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CEO's Corner The New World Work Order So I was in Toronto giving a talk on MSP (managed service programs, that is), when I finally articulated what had been bothering me for awhile. Everyone has been talking about the global demand for talent. Everyone has been talking about generational shifts and talent supply issues. The two problems are on a collision course—economically, culturally, and logistically. We have a global talent supply problem and some really deep-seated global talent quality issues. All the king's horses and all the king's software may not be able to fix productivity in the long term. This may be particularly true in some of the technical professions. And before we start dishing on the East or the West, I would suggest—at least, from what I have heard anecdotally from both sides of the globe—problems are brewing everywhere. Managed service programs are, at least for contingent labour, the most holistic approach to managing the workforce from planning, pipelining, and cost perspectives. Of course, they lack the succession planning and performance management strategic elements reserved for full-time labour, but I worked some discussion relating to those issues into my address in Toronto. If you are reading this at a major company today, chances are that 25 per cent to 35 per cent your workforce is contingent labour in some form or another. Of that group, some portion is longer term, composed most probably of technical and professional contractors. A student graduating from college in 2012, according to some studies, is expected to have as many as 10 to 14 jobs…by the age of 38. What is the difference between hiring that long-term contractor for a year through your MSP and hiring them direct? Is it regulatory? Is it a succession planning issue? Arguably those both maybe true, but equally true is that you need to rapidly deploy and engage that hire FT or PT in short-time windows, and you may want to ask your MSP provider to evolve in a way to help make 25 per cent to 35 per cent of your workforce more productive. What's more, that contingent percentage may grow as new grads prefer contracting over direct employment and as the regulatory environment changes. You may want to think about how you will face the realities of the future management of talent in short-term horizons. How do you make them care about your corporate outcomes? Canada offered a great economy for focussing a discussion about managing recruiting under global pressure. Unemployment is 7.62 percent. That sounds a little high to readers in the United States, but in truth the average unemployment since 1982 has been 8.53 percent with the low in May of 2007 at 5.6 percent and the high in December of 1982 at 13.10 percent. The estimated natural rate of unemployment is estimated in the low "6's." Do you know what these numbers are in your economy? You should. So Canada is at a strong "B" for employment. Yet it has a labour pool the size of California and must compete globally for talent. Its banking sector, for example, has firms like Royal Bank of Canada. RBC can't very well tell wealthy Canadian investors or Canadian business leaders, "You need to accept lower returns because we don't have the labour pool to compete with New York banks like Goldman Sachs or Morgan Stanley for the best financiers." Not a winning recipe, even with "go team" at the end of the sentence. All business now competes globally, and as a result all business need to have the talent be a global player regardless of the available pool. It is intense pressure. The truth is that regardless of when McKinsey and Company published (it was 1997) that war had never "started" and never "ended." (If you have ever heard me speak live, you have heard this diatribe before, so I apologize in advance.) The "War for Talent" is perpetual. I doubt any of you have ever run an ad stating, "We seek mediocre employees capable of doing passable work." The truth is that everyone has always competed for the top 10 per cent of the talent pool, and the McKinsey people just got the word late. The only variations in the "war" are that sometimes there are just more jobs than others, but there is never, ever a desire for subpar. [4] HRO TODAY GLOBAL | FALL 2011 CEO: Elliot H. 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