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Effective Use of Business Talent in Contemporary Globalism by Professor Bryan Christiansen, MBA New York Institute of Technology December,

2007

The purpose of this article is to highlight that current American hiring and retention practices in business are generally distressing long-term US productivity in an age of high global competition, and that these practices negatively affect the long-term economic status of firms and the nation (Drucker, 2002; Porter, 1998). As productivity remains the major determinant of national growth, some practical solutions suitable for firms both large and small are offered to increase shareholder and national wealth in the next global stage where the paradox of American power can continue to prosper (Nye, 2003; Ohmae, 2005). While written primarily for a US audience, this piece is also highly applicable for other developed regions such as Europe, a continent that will also continue to experience major demographic shifts over the next 50 years due to collapsing birth rates and other factors (Drucker, 2002; Kotlikoff & Burns, 2004).

Certain Realities Dr. Peter F. Drucker of Claremont University in the USA, who is considered the worlds premier authority on the field of management, views contemporary globalism as one of profound transitionpotentially even more influential than the structural changes triggered by the Great Depression and the Second World War. Drucker contends there are five social and political certainties that will shape business strategy in the 21st century:

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the collapsing birthrate in the developed world; major shifts in the distribution of disposable income; global competitiveness; the growing incongruence between economic and political reality; and a redefinition of corporate performance (Drucker, 2002). There is little doubt the globalization of today affects nearly all aspects of business worldwide. Although globalization has actually existed since the early beginnings of humankind, what makes contemporary globalism so different from globalization of the past is the speed of business change due primarily to technology (Gates & Hemingway, 1999; Nye, 2003). Business efforts that used to take days or months can now be achieved in a fraction of the time largely due to technological advancements and their successful implementation over the past 20 years around the globe. The USA is already experiencing a shortfall of over six million workers to fill the jobs currently available in the country. However, this raw number is expected to explode beyond 10 million by 2010. Moreover, these numbers do not take into account the changing nature of future positions requiring skill sets that are often in short supply in the US workforce today (Herman, Olivio, Gioia, 2003). Of particular note are workers with fluency in foreign languages such as Arabic, Farsi, and Mandarin Chinese that represent populations of high importance to American interests, according to the US State Department (US Department of State, 2007). According to the US Department of Labor, the countrys labor force will grow to 162 million persons by 2014. From this pool, the youth labor force aged 16 to 24 and the primary working group aged 25 to 54 will decline; however, workers 55 years and older will increase from 15.6 to 21.2 percent of the entire labor force by 2014. By then, the

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percent change in total employment by major occupational group will be led by professional and related positions, followed by service then management, business, and financial occupations (US Department of Labor, 2006). Clearly, the older Knowledge Worker as coined by Drucker will become increasingly important in a nation experiencing serious worker shortfalls (Drucker, 2002). In addition to these labor force realities, the world economy is further developing into a system of region-states and trading blocs such as BRIC (Brazil, Russia, India, China), the Baltic Corner (Estonia, Latvia, Lithuania), and the European Union that will vie for economic supremacy in the coming years (Ohmae, 2005). In fact, by 2039 the BRIC economies together could become larger than the combined economies of the original G6 nations: US, Japan, UK, Germany, France, and Italy (The Goldman Sachs Group, Inc., 2003). The indications here should be self-evident. Therefore, more effectively using our business talent to compete on par with these future region-states and trading blocs will be imperative to our long-term economic success as a nation. Thinking with a global mindset with regards to hiring and other business decisions throughout the enterprise is both essential and practical.

