure that employees remain engaged, and that the best talent is recognized and rewarded.
Although Neusoft is not as competitive with its compensation package as its competitors, it prides itself on its employee engagement initiatives, which include recreational facilities on campus and a wide range of staff clubs and initiatives. Zhu believes that these, in addition to the training and close personal attention from management – who are referred to as “teachers” rather than managers –are the reasons that employees rate the organization so highly in employee satisfaction.
The revelations about Neusoft’s employment strategy clearly stimulated the audience, resulting in numerous questions, including whether purchasing a university was a strategic move and how expensive it was to run – to which Zhu replied that the university is a foundation for the business, and although it is not core business, it does turn a marginal profit, accounting for approximately two percent of Neusoft’s revenue.
Budwar followed with a reflection of the war for talent in India. He explained that the extremely complex business context in the country – its very diverse nature, and the lack of one distinct Indian culture – provides unique challenges for foreign organizations entering the country.
As well, there are unique challenges for employers – the country has a very young population, and although it has many graduates, almost 80 percent of them are unemployable after finishing university, and require further training to bring them up to a level where they can contribute.
He noted that many companies are pursuing new initiatives to improve their recruitment in the country, and that there is great potential for research to be conducted on the subject, but that at present there was little research underway.
Finally, Caligiuri presented the findings of her research on the war for talent in the BRIC (Brazil, Russia, India and China) countries. The study, conducted in participation with Ernst and Young, revealed that a talent shortage was a leading risk for organizations in the BRIC countries – with one third of CEOs of organizations having to cancel planned initiatives due to lack of talent.
The study, which surveyed 1109 skilled professionals whose talents were in demand in the four nations, revealed that these employees viewed their careers as very important to them – but that they cared far less about which organizations their careers took them to.
“Across all four countries, we found that an organization’s reputation was the main driver for skilled employees when choosing where to work,” said Caligiuri. “But when it came to job satisfaction, organizational reputation was the least important factor – meaning that an organization’s reputation has little effect on an employee’s job satisfaction.”
For more information on the AIB 2014 Annual Meeting, visit https://beedie.sfu.ca/AIB2014/index.php