Panos Manolopoulos

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					                    The War for Talent
                        The Romanian case




                                    Panos Manolopoulos, PhD
                                        Managing Partner,
                                  Stanton Chase Int’l Middle East
                                  Global Practice Leader in CPS

March, 26th, 2008
BEFORE
AFTER
“The empires of the future
        will be
  empires of the Mind”

                Winston Churchill, 1943
 Talent has become more important
     than capital, strategy or R&D

“At the end of the day we bet on people
             not strategies”

                       Larry Bossidy, CEO AlliedSignal
     > What & Where is Talent
             • What is talent?
             “The brainpower”
             “The knowledge workers” (P. Drucker)
             • Where is talent?*
             Senior leadership
             Mid-level employees with leadership potential
             Key contributors or technical experts
             Entry-level employees with leadership potential


                               15% of total workforce
*Source: Towers Perry Survey
    > Global Retained Executive Search
    Revenues 1978-2006                       12
             Total Revenue $ (in billions)




                                             10



                                             8



                                             6



                                             4



                                             2



                                             0
                                                89

                                                90




                                                  4




                                                  6
                                                83




                                                   1
                                                98
                                                 95




                                                  2
                                                  0




                                                  3
                                                94




                                                96




                                                99




                                                  5
                                                 97
                                                92

                                                93




                                                  7
                                                78




                                                 0

                                                0

                                                0

                                                0

                                                0

                                                0

                                                0
                                                0
                                             20
                                              19




                                              19
                                             19

                                             19

                                             19

                                             19

                                             19

                                             19

                                             19




                                             19




                                             19

                                             19




                                             20

                                             20

                                             20

                                             20

                                             20

                                             20
                                             20




Source: Association of Executive Search
Consultants (AESC)
> Average Growth (revenues)
Worldwide 2003 – 2006




            65%
     Stanton Chase International

  61 offices in 41 countries




Global Reach-Local Knowledge
                                         Growth of Chase International
                                         Countries

       2006                                    41


       2000                   19


       1995           5


       1990       3


              0           5   10    15         20      25        30    35        40        45

                                                                        Offices

                                    2006                                    61


                                    2000                    34
   Office
of the year                         1995           7

2006 & 2007
                                    1990       4


                                           0           10         20        30        40        50   60   70




                                   Romania
     > Market Breakdown by Region

45
      North
40
      America                       43%
35
     Europe
30                                  34%
25


20


15
     Asia/Pacific
                                    15%
10


 5
     South America                  8%

              2004   2005       2006
> Highest Growth Sectors (2007–2008)

 Banking & Financial Services (65.2%)

 Information Technology (29.4%)

 Professional Services (27.3%)
> The Drivers for The War of Talent

  Strong Economic Growth
  Globalization/ Emerging Markets
  Changing Demographics
  Changing Talent Market
  Changing Executive Profile
> Healthy Economy
2007 Growth: 2.5% (US), 2.8% (EU), 2.6% (Euro zone)
High M&A
Rise & impact of private equity firms
Low inflation
Low interest rates /easy borrowing
Lower unemployment

Corporate profits slowing, credit squeeze, recession.
Strong impact from the emerging Regions
> Globalization & Emerging Markets
                        Remarks on the Romanian case
   Flow of human capital, a reverse stream

   Band A Developed Countries        Band C Developing Countries

   Focus on HR capital – Social capital

   Managers have excellent educational background

   Excellent language skills

   Social competence, strong regional network

   Most important: Ambition – „hungry to be successful“
                                                           University graduates in
• high performances in                                   Romania (by education field)
international competitions

• high percentage of technically
                                                                          Arts
competent professionals                                                    Arts
                                                                          2%               Engineering
                                                                                     Engineering
                                                                                               23%
                                                   Education Education      2%          23%
• highest growth rate of IT                          31%       31%


specialists in the region
                                                                                                         Medicine
                                                                                                         5%
• strong language skills: English,
                                                                                                  Medicine
                                                           Law                                      5%
                                                            Law
French, German, Italian, Spanish,                          9%
                                                            9%
                                                                         Economy
                                                                           30%
Russian, etc.                                                                      Economy
                                                                                    30%
• large skilled labor force at
comparatively low wage rates
                                                                  Total number of University graduates
                                                                          in 2004/2005: 108475



*source: National Institute of Statistics (ARIS)
                  Remarks on the Romanian case



• New generation of First Liners. Quality turn.

•   International Exposure.


