The war for Talent

Few years ago I read a book called “The War for Talent”, written by Michaels Handfield-Jones, published by Harvard Business School Press about the new management approach for the 21st century. In the book, the author suggested that to succeed in this highly competitive world, company must cultivate their talents because business value is created by new knowledge and knowledge is created by “knowledge workers”. According to the author, the “Industry age” was over and we are in the “Information age” where success or failure is highly depending on the knowledge and skills of people who have the potential to add value to the business. The author believes that manual labor is worth less and can be sent to lower labor countries. Knowledge is worth more and should be kept within the company. However, there are few people with such knowledge so companies must find them before their competitors can get them and that is the beginning of “the war for talents”. In the end he posed the question “Where are we going to find the talent essential to our future success?” Today this book is a required reading in many MBA programs in the U.S and many Chief Executive Officers consider this book an important contributing factor for their strategies.

Last week in the technology conference in England, several senior executives told the audiences that they could not find enough talents to operate their company's business. One executive said that the situation was so bad that he have to spend a lot of money to recruit talents from many foreign countries to fill that gap. It seems that “The War for talent” is now spreading all over the world. As many companies export works to lower labor countries to reduce costs, the import skilled workers from other countries to create value begins. Many companies in the European Union begin to hire talents from their member countries because these people can travel freely to work within the union. In the U.S, there is the H1B visa program to bring skilled workers from other countries to work in the U.S, especially in the technology and medical fields.

Few years ago, companies had no problem finding people to work for them. If they could not find people with the right skills, they would train them. Of course, training might take time, few weeks or few months but eventually everything was fine because people were happy by having jobs. But today, everything changes because talent people are not so patient and not faithful as workers from previous generation. Many companies found themselves training employees only for them to leave and bring their acquired skills to their competitors for more money. Today young people change jobs often to get better salaries and better opportunities. To counter that, companies have to find talent that is “ready-made”. Instead of training, they turn to universities that have training programs that meet their needs and hire graduates there. If they can not find enough talent within their country, they will find them in other countries.

In the past several years, large companies like IBM, Microsoft, Google, Oracle or Intel only recruited people from selected universities because they know the training programs and the quality of students. Students from Carnegie Mellon, Stanford, Berkeley or Massachusetts Institute of Technology have no problems of finding works when others from lesser known universities have problems of getting job offers, especially in the difficult economic time. The same thing happens in China, as students from BeijingUniversity, TsinghuaUniversity or ShanghaiJiao-tongUniversity are being offered jobs but many from other universities are having difficulty to get jobs. Last month when I was in China, the government reported that more than 8 million graduates could not find works this year alone. Similar things are also happen in India, Japan, S. Korea as well as Europe. Top university students can get what they want but students from other average universites are having difficulty to get jobs. One government official mentioned in an England newspaper said: “It is not what you study but what university that you attend will be a key factor to determine your future and your job opportunity. As education system is slow to change, the better school will make the necessary changes to meet the needs of the industry and provide their students with better opportunities”.

To encourage improvement in education, several British parliament members have suggested that government only provide funding support to universities that have better employment ratio for their graduates. In the U.S where education system is more independent of government, private schools have thrived significantly and most of the top universities are all privates. It is difficult to get accepted in private schools due to their strict selection and high quality demand of their students. In their quest to find more talents, many companies begin to look oversea and spend a lot of efforts to bring talents to their companies. They will pay all expenses for getting young potential graduates and even paid all legal and immigration costs so that they can get what they need but this “Brain drain” also receives a lot of criticisms for taking away the best potential assets of developing countries.

However, talented people want to work in places where they can feel good and enjoy what they do. In today's knowledge-based businesses, these young talented people are fully aware of their value, of what they are worth, what they can do, and they are taking advantage of the shortage and “the war for talent”.


  • Blogs of Prof. John Vu, Carnegie Mellon University

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