In January 2008 McKinsey Quarterly published an article "Making talent a strategic priority". I found there a couple of rather interesting points.
First, a strong argument in favor of long term investments in talent sourcing and development.
Since investments in talent intangibles are expensed rather than capitalized short-termism diverts management attention from longer-term issues such as talent sourcing and career development and blocks corporate growth.
"To a considerable extent, executives must blame themselves for their current talent woes. Granted, shareholders and investment analysts are largely responsible for the obsession with short-term performance. But managers too readily treat talent in a reactive, knee-jerk manner-say, by hiring additional sales and marketing people only when new products take off. "Short-termism," as one European HR director recently observed, diverts management attention from longer-term issues such as talent sourcing and career development. Since investments in talent intangibles are expensed rather than capitalized, managers may try to raise short-term earnings by cutting discretionary expenditures on people development.4 This tendency may turn into a vicious circle: a lack of talent blocks corporate growth, creating additional performance pressures that further divert the attention and thinking of executives toward the short term".
Second, an interesting point that young talent in emerging markets, especially Russia, China and Brazil requires extra preparation to become internationally competitive.
Emerging markets graduate more than twice as many university-educated professionals as the developed world does but for instance in Russia multinational companies can recruit only 10% of graduates with relevant degrees in general and engineering fields and only 20% in finance and accounting. Russian is in this respect at the level of Brazil and China with Hungary, Poland or Malaysia leaving it far behind.
"While the developed world wrestles with falling birthrates and rising rates of retirement, emerging markets are producing a surplus of young talent; in fact, they graduate more than twice as many university-educated professionals as the developed world does. Many organizations have been eyeing this source of talent enthusiastically, but riding the new demographic tide won't be straightforward. HR professionals at multinational companies in emerging markets such as China, Hungary, India, and Malaysia have told McKinsey researchers that candidates for engineering and general-management positions exhibit wide variations in suitability. Poor English skills, dubious educational qualifications, and cultural issues-such as a lack of experience on teams and a reluctance to take initiative or assume leadership roles-were among the problems most frequently cited".
Full article on McKinsey Quarterly is available here subject to registration
