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RECRUITMENT THE PRACTICE OF 2021

2011-2021MGI UK & Ireland Conference 20112nd December 2011

Presented by Karen Young, Hays Specialist Recruitment

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SHORTAGE OF THE RIGHT PEOPLE AND SKILLS IN THE RIGHT PARTS OF THE WORLD

FUNDAMENTAL FUTURE WORKFORCE CHALLENGE

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SETTING THE SCENE

• Global labour markets are set for an unprecedented upheaval in the next two decades

• Let the statistics tell the story – the world’s labour force will increase by more than a fifth by 2030 (more than a billion people) however all of that growth will occur in developing economies

• The workforce in most developed economies will plateau, decline and age

• Shift in economic power from the developed to the developing world as that new workforce is put to work and generates wealth

CREATING JOBS IN A GLOBAL ECONOMY

THE HAYS/OXFORD ECONOMICS GLOBAL REPORT

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BACKGROUND

• At Hays we wanted to understand how global trends might impact our own recruitment business over the next 20 years

• Our customers were already concerned about the skills shortages they were facing

• Oxford Economics provided a globally consistent analysis of demographic and macroeconomic developments across the world’s major economies

• Analysis of industrial sectors and the labour market

• Input from one of the UK’s leading academic labour market economists, Professor Ken Mayhew of Oxford University

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HOW WILL LABOUR MARKETS CHANGE BETWEEN 2010 AND 2030?

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IMPACT OF EXPECTED SECTORAL SHIFTS BETWEEN 2010-2030

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DO EMEs HAVE SUFFICIENT SKILLED LABOUR?

• Over the past decade, number of university graduates increased by 30% in China and 6.3% in India. UK (3.3%)

• Expected to continue as still well behind West

• Quality of degrees?

• Shortage of experienced skilled labour in these countries. Need for inward migration

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‘HOUR GLASS’ LABOUR MARKET IN THE WEST?

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ANY REASONS FOR OPTIMISM FOR SKILLED LABOUR MARKETS IN THE WEST – YOUR OWN AND YOUR CLIENTS?

• Europe and North America are world leaders in several high value added sectors (financial services, R&D, pharmaceuticals research and aerospace engineering)

• Export opportunities – as per capita incomes rise in developing countries, large numbers of people afford products for the first time

• Increasing integration will require rising levels of intermediation Increase demand for financial and business services

• High quality university education means developed countries will remain big suppliers of skilled labour to developing economies

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A CALL TO ACTIONHAYS’ FIVE POINT PLAN

• Keep national borders open for movements of skilled labour

• Agree international code to facilitate employee migration

• Invest in skills and training

• Develop sector specific strategies

• Retain older people in the workplace

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KEEP NATIONAL BORDERS OPEN FOR MOVEMENT OF SKILLED LABOUR

Issue Developing Markets Developed Markets

Worker population

Rapid and significant growth Static, declining

Sector shifts Agrarian to industrial ServicesHigh value

Skills Match High end – acute existing shortageLower end - surplus

High end – existing shortageLower end – forecast shortage

Solution: Ensure migration laws allow appropriate transfer of skilled labour between countries

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INVEST IN TRAINING AND EDUCATION

Developing Job Market Developed Job Market

• Governments to build skills in areas that suit the local economy

• Develop higher education systems in all countries

• Employees to focus on industries where technology drives productivity, not replacement

• Access to re-skilling in developed markets

• Leverage major new markets as populations and prosperity grow

• High end • High skilled

• Semi-skilled • Routine

• Low end• Face to face

Roles

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DEGREE EDUCATION

• Degree classification – what is classed as a first rate degree?

• Reputation of the university? Content of the course?

• Vocational rather than academic?

• What role are employers taking in influencing the development

of relevant courses for business?

