There is a growing recognition in the 21st century of the changing nature of the employment relationship. Advanced western economies' production base has evolved from manufacturing to knowledge and services and this has contributed to a shift in the nature of work. Coupled with declining birth rates in most OECD countries over the past 20 years, a growing labour and skill shortage is becoming apparent.
As skilled talent becomes scarce, quality staff is vital to a business's competitive advantage. Thus the policies, practices and systems developed by human resource (HR) professionals to attract and retain these employees assume a central and dynamic role.
In this new world of work, if organisations are to remain competitive, the management of people will be fundamentally different to the latter half of the 20th century.
The war for talent
With the first wave of baby-boomers reaching retirement more people will be leaving the workforce than actually joining it. A global study by the Boston Consulting Group (BCG) in 2003 estimated a shortfall in skilled labour worldwide of around 60 million by 2020; 17 million in the US; 9 million in Japan; 10 million in China; 6 million in Russia; 3 million in Germany; 3 million in France; 3 million in Spain; 2 million in the UK and 500,000 in Australia.
In 1998 research by McKinsey & Co (The War for Talent) revealed that talent would become more difficult to find and costly to battle for, employees would look for employability not employment and they would want to change jobs often.
New workplace - new perspectives
In the new global labour market, those with high demand skills in tight labour markets have been big winners where they have been able to provide organisations with competitive advantage.
These workers, known as ‘gold-collar workers' because of their status in the labour market (and increasingly from the Generation X and Y age categories), are seen as having a high level of specialist skills and can apply these skills to issues and problems critical to organisational competitive advantage.
The key difference with these workers in the new economy is that they own the means of production - knowledge - and with these specialist skills attract large rewards.
Research by the Australian Centre for Industrial Relations Research and Training (ACIRRT) notes the changing labour market has also transformed the nature of their psychological contract and subsequently significantly realigned the employer-employee relationship.
The research states: "Sometimes known as ‘gold-collar workers' this latter group of workers has benefited considerably from technological change and economic deregulation. Often found in the cutting edge of computer technology, in banking or publishing, ‘gold-collar workers' have found high paying jobs which stimulate and challenge them.
They often spend extremely long hours at their job, they are young, ambitious and very well paid. Their loyalty, however, is owed less to their employer than to their career. As a result, they are highly mobile, lured by new jobs which offer technical challenges or opportunities for self-development."
The term ‘gold-collar worker' implies that these workers need to be managed carefully and provided with excellent working conditions. If it is not possible to develop competitive advantage without consideration of the people that form the core of a firm's knowledge base then the management of human resources throws out particular challenges to organisations that base their advantage on these ‘free thinking' resources.
The key to developing human resource strategies that attract, develop and retain these vital employees is to understand what motivates them. These workers think differently, behave differently and need differently to ‘traditional' employees.
They are self-focused and less interested in conventional employment benefits such as job security and conditions. The core issue for organisations to identify is ‘employability'. These employees expect an organisation to not only secure their employment but upgrade their knowledge, skills and ability, so they remain in demand in the wider market.
While the concept of job-hopping may become the norm, encouraging this approach or characteristics of employment paradoxically may be a factor in at least reducing turnover and even making the organisation an ‘employers of choice' to return to or recommend to other highly skilled workers.
‘Gold-collar workers' will manage their own careers, constantly upgrading skills by seeking out ‘employers of choice' who will provide this opportunity. Employers need to be aware that this ‘new' breed of worker will direct their own training and development needs for a broader range of skills, and accept greater role ambiguity and responsibility to broaden their level of employability.
In effect, the new core workforce will be a contingent workforce, looking to the organisation to provide the relevant skill and rewards over this fixed period to allow them to develop their skills and then move on.
What will be needed is a new approach to the management of human resources. But are Australian organisations developing policies and practices to attract, develop and retain human resource talent?
To answer this question, a study invited members of the Australian Human Resource Institute (AHRI) responsible for HRM/personnel or employee relations (working either ‘in house' or as a consultant) to complete an online survey. Of the 12,437 invited, 1,372 submitted a completed document - 11 per cent - and provide a substantial sample size for statistical analysis across age, gender and industry background.
The study grouped aspects of work policies, practices and systems into two broad categories of attraction and retention.
In terms of attraction, recruitment and selection were considered to be the key initial interface between the individual and the organisation. Values and ethics also acted as important sources of attraction as employees become increasingly discerning about who they work for. They use blogs and websites to find out about the real organisational culture.
In Australia, a commerce student might think a specific bank prestigious to work for, but they are more likely to also consider the ‘lifestyle cost' of working in what may be a ‘factory'. The survey showed the highest response for new policies, programs and/or systems in the last five years was in attracting the interest of a potential employee - recruitment (76 per cent).
Survey results indicated quite low attention to the area of policy development associated with retention: job design, job analysis and team-building. Reasons for this may include resistance to change by employers.
Another key factor in the retention of skilled workers is the provision of training and development. This study indicated that, although organisations were attending to training and development, the levels of investment should be stronger. Low investment in these key areas may reflect the traditional approach of Australian industry to rely on immigration and poaching to solve skill shortages.
Alternatively, organisational resistance to heavy investment in career development may reflect employees' choice to manage their own career by moving between organisations. Employers may be therefore questioning the value in investing heavily in training and development opportunities for employees who may not stay.
New HR policy and practice developments in performance appraisal were reported for both managers and non-managers, which would suggest that organisations are increasingly seeing the importance of discussing and documenting employee progress and development at both a management and non-management level. However this may be more to do with performance monitoring than performance development.
The final activity connected with retention strategies was the issue of share ownership which is often offered to employers as an extrinsic retention rewards strategy.
Conclusion
There is a clear indication that the negotiating position of employees in the workplace is increasing for the first time in a generation and this is having an impact on the employment relationship and subsequently employment policies and practices.
While it appears this is being picked up by Australian organisations at the interface with the market in the areas of recruitment and selection, in key areas of job design, values and ethics, skill development, careers and diversity management the survey indicates a lower level of resource allocation.
The research show these are the areas discerning skilled (potential employees) are looking at in terms of whether the organisations is offering employment or employability, and therefore indicates that organisations may not be paying enough attention in terms of resource allocation to these areas.
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