Healthcare Example One of the most poignant examples for this discussion is the present and extensive shortage of nurses in the USA, a situation that is expected to last at least through 2014 (US Department of Labor, 2006). This topic alone provides two solid examples for consideration: 1) the healthcare industry as a general example, and 2) the nursing profession as a specific example. Page 3 of 10

As with many other American organizations, healthcare institutions in this country are very concerned with quarterly Profit/Loss and Balance Sheet figures that are often highlighted by Wall Street. Concentrating on such short-term financial results restricts hospital and related executives from being able to focus on the big picture regarding their organizations futures. As a result, the US healthcare industry has experienced a Tail-Spin effect on its workforce stability since 1990 (Herman, Olivio, Gioia, 2003). This effect will continue for years to come, and serves as a very strong warning for other US industries and firms. Job openings for Registered Nurses (RNs) in all specializations will grow much faster than the average for all US occupations through 2014. However, the nursing industry will continue to have massive employee turnover due to deteriorating conditions within hospitals and other areas of the profession as outlined earlier (US Department of Labor, 2006). In addition to high turnover, the nursing profession in the USA also suffers from the faulty hiring and retention practices that have become all too common in American organizations today. Therefore, it is vital the US places special focus on the plight of the nursing profession. This is important not only to care adequately most significantly for our 76 million aging Baby Boomers who will retire over the next 20-30 years, but also to ensure a similar situation does not occur in other important industries in which the USA has a truly sustainable, competitive advantage. An example includes raw research and development for potentially disruptive industries such as biotechnology and synthetic engineering.

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Recommendations Many issues surround specific action items that are feasible ones our business organizations can use to alleviate the coming talent wars due to the situations described above. One of the most obvious issues is employment law in the USA. Other issues focus on concepts like human capital replacement models, retention rates, and tenure equity that are all of major concern to our Human Resource Departments (Effron, Gandossy, & Goldsmith, 2003). However, offered below are practical solutions that should not significantly interfere with these concerns, with particular emphasis on US labor laws. First, CEOs should redefine the role of Human Resources Departments in context with their corporate cultures, including their use of technology such as the Internet and database driven applications to recruit potential candidates (C.A.N., Inc., 2007). Grooming Chief Human Resource Officers (CHROs) who instill throughout their organizations a truly solid understanding how hiring decisions affect the firms overall performance within the context of contemporary globalization is crucial. There is also a need for serious reexamination of the so-called HR Checklist that is used too often to screen out otherwise qualified and talented applicants in the initial steps of the hiring process. The qualifications and requirements on this Checklist are often based on cookie-cutter resume principles that must be dismissed, particularly given the realities of worker shortfalls outlined earlier. As any business forecaster can attest, past performance does not necessarily equate to future results, but many firms view resumes and potential job candidates in this manner. Therefore, more use of

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concepts and metrics from industrial-organizational psychology to employ talent well beyond the boundaries of pre-defined job descriptions or prior titles would be most beneficial to companies, candidates, and employees alike. Second, the older Knowledge Workers as described earlier should be especially targeted for retention because their experience is not easily replaced by the younger contributors in our national economy who are diminishing in number as mentioned earlier (Drucker, 2002). Continuous training of our Knowledge Workers will remain paramount in the future to improve key skill sets needed in todays globalization, and online learning will be the most effective and expedient method for such workers. Therefore, training budgets should at least be maintained, if not increased, for optimum results in the long-term. Training should focus on foreign area and language knowledge in particular, but also on the common business subjects of accounting, distribution, finance, marketing, sales, and technology. Obviously, other areas specific to a companys business should be included in any continuous, corporate training program for its employees. Third, further attracting Americas Third Culture Kids (TCKs) to the US workforce who have the unique foreign cultural understanding and language skills to handle business associations and interaction with professionals from other nations is highly suggested. Originally coined by sociologist Dr. Ruth Hill Useem from the University of Michigan in the 1960s, TCKs, are persons such as Americas military brats, children of diplomats, or missionary offspring who have spent significant time as children in one or more cultures other than their birth culture, thus integrating elements of

