This month’s cover story in the Harvard Business Review is titled “The Future and How to Survive It”. It’s a deep dive into the last 30 years or so of worldwide economic history and how the era of almost unrestricted Western multinational growth is coming to an end.
There are many factors to which the article alludes, but the bottom line is this: the emerging markets are disrupting almost all aspects of Western business. To compete, businesses will have to adopt new strategies.
Fighting Over Talent
Chief among the strategies advocated for in the article is being aggressive about acquiring talent.
The deck is stacked for talent scarcity. In developed countries, one third of the workforce could retire in the next decade. Meanwhile, the workers from developing countries that normally would be targets are no longer as interested in joining big Western businesses. They now have huge companies to work for at home, in places like China, India, and Korea.
In a recent survey of 1,500 global executives by McKinsey, less than a third said their company’s leaders have significant experience working abroad. Yet, two thirds said that sort of experience would be critical within the next five years. That’s a big gap.
The Role of the HR Department
“The Future and How to Survive It” also mentions how neglected Human Resources departments at most large companies have been. They will be increasingly important in the war for talent. Hiring from without will become more and more costly. Developing talent from within is how these companies need to move forward.
The good news is that the job of the HR department has become easier in the past few decades. Digital tools have made it easier to attract and retain talent from all over the world. Skills can be developed online that were once only possible through in-person training.
As more than half of the world’s economy—in terms of revenue and profits—moves toward these emerging markets, it is important to prepare your business to compete internationally. That requires a bank of skills that employees may not yet have, including language skills and cultural competency.