U.S. suffering a critical shortage of middle managers

May 17 2007 by Nic Paton Print This Article

The focus of many American businesses on nurturing and grooming their top-level talent is masking a growing crisis further down the management scale Ė with more than half admitting they are suffering from a "critical" shortage of middle managers.

A survey of 750 business and 55 senior HR executives by talent management consultancy Bersin & Associates has found more than half admitting to a critical shortage of line managers and a similar percentage saying they struggle to identify, hire and develop mid-level managers.

Just under half identified critical shortages in engineering and other technical professionals, such as nurses, and nearly two out of five reported similar shortages among mid-level management sales professionals.

The research suggested U.S. businesses were suffering from talent shortages across all industries, but the problem was particularly urgent in healthcare, government, utilities, oil and gas and telecommunications.

"Business and economic growth, changing workforce demographics, and constrained corporate spending have collided to create daunting talent-related business challenges," said Josh Bersin, Bersin & Associates president.

"We found that carefully crafted talent management strategies can address these challenges and significantly improve business outcomes. Organisations without such talent management strategies are at a tremendous disadvantage. Unfortunately, our research shows that many companies fall into this category," he added.

The survey cited the example of a leading defence contractor that concluded it would be facing a shortage of 45,000 technical professionals by 2010.

Its response, said Bersin, was to develop a multi-pronged talent management strategy to recruit and develop technical professionals and managers.

But such a proactive response was rare, Bersin warned. In fact, just a fifth of the organisations polled admitted to having a talent management strategy in place and fewer than five per cent had implemented a clear strategy with operational plans and executive ownership.

The consultancy looked at 62 talent-related processes to identify what were the most valuable for businesses, eventually identifying 22 that resulted in the highest levels of improvement.

The top three of these were performance management (which led to a 34 per cent improvement), competency management (a 31 per cent improvement) and better sourcing and recruitment (a 27 per cent improvement).

Other effective interventions included better leadership development, succession planning, workforce planning and more focused HR systems, said Bersin.

"Our research identified highly refined sourcing and recruiting, performance-based coaching, and identification of key competencies as the processes which drove greatest business results," said Bersin.

"Organisations which integrate and optimise these processes can create a high-performance culture, a deep understanding of critical talent needs and future shortages, and a clear view of the best sources for new talent," he added.

"It is no longer enough to simply work harder to recruit and manage people. Organisations must now work smarter and take a holistic and integrated approach to identify, source, recruit and develop talent," he concluded.