Archive for skills shortages

Employers of choice?

These days, many companies call themselves “employers of choice”. 

However, the Australian Human Resources Institute survey: Employer of Choice: A Reality Cheque, found a deep-cynicism about the EOC label that many companies attach to themselves. Over 52 per cent of respondents said they rarely or never took notice of a company’s claims to be an EOC, and 24 per cent had worked for an EOC company that hadn’t lived up to its promises. A further 15 per cent had been penalised for trying to access touted EOC benefits, while 26 per cent claimed to know of co-workers who had experienced similar treatment.

Being able to express what your company stands for is an important part of attracting top performers. The psychological bond is as much emotional as it is rational.  The real race for the White House is between Barack Obama and Sarah Palin. Like them or loathe them at least you know what they stand for. Like Tony Blair before him, Barack Obama has built his core message around change.  While Sarah Palin’s core message is built around being a ‘hockey mum’, so that Middle America can instantly identify with her and her values.

People relate to a compelling vision, especially if you take the time to ask them about their values and ambitions and show how the two are aligned.  As employers, it is up to us to give our employees work meaning.  It is we who must create the psychological bond between employer and employee.

This psychological bond can be cultivated from the moment a candidate is selected for employment.  One of my clients aims to establish a connection between the candidate and the company at the final interview.  How?  He presents the candidate with a business card with their name on it.  It makes saying ‘no’ much more difficult when an employer is able to demonstrate so much commitment to a candidate and their future career.

Your compelling vision doesn’t need to be sugar coated to attract and retain employees.  Just ensure it is honest.  A few years back, while I was working for a large consulting firm, the global CEO was addressing an internal conference. He was asked by a female manager about promotion opportunities to partner level if she had children and took time out to be with them or asked to work part-time. He replied that he was “supportive of her making those decisions, however promotions would continue to go to those people who worked long hours and were focussed on the company’s success”.

Brutal?  Perhaps.  But it was also honest and demonstrated his core values. Everyone knew how it worked.  And they never had trouble attracting employees who wanted to work hard.

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3.3 million Australians looking to retire

3.3 million people looking to retire, reports the Australian Bureau of Statistics.

In a report released in November, the ABS says that of the 3.9 million people aged 45 or over who were employed when surveyed in 2007, 3.3 million said they intended to retire at some stage, and mostly over the next 20 years.

Shifting to part-time work some time before retirement was the transition plan for 1.1 million people aged 45 years and over who were currently in full time employment.

The Survey of Employment Arrangements, Retirement and Superannuation provides a picture of the plans that people aged 45 years and over have for retirement; people already retired; the superannuation coverage, contributions and balances of the population; and detailed information about the type of work that people do, their working patterns and preferences, and how they balance work with their caring responsibilities.

Some more of the survey’s findings include:

  • 45% of employees (excluding owner managers of incorporated enterprises) usually work extra hours, but for nearly half of these employees (45%) the extra hours were worked on five or less days a month;
  • 65% of employed people were satisfied with the number of hours they worked, taking into consideration the effect any change would have on their pay; and
  • 15% of employees (excluding owner managers of incorporated enterprises) who provided care for someone used working arrangements to facilitate that care provision, with flexible working hours being the most common.

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Lagging behind on workforce participation

Strong productivity growth is essential to Australia’s future prosperity. In 2005 Australia ranked number 10 in the World Economic Forum’s Global Competitiveness Report.  This is a global indicator of a country’s potential to attract capital investment and deliver growth on a sustainable basis. In 2008, we are number 18.
In Australia, workforce participation is low. Total workforce participation in Australia is only 64.4 per cent – with the male participation rate at 72 per cent and the female participation rate at 57 per cent.

This workforce participation places Australia at number 11 of the 28 countries examined, way below our trading partners.

In fact, the OECD has suggested that the low participation of women in the Australian workforce should be addressed by the government cutting their entitlement to taxpayer-funded childcare if they remain stay at home mums. 

