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Deloitte: Europe Will Have to Face a Lack of Talents; Firms Must Change Their Approach

European firms will soon face a significant decrease in the number of talented employees. According to a recent study by Deloitte, a Big Four consulting firm, this decrease is predominantly attributable to an ageing population, a shrinking labour force and changes in employee expectations. To prevent the loss of talents, firms will have to make a considerable change to their management strategy.

Based on Deloitte’s analysis of interviews with about 60 organisations having almost 2 million employees, the number of talents over the next 40 years will shrink by 13 percent.

“Starting in 2008, the number of open positions will be greater than the number of candidates; thus the demand for suitable employees will exceed supply. Talent management will have to expand and shift its focus to more employee roles and segments rather than high-performance individuals in leading positions,” says Petr Kymlička, Partner in Charge of the Consulting function of Deloitte Czech Republic.
 
The study, which included 11 Central European companies, showed that Czech firms are planning rather formal development programmes for their talents. The objective of talent management usually involves succession planning.

“Talent management is mostly directed at key employees, successors and graduates for whom specific development programmes are established,” says Mr Kymlička. “We see significant opportunities not only in a clear definition of individual talent groups, but also in the programmes applied after the talents have been identified. Our principal recommendation to companies is to make use of employee rotation within the company, establish diversified teams, organise international secondments, and support networking and other programmes which facilitate the talents’ greater identification with the company.”

As in many other EU countries, Czech politicians and economists are beginning to be concerned about the main cause of the labour force shrinkage – an ageing population – which is predominantly related to the Czech Republic’s decreasing birth rate. According to Eurostat estimates, the Czech Republic’s population will decrease from the current 10.4 million to less than 9 million by 2051. Over the next 40 years the current 1:4 ratio of retirees to working age people will drop by 50 percent. A similar trend is expected in Slovakia – by 2051, the current population of 5.3 million will decrease to 4.6 million. Some EU countries such as France, Ireland, or Sweden rely on an increased number of immigrants to help compensate for the employee deficit; however, immigrants predominantly represent low-educated inexpensive workforce.

www.deloitte.cz