The global talent shortage caused by the impending wave of baby boomer retirements could become even worse.
(PHILADELPHIA, PA), December 12, 2007 – The global talent shortage caused by the impending wave of baby boomer retirements could become even worse. The leadership drought in mature markets like UK and US plus the demand for new leaders in booming Asian economies like China and India require local organizations to take urgent action, according to global management consulting firm Hay Group.
Hay Group in conjunction with Chief Executive Magazine released the results of its survey The Best Companies for Leaders. This showed that companies in Europe and North America are beginning to recognize the urgency of developing new leaders to compensate for a generation of baby boomer leaders exiting the workforce
The annual survey of the top 20 Best Companies for Leaders considered almost 800 companies for ranking. In 2007 General Electric came out on top, followed by Procter & Gamble (click to see table 1).
The survey showed that there are a clear set of practices to develop and retain the next generation of leaders. Investing in these key practices makes the most difference to organizations today (click to see table 2).
“There is no easy ‘tick the box’ solution, said Rick Lash, head of Hay Group’s Leadership and Talent practice for North America. “If organizations want to ensure they have the right leaders in the right roles to not only meet future talent shortages but also continue their growth in an increasingly volatile global economy, they will have to commit to major investments over the long haul,” Lash said.
“Organizations need to worry about the supply of future leaders, as well as about whether they really understand the future roles that will be critical to driving their business strategy,” he said.
In the study, 86.1% of respondents feel that, compared to a few years ago, the urgency to develop leaders in their organization has increased.
The survey identifies seven best practices that are most effective for leadership development. However, it is the top three practices in this list that drive the rest. If companies are willing to do the ‘heavy lifting’ in these three practices, they will greatly increase their chances of keeping their leadership pipeline full.
The top three of the seven best practices identified in 2007 account for 68% of the variance in leadership development outcomes. The best organizations for leaders have firmly established the conditions necessary for sustainable leadership. That includes three key elements – leadership development of all kinds is occurring at all levels in the organization, managers are held accountable for their leadership behavior and the work climates they create, and finally, development of teams is just as critical as development of individuals. Without these three practices firmly established, organizations waste time, effort and dollars with one-off events that cannot be sustained.
The last four leadership development practices combined bring the total explained variance in leadership development outcomes to 77%, i.e., combined they add 9% to the variance explained by the top three practices.
The annual survey of the Top 20 Best Companies for Leaders considered a total of 790 companies for the ranking. Of the companies in the study, 47.1% were headquartered in Europe, 31.2% in North America, 15.0% in Asia/Pacific, and the remainder in Middle East/Africa and South and Central America.
About Hay Group
Hay Group is a global consulting firm that works with leaders to turn strategies into reality. We develop talent, organize people to be more effective, and motivate them to perform at their best. With 87 offices in 47 countries, we work with more than 7,000 clients across the world. Our clients are from the public and private sector, across every major industry, and represent diverse business challenges. Our focus is on making change happen and helping organizations realize their potential.
For more information, or to schedule an interview with an expert on the survey, please contact: Mitch Kent; 215 861 2315; firstname.lastname@example.org.