IMPROVING TALENT WHEN TIMES ARE TOUGH

From the desk of Alan Todd...

Mortgage crisis got you down? Gas prices? Consumer debt? Government debt? What can you do to help your company improve talent during an economic downturn?

There’s a lot of talk about a recession in the United States and several factors related to national productivity indicated early this year that our economy was slowing down. Fueling the discussion is plenty of grim news at the national level:

• The International Monetary Fund reports that the cost of the U.S. mortgage crisis may top $1 trillion
• Filling your tank each week now hurts to the tune of $4 per gallon or more
• Consumer debt hit a record high of $2.5 trillion
• The federal government is saddled with $9.4 trillion of debt without a plan to repay the creditors

Debt is not a bad thing if it’s being invested with the intent to create future returns higher than the cost of the debt. In fact, the US Federal Reserve Bank lowered interest rates several times this year in an effort to prompt people and corporations to borrow money to start businesses or to build capacity to produce more products and services. But investors don’t get a good return with low interest rates so they put their money elsewhere and the dollar gets weaker.

The weak dollar causes the US to pay higher prices for fuel and commodities because we can’t get as much for our money. Those higher prices become embedded in all other aspects of our work – raw materials, shipping fees, etc. – and the price of everything else goes up, creating inflationary pressures. All these factors put enormous constraints on businesses, as evidenced by Dow Chemical’s announcement this week that the firm would institute an unprecedented across-the-board price increase of 20%. Think the incoming President has his/her work cut out for them?

With all that, economists still can’t seem to agree if we’re in a recession or not.

The economy’s growth rate did slow for two consecutive quarters; that’s typically a sign of recession. Many companies, however, continue to deliver good performances by winning significant new business in emerging economies and capitalizing on productivity gains they’ve achieved through performance improvement initiatives like Six Sigma.

So what advice can we offer business leaders to help them succeed despite some dismal circumstances? The answer might sound counterintuitive and is one you’d probably expect from CorpU: business leaders should invest in their greatest asset, albeit their greatest expense – their people.

Investments in people are the way to capitalize on the amazing growth in emerging markets. They are the way to find new efficiencies to reduce costs, the way to transition skills from dying to growing industries such as healthcare, and the way to drive innovation that breathes new life into every business.

CorpU is learning first-hand about business challenges facing these growth regions, from Saudi Arabia to South Africa and from India to Indonesia. These areas are experiencing so much growth that they are finding it tough to attract and retain the best talent, especially as wages increase at a faster rate than inflation. Companies in these regions are applying innovative approaches to keep pace in markets that are growing 5 times as fast as the US economy. They are truly in a “War For Talent” and they are coming up with unique ways to develop high-quality talent pools under very challenging conditions.

We’ll explore these talent innovations in the CorpU Weekly throughout the coming weeks. We’ll begin by discussing successful practices for doing business in fast-growth, talent-constrained markets in emerging economies, and how talent initiatives can counterbalance tough financial pressures.

You will learn valuable lessons from petrochemical companies in Saudi Arabia, professional service firms in India, mobile telephone providers in South Africa, and financial institutions in Southeast Asia. This week, visit tv.corpu.com to hear how Wipro hires very aggressively from both the market and college campuses.

Raja Veluswamy on recruiting outside the market

Although India is known for its abundant talent pool, almost 85% of the graduates who come out of college are non-engineering graduates. Leaders at Wipro find that colleges benefit because they can guarantee job placement after the program, and Wipro benefits by getting a fresh supply of much need employees.

Alan Todd, CorpU Chairman of the Board