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those cultures into a third culture (Pollock, 2001). As such, these individuals are in a unique position to interact well with people of other nations in business settings for optimum results in an era where interaction with foreign professionals has become a necessity due to Americas need for skilled workers beyond its borders (American Immigration Law Foundation, 2004). As many TCKs do not often return to their birth country until later in life, there is a need to develop specific recruitment programs to attract those born in the USA back to the country during their prime working years. Fourth, companies must improve their awareness of employee skill sets that already exist within the firm, and subsequently take advantage of such knowledge in a timely manner. Although larger firms in particular have rather extensive databases of these skill sets in expert and other systems, companies of all sizes could do a much better job of recognizing the idle talent that lies within their domains before such talent disappears for other opportunities. Finally, speed in the hiring process is critical. Many firms and their managers spend too much time with the interviewing process, and as a result often lose very talented candidates who go elsewhere. In fact, the US Department of State significantly shortened its hiring process for Foreign Service Officers in 2007 because this institution of American diplomacy was losing too many qualified candidates under the old system. In particular, those candidates fluent in the super critical foreign languages of Arabic, Farsi, Mandarin Chinese, and Urdu were taking their skills elsewhere because of the

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standard 12-18 months or longer it took to complete the entire hiring process (US Department of State, 2007).

Conclusion The American writer, Max Depree, once stated, We can not become what we wish by remaining the way we are. Given the effects of todays globalization, this statement holds particular value for the developed nations of the world, as well as for developing economies. The world is certainly a vastly different place from the one in which our parents and grandparents worked and lived. Therefore, creative solutions to future business challenges must become the norm rather than the exception, and our current hiring and retention practices are of special note. Pursuing anything less places our own futures, as well as those of our children and grandchildren, at unnecessary risk. The time to act is upon us as contemporary globalism has arrived regardless of our state of preparedness for it, and many future jobs in the USA and elsewhere will require higher education and training than ever before in this global, multicultural society. Companies everywhere simply must do a better job of using their available talent to compete effectively in this century, regardless of the available manpower in their respective countries of origin, such as the Republic of Turkeya country with over 68% of its population between the ages of 15 to 64, the prime working years (CIA Factbook, 2007). This is important because of the need to develop and sustain a readily accessible, reliable talent pool within the firm for long-term optimum efficiency and productivity. Anything less will only court future discord within the firm, as well as within the nation and abroad. Page 8 of 10

REFERENCES American Immigration Law Foundation (2004). Relinquishing Excellence: Closing the Door to Foreign Professionals Undermines the U.S. Economy. Retrieved on December 5, 2007 from http://www.ailf.org/ipc/ policy_reports_2004_relinquishingexcellence.asp. C.A.N., Inc. (2007). The ITS Professional Job Changing System. Denver: ITS Press. CIA Factbook (2007). Retrieved on December 20, 2007 from https://www.cia.gov/library/publications/the-world-factbook/geos/tu.html#Econ Drucker, P. (2002). Management Challenges for the 21st Century. New York: Butterworth-Heinemann. Effron, M., Gandossy, R., & Goldsmith, M. (2003). Human Resources in the 21st Century. London: Wiley. Gates, B., & Hemingway, C. (1999). Business @ The Speed of Thought. New York: Warner. Herman, R., Olivio, T., & Gioia, J. (2003). Impending Crisis: Too Many Jobs, Too Few People. Los Angeles: Oakhill Press. Kotlikoff, K., Burns, S. (2005). The Coming Generational Storm: What You Need to Know about Americas Economic Future. Cambridge: MIT Press. Nye, J. (2003). The Paradox of American Power: Why the Worlds Only Superpower Cant Go It Alone. Cambridge: Oxford University Press. Ohmae, K. (2005). The Next Global Stage: The Challenges and Opportunities In Our Borderless World. Philadelphia: Wharton School of Publishing.

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Pollock, D. (2001). Third Culture Kids: The Experience of Growing Up Among Worlds. London: Nicholas Brealey Publishing. Porter, M. (1998). Michael E. Porter on Competition. Cambridge: Harvard University Press. The Goldman Sachs Group, Inc. (2003). Dreaming With BRICs: The Path to 2050. New York: Goldman, Sachs & Company. US Department of Labor (2006). Occupational Outlook Handbook 2006-2007. New York: McGraw-Hill. US Department of State (2007). Retrieved on December 3, 2007 from www.state.gov.

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