Abstract
In the modern world with an increasingly independent and mobile workforce, the traditional relationship between an employer and its employees is radically changing. Long-term associations built upon trust, loyalty, and mutually implied promises of support are being replaced with transaction-based relationships that rely on the mutual exchange of services for value-perceived benefits. The labor force is now multi-generational and comprised of complex cultures, with members holding differing and unique value propositions and definitions. An employer can no longer establish “one size fits all” benefit and career management plans and expect to attract and retain top talent. An organization needs a flexible and comprehensive talent management program that recognizes an individual employee’s self-efficacy and self-determination in defining what is and what is not valued as a benefit, reward, and incentive. This article presents an overview of this changing environment and explores innovative alternatives for attracting, retaining, and managing talent in an e-world.
TopBackground
It is no secret that the world’s population is changing. In the United States alone, 25 million people are projected to leave the labor force between 1998 and 2008 due to death, disability, or retirement (Dohm, 2000). The remaining workforce will be more diverse, with national population increases projected for Black, Asian, and Hispanic races (U.S. Census Bureau, 2004) or by continuing the trend to internationally outsource. Countries throughout the world face similar challenges of changing demographics, apprenticeship and educational program needs, desirable inflows of jobs outsourced from other countries (Richter, 2006), undesirable outflows of jobs outsourced to other countries (Colvin, 2006), and shifting labor and immigration laws (Durfee, 2006).
To manage such challenges, Ireland and Hitt (2006) confirm that strategic leadership is vital for organizational success. In the e-world, the new competitive mindset must demonstrate “…mental agility, firm flexibility, speed, innovation, and globalized strategic thinking…” Strategic leadership traits of the ability to anticipate, envision, and adapt are difficult for competitors to understand and to imitate, which thus create a competitive advantage. This competitive advantage creates a “financial premium” for the organization and is the direct result of its human capital. In a global economy, an organization must invest in their human capital to establish the foundation of its core competencies, to retain its knowledge and skills, and to yield competitive advantages.
Not only does leadership need to attract and retain a skilled workforce, it must also understand the challenges that the workforce faces and what it values. For instance, as the U.S. population ages, an “hourglass society” is resulting, where the “pinched waist” group will need to support its aging parents and elders, as well as its children and possibly grandchildren (Zolli, 2006). Other societies have long felt this pressure of being “sandwiched” between one’s elders and offspring. The balancing of work and family will be essential for workers to meet their own and other’s expectations (Greenhaus & Powell, 2006). Families in general and women in particular (Nyberg Stuart, 2006) will have to make difficult decisions that will negatively impact organizations unless those organizations help them cope with their professional and personal obligations. In return, organizations retain their skilled, knowledgeable workers by establishing empathetic, supportive environments. Without this support, organizations will suffer from decreased productivity, increased absenteeism, poor decision making, and other indicators of an exhausted workforce. To be smart and innovative, people need to be fresh, rested, and open for creative thoughts and inspirations (Fisher, 2006).
Key Terms in this Chapter
Human Capital: The collection of knowledge, capabilities, and capacities of the human resources and processes within an organization with the understanding that this collection has value for, is an asset of, provides economic advantages to, and can be enhanced by investment from the organization.
Benefits: Also called “fringe benefits,” benefits are material aids that are provided or due to an employee as a right of employment, as opposed to a privilege provided to an individual, with the usual types of benefits being health insurance, dental insurance, life insurance, voluntary disability insurance, paid time off in the form of vacation or sick time, tuition reimbursement, profit sharing, and so forth.
Compensation: Receipts of payments or remuneration for service or performance rendered, such as wages, salaries, cash bonuses, and so forth.