Employer engagement examples e.g. Durham University

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WHAT MIGHT BE HAPPENING IN YOUR CUSTOMERS?SECTOR SPECIFIC FACTORS OVERLAY THE MACRO ECONOMIC TRENDS

Financial servicesLikely to remain key in existing locations

Will require more resources and more advanced skills

HealthcareSignificant additional demand from the West

Further pressure on existing shortages in developing world

Climate change

Jobs losses in fossil fuels

Offset by net job creation in renewable energy

Knock-on impact in manufacturing and production

InfrastructureMassive investment in developing markets

Acute shortages of advanced skills

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RETAIN OLDER PEOPLE IN THE WORKPLACE

Implications

• Maintaining modern and relevant skills

• Propensity for part-time/self employed

• Leveraging experience base

• Safety nets for displacements

Age profile

Age profile

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THE AGE DEBATE• The world’s population is ageing very fast

• Future retirement age in the UK set to rise to 66 for women and 68 for

men in 2044

• Different labour market characteristics – self-employed, part-time, temporary i.e.

more flexible way of working

• Is this supply-led or demand-led? If supply-led, this will likely reduce the supply

of skilled labour available to recruit. If demand-led it is a sign that older workers

will change work patterns to fit employer’s needs

• It is as yet uncertain which is the dominant cause but it will shape the

profile of a future workforce

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GENERATION “Y”

• Have we entered a new generation in the last few years?

• Generation “Y” has to be recognised

• What is Generation “Y”? Generation born between 1980 and 1993

• Shape and influence professional practice for future decades

What are the specific challenges to recruit, develop, engage and

retain the future human capital (Generation “Y”) of your practice to

ensure continued value creation?

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HEADLINES

• Dynamic career progression yet diverging career expectations

• “Classic” finance career path - progression and success indicated by

increasing knowledge and expertise

• “New directions” – breadth of experience outside of traditional

mainstream finance roles

Generation “Y” = huge potential = opportunity

Generation “Y” = high expectations = potential threat

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GENERATION “Y“: REALISING THE POTENTIAL

Report/joint research paper by ACCA and Mercer

• Attraction – how do you open the door to young talent?

• Lifestyle factor

• Development – unleash the potential but at what cost?

• Retention – how do you keep hold of them?

• Mobility and career ladder

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DON’T JUST TAKE MY WORD FOR. HERE IS WHAT THEY HAVE TO SAY…• “I really feel a company should be environmentally friendly.”

• “The brand is important because it reflects on me as an individual.”

• “The most important thing for me is the career development an organisation can offer

me.”

• “I cannot praise my team enough, it is a special experience to work with them.”

• “I feel the finance job I am doing now was a little mis-sold to me. There is limited career

opportunity and progression.”

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WAR FOR TALENT

• Over 3,000 finance professionals of Generation “Y” took part

in the survey

• Hard reality – over one third said they wanted to leave their

current employer at the present time and over half do not

expect to be with their current employer in 3 years time

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ATTRACTION WHAT COUNTS FOR THIS GENERATION?• Career development and learning opportunities

• Remuneration (base salary)

• Job security

• Job content

• Lifestyle

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DEVELOPMENTWHAT MATTERS?

• Hands-on generation

• Experiential learning and training at the heart

• New learning interventions

• Its not all about e-learning despite what you may think

• Career trajectory and ownership

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RETENTIONAVOID WALK AWAYS

• Challenging work

• Strength of team and line manager relationships

• Keep the career promise

• One size does not fit all

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CUSTOMER CONTROLWHAT DO THEY WANT?

• More for less

• 24-7 in competitive market

• The rise of the business partner – internal and external

• Cost or relationship?

• Your best people

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JOIN-UP? IT’S POSSIBLE

• Generation “Y” thirst for 24-7 media

• Job content – 60/40 rule and diversity

• Importance of mentor systems/career case study experiences

• Think about your brand and footprint – social media strategy

• Corporate social responsibility

• Strength of team/line manager relationships – inclusive not exclusive

• Keep the career promise

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HOT TOPICS WHATS HAPPENING TODAYWILL IT AFFECT TOMORROW?• The rise of professional networking and social media

• Internal resource models – staff “pools”

• Off-shoring – the future for large firms?

• Graduate and school leaver recruitment strategy

• Outsourcing

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CRYSTAL BALL WHAT IS THE FUTURE?

• Fewer transactional staff based in UK and lots of off-shoring for the larger firms

• Transition to UK career based in predominantly advisory work

• Reduction in numbers of accountants in training

• More sharing of human resource – MGI staff bank?

• Older workforce combined with a new generation – flexible work/life balance

• School leaver recruitment above graduate

• CIMA into practice to aid business partnership advice

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2021…NOTHING IS FOR CERTAIN BUT ONE THING WILL REMAIN…

THE BEST FINANCIAL CANDIDATES IN THE

MARKET WILL BE ALREADY EMPLOYED

AND THERE WILL STILL BE A WAR FOR

THE BEST TALENT

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THANK YOU FOR LISTENING

QUESTIONS