The Global Competitiveness Report also provides a list of problematic factors for doing business in Australia.  Look what came out number one:

Restrictive labor regulations……………………………….16.3
Inadequate supply of infrastructure …………………….15.7
Inadequately educated workforce………………………..12.9
Inflation ………………………………………………………….11.6
Tax rates …………………………………………………………10.1
Inefficient government bureaucracy………………………8.6
Tax regulations …………………………………………………7.7
Access to financing…………………………………………….6.5
Poor work ethic in national labor force ………………….4.6
Policy instability…………………………………………………4.1
Foreign currency regulations………………………………..1.3
Crime and theft ………………………………………………….0.5
Corruption………………………………………………………….0.2
Government instability/coups ………………………………0.0
Poor public health………………………………………………..0.0

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Faster, higher, stronger – Part 2

As the growth rates of emerging markets continue to accelerate and further expand beyond the current leaders – Brazil, Russia, India and China – the power of these regions in the global IT industry is becoming more pronounced.

Gartner estimates that IT spending in emerging markets will grow at a compound annual growth rate of 9.9 per cent to reach $1.3 trillion by 2011.  In comparison, mature markets will spend more overall ($2.5 trillion by 2011) but invest a smaller percentage (4.6 per cent).

And with the rapid rise in IT growth in emerging nations, analysts are predicting that the global ICT industry will be ‘borderless’ by 2015.  This means that organisations, including governments, will increasingly source their ICT from around the globe without regard to the ‘country of origin’ or ‘headquarters’ of the vendor supplying the solution, be it software, hardware, telecommunications, IT services, or people.

It’s fair to say that Australia will have more to worry about than simply how well our rowers and cyclists perform by the time London 2012 rolls around.

As organisations leverage low-cost, highly skilled labour sources, nations such as Australia will be at a significant competitive disadvantage unless we find a distinct value proposition. 

Functions which can be digitised or automated are most likely to be sent offshore, so building those skills which are valuable locally and less easy to replicate are crucial to underwrite Australia’s economic prosperity.

As the WEF report clearly demonstrates, those countries leading the world in ICT readiness have a coherent government vision of the importance of ICT, coupled with an early focus on education and innovation.

Australia possesses an abundantly-skilled, culturally and linguistically diverse workforce that excels in high value, creative problem-solving skills.  Our people have a reputation around the globe for their ability to develop integrated business solutions through applied ICT technology. 

But, just like the Aussie stars of the track and pool, our people need nurturing.  We have the capacity to develop world-beating ICT products and solutions – but we need support, investment and incentives to ensure we keep our place up the front of the pack.

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Faster, higher, stronger

As the Olympics circus packs up its tent for another four years, sports-mad Australians are left to contemplate a lighter medal haul than anticipated, alongside a sinking spot on the medal tally board.

While our less-than-impressive efforts at the velodrome and on the track have us shaking our heads, the British press are singing the praises of Old Blighty, pointing out that their athletes had shown “what can be achieved with dedication, good coaching and sensible funding”.

And there’s the rub.  Should we really be surprised when a massive financial investment in sport yields results?  And should we marvel when economic powerhouses such as China, with its huge population, and the US, with its combination of high Gross Domestic Product (GDP) and population, top the medal table? 

A high population provides a strong base from which to draw talent – whether it’s athletes or technologists.  GDP is a good indicator of a country’s prosperity, with affluent countries more likely to have the spare cash to invest in elite sports systems (or technology infrastructure, as the case may be).

But my question is this: will Australians ever experience the same sense of bruised national pride as we slip further down the global technology leader board?

There are dozens of ways to measure the competitiveness of a country’s ICT capacity, but the Global Information Technology Report, released by the World Economic Forum (WEF) in April is a good yardstick. 

