Mapping Global Talent: Essays and Insights - Heidrick & Struggles

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1 Industrial The tale of two worlds Dale Visokey Industry practice dvisokey@heidrick.com Heidrick & Struggles Mapping Global Talent: Essays and Insights Top-flight graduates will be harder to lure into the industrial manufacturing sector over the next five years. Recruiters who understand this fact will be at an advantage. The reasons are simple – the global manufacturing sector will grow at a relatively slow pace over the next few years, led by strength in emerging markets. Global passenger car sales, for example, will rise by an average of only 3.5% per year until 2012 and the increase will be driven by demand in China and India. Sales in the developed world will remain disappointing; with the US market set to stagnate and those in western Europe and Japan expected to grow by a modest 2 to 4%. The energy sector will exhibit similarly low-key growth with global energy demand per head expected to average 2.4% per year over the next few years. Slower demand will be the result of high prices and an increased move toward energy conservation in the developed world. There will be a similar story in other major industrial sectors. Given this trend, traditional manufacturing industries and energy companies will need to tackle their less than sparkling growth profile head on and wring as much talent as possible out of emerging markets. One tactic will be the establishment of local training units in the fast growing markets. In China, for example, the logistics firm DHL has already set up its own Logistics Management University, which teaches new recruits everything from courier business to supply chain management. The downside, however, will be losing staff almost as quickly as they are trained. “Multinational operations in China must contend with a 20 to 30% annual staff turnover rate and recruit 1,000 plus employees annually,” says Indranil Sen, a Vice President for strategic intelligence at DHL. “With two years’ experience in logistics, many employees will job-hop and start work for another firm, the incentive being a 50% pay increase.” In the developed world, manufacturing companies can retain trained staff if they are willing to give international opportunities to their top performers. And this trend will be seen all the way up the management structure. In a recent survey of US and European CEOs by the Economist Intelligence Unit, 60% of respondents said their senior management teams will become more international over the next three years. Opportunities for senior management in the emerging markets look set to grow – Chinese automakers, for example, will be keen to hire Western managers over the next five years as they begin to expand into foreign markets.
“In a recent survey of US and European CEOs by the Economist Intelligence Unit, 60% of respondents said their senior management teams will become more international over the next three years.” In the US and European aerospace and defense industries, the major talent challenge over the next five years will be a greying workforce. According to the Aerospace Industries Association, the average aerospace/ defense engineer in the US is currently nearly sixty years old. By 2008, approximately 27% of employed engineers will be eligible for retirement, and during the next decade, the number of employees with science and engineering degrees reaching traditional retirement age will triple. In the developing world, the exact opposite is true, with science and engineering degrees becoming increasingly popular as a means to move up the income ladder. However, visa restrictions in the US and Europe, limiting the immigration of foreign professionals, will remain tough. As a result, the growing ranks of Asian graduates will be increasingly absorbed on their home ground by native firms and the US and European companies locating new manufacturing facilities in these faster growing emerging economies. Given this imbalance, the aerospace and engineering industries will need to make a big effort to attract and retain new graduates, through the establishment of programs that support research, pre-graduation internships, and mentoring activities once a new recruit signs on. Retention will be a major problem; in the aerospace industry, the attrition rate in the one to six year range will be approximately two times greater than in the overall new graduate population. The manufacturing sector also demands blue-collar talent – those steady workers who contribute to the success of a business through a commitment to quality and productivity. Several fast growing developing markets – China in particular – will be an increasingly attractive source of these skills. The Global Talent Index’s ‘flow of foreign direct investment’ (FDI) measurement reveals that some other countries are likely to become more important in this regard. South Africa will rise seven places to rank fifth on the FDI ranking by 2012, a movement that reflects the country’s growing role as a supplier of goods and services to the rest of the African continent as well as overseas. Other countries which will rise up the FDI ranking include Mexico (up five places to 11th) Egypt, Ukraine, and France. Global Talent Index, developed in co-operation with the Economist Intelligence Unit 1
Page 1 and 2: Mapping Global Talent P A C I F I C
Page 3 and 4: contents Executive summary, 2 Essay
Page 5 and 6: BRIC is IC A key finding revealed b
Page 7 and 8: From a search consultant’s point
Page 9 and 10: The case of Procter & Gamble highli
Page 11 and 12: universities and business schools w
Page 13: employee turnover, which it attribu
Page 17 and 18: have the competitive advantage of b
Page 19 and 20: There will also be significant dema
Page 21 and 22: Appendix A Methodology The Global T
Page 23 and 24: Puerto Rico Venezuela Guyana Surina
Page 25 and 26: Appendix D Overall GTI rankings The
Page 27 and 28: Appendix F Quality of compulsory ed
Page 29 and 30: Appendix H Quality of the environme
Page 31 and 32: Appendix J Stock and flow of foreig
Page 33 and 34: Further reading available on www.he
Page 35 and 36: Nepal Bangladesh Bhutan Bay of Beng

Mapping Global Talent: Essays and Insights - Heidrick & Struggles

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