In light of the recent economic climate the news has been filled with stories of companies cutting back on their recruitment numbers. However, a new report shows that these actions may come back to haunt those same companies in the coming years. Creating People Advantage: How to Tackle the Major HR Challenges During the Crisis and Beyond, the report published by The Boston Consulting Group (BCG) and the European Association of People Management (EAPM), predicts that companies will face a shortage of talent in the coming years as the "double whammy" of shrinking birth rates and growing baby boomer retirement combine to diminish the size of the work force across Europe.
The report’s findings suggest a certain amount of short sightedness in the hiring practices of companies. Only 15 percent of companies responding plan their work force more than three years in advance, with 47 percent revealing they do not plan more than a year ahead. This lack of foresight may cause trouble when economic growth eventually returns, the report concludes.
"In ten years, the scarcest resource for a company will be people," Rainer Strack, a senior partner in BCG’s Düsseldorf office and report co-author, said. "Companies should understand how their work force will develop, which job categories drive the business, and how demand will evolve. With the uncertainty prevailing today, the human resources (HR) department should analyze different scenarios to figure out whether and how to find, hire, retrain, outsource, or lay off employees."