The Report uses the Networked Readiness Index (NRI), covering a total of 127 economies in 2007-2008, to measure each nation’s degree of preparation to participate in and benefit from ICT developments.  The NRI assesses the economy’s ICT environment, readiness of key stakeholders and ICT usage.

And, according to WEF, Australia is nowhere near medal contention.

Top of the league this year was Denmark – which won only two gold at Beijing, but grabbed the WEF gold for the second year in a row.  Close behind was Sweden (despite just four silver medals and a bronze in Beijing), Switzerland (two gold medals), the United States (runner up at the Olympics, with 36 gold medals) and Singapore (just one silver medal). Australia came in at number 14.

So, what’s more important for our future success?  Is it golden moments in the pool or world-beating high technology performances?

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Capitalising on human potential

While we’ve all heard the doom and gloom about the dire state of our nation’s skills shortages, let’s look at what organisations can do to keep the employees they have and maximise their potential.

To start with, it’s time companies started paying more than lip service to the often-recited slogan: “People are our greatest assets.”

While this basic reality is well understood by most companies, a fundamental change in people management is essential for organisational growth. If we really believe that people are our company’s greatest assets we should measure the importance of them within our companies.

So how do we put systems, processes and reporting in place to get better focus on the development of human and knowledge capital within organisations?

We need to measure, value and manage our most important asset – our people. Start by analysing the results of customer satisfaction and employee opinion surveys. Ask your employees whether they feel they’re well led, whether they understand where their organisation is heading, if they feel part of that direction and whether they feel engaged in where their leaders are taking them.

Organisations have much to learn about their achievements and challenges by consulting with their employees and customers. And more importantly, measuring staff and customer satisfaction can predict the company’s success levels in the next 12 months.

The future of any organisation relies on its ability to harness its human potential, and all business leaders wanting to succeed must aim to extract 100 percent from each and every staff member. If you compare the way we manage cash and inventory you wouldn’t survive running an organisation wasting up to 60 percent of those assets. We shouldn’t allow ourselves to waste human assets.

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Widening the pool of workers

I’ve lived through the 1980s boom, early 90s bust, late nineties boom, early naughties bust and and the late naughties boom.

However, each bust time we shed staff and each boom time we wonder where the skilled people are and why young Australians, who saw their parents downsized, are not loyal to big corporations .  I think a philosopher once said that “doing the same thing and hoping for different results was the definition of insanity.”

Every CEO and manager I talk to is finding it difficult to attract sufficient numbers of the right skills, right here and right now.  And Australia has an ageing population and a low fertility rate, so four and a half times fewer young people are joining our workforce than did 30 years ago.

According to forecasts from the Australian Government, around 70 per cent of new employment to 2011–12 is expected to come from four industries. The largest contribution is projected to be from the Health and Community Services industry which is expected to add 170 000 jobs over the next five years, growing at 3.0% per year.

The other industries likely to add large numbers of new jobs are Property and Business Services (136 200), Retail Trade (128 200) and Construction (82 500). Personal and Other Services (43 400 new jobs) and Accommodation, Cafés and Restaurants (39 000) are also expected to contribute a large number of jobs.

At the same time, analysts are saying that workforce participation rates will decrease in all states and territories across Australia between now and 2012. In Tasmania and the Northern Territory the supply of labour is not expected to meet the demand due to an ageing population and low population growth. Participation rates will decrease by 3 per cent and 2 per cent in each state respectively.

We simply cannot continue to be precious about accessing labour pools and skills in other economies across the globe.

Functions which can be digitised or automated are most likely to be sent offshore so building those skills which are valuable locally and less easy to replicate are crucial in underwriting economic prosperity for Australia.

More than 100,000 students come to study in Australia from China and India and have to leave to apply for their work visa offshore. When Intel’s Andy Grove noticed the same phenomenon in the US in the late 1990s, he questioned why every foreign student wasn’t given a green card when they graduated.  This question is still relevant in Australia today.

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