•   Heavy flow of repatriation
> Globalization & Emerging Markets
The Economist survey of 1,000 + global executives:
   – Glory days of global capitalism - global economy
     highest growth since 1970s
   – 9 out of 10 execs see next 3 years as very good
   – Chinese output x4 since early 1970s
   – China, India & the Gulf more common destination
     than leading developed countries!
Rebalance of economic/political power
Globalization of R&D
> Changing Demographics                               14%      12%
    World Population up to 2050 (UN)*

  Year        World       Africa   Asia   Americas   Europe   Oceania

  2000        6086         812     3676     838        729      31

  2010        6843        1007     4130     945        726      35

  2020        7578        1228     4554    1041        715      39
                                                     13%      7%
  2030        8199        1463     4872    1122        698      42

  2040        8701        1705     5092    1182        677      45

  2050        9076        1937     5217    1221        653      48
*UN figures in millions
  > Changing Demographics
      Domestic talent supply is declining in the developed world
      In Europe:
      By 2010
            – 55% of the population will be over 40 yrs
            – 30% decrease in 40 yrs+ workers
      By 2025
            – the number of people aged 15-64 is projected to fall by 7%

      By 2020 the gap between skilled jobs and available
      skilled workers expected to reach 14 mil worldwide*

* Source: DBM global research
> Changing Talent Market :
Intensified migration shifts
Talented individuals will emigrate to best offering
countries/regions
• China/India taking back talent
• US/ Europe: antiquated immigration system – not
  focused on talent acquisition
• Relocation of labor intensive operations
• Pressure on competitive compensation packages
      > The Location of Talent*
     Where is the reservoir of Talent?
    • USA remains the world’s leading
      country for nurturing talent
    • Increased competition from the UK
      coming to 2nd place
    • China is developing a much better
      environment for producing talent
    • China & India run among the top 10
      talent hotspots worldwide
  Talent follows were the money leads
* Source: Global Talent Index (GTI)
                                    >Talent Market Trends
Aging of Baby Boom generation with much lower number of generation X & Y’s
   entering the market

                  How well does each of the following leadership areas of your
                  organization understand the business implication of the talent
                  shortage?




                  Human resources have been tuned in to the talent shortage
                  problem for many years now, and CEOs and executive
                  committees are also very aware because the current health
                  and future growth of the organization rests with them.
                  Business unit leaders, however, are more tactical and not
                  necessarily focused on the “big picture.”
                                             Talent Market Trends

Number of respondents who understand the shortage   Do you believe there is a “gap” between baby boomers and
                                                    younger generations when it comes to qualified leadership talent?
 >Talent Market Trends
• Shortage of skill and experience among the
  much younger Millennial generation

• Mature workers’ relevance in today’s
  workplace is challenged

• Inter-generational and inter-racial workforce
  with different values, motives and attitudes-
  COMPLEXITY!

• Declining number of men in workplace and
  more women entering the market
> Talent Market Trends

 • Regulation and shareholder pressures shorten
   tenures of top executives (15% of CEOs left office
   in 2005 – 70% higher than 10 years ago)
 • Shorter job tenure (2-4 years). The average
   turnover rate within Europe and ME is 16%
 • Alternative work patterns (contract working, virtual
   working)
 • Executive mobility – 130 million live & work outside
   their home country and this is growing by 4 million
   per year
    > Changing Executive Profile*
       • More mobile –more multicultural
       • More demanding on competitive
         compensation packages
       • Virtual working ability
       • 87% of execs put a premium on work-life
         balance
       • With fading loyalty to employers
            – 75% execs looking actively or passively



*Source: AESC
      > Global War for Talent
        Not just among companies but among countries
        For 75% of HR Executives, attracting and
        retaining talent is a No.1 priority
        40% of employers worldwide having difficulty
        finding talent
        Number of open positions to double by 2030



*Source: AESC
       > Corporate Challenges= Opportunities
Rethink our hiring and retention strategies
                 Does your organization view the retention
                 of productive employees as a challenge?




       Just 23 percent of all respondents report that their organizations
       have a talent retention plan in place or planned for the next five
       years. While 29 percent have one planned but not currently in
       place, almost half (48 percent) do not have one in place or planned.
> Corporate Challenges= Opportunities


   Align talent management strategies with
   business strategies

   Develop leaders with the ability to inspire
   inter-generational, virtual and diverse work-force

   Offer more coaching, mentoring, further
   education and skills enrichment opportunities
> Corporate Challenges= Opportunities
    Develop creative lifestyle enhancing programs for
    our work force
    Break internal silos: moving talent around, hiring
    talent from other industries, embracing diversity
    Promote a “performance and learning culture” that
    gives younger workers a reason to stay
    Adopt a flexible outlook to developing employees
    work contracts, incentives and career development
    plans
      > What makes the Worlds 100 Best
      Places to work the best?*
                 Inspired Leadership

                 Strong Employee Value Proposition

                 Focus on developing People

                 Strong Sense of Accountability

                 Aligned HR Practices with excellent execution
*Source: 100 Best Employers
Hewitt Survey 2005
THANK YOU ROMANIA!

				
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