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Lloyd’s ranked talent and skills shortages the #2 risk facing businesses as of 2011, up from #22 in 2009 according to a Human Resource Executive magazine editorial. This was a finding of a study of 500 C-suite and board level executives, which also found that “talent and skill shortages” was one of only two risks that “respondents felt insufficiently prepared for.”

I thought of this when reading Adam Bryant’s interview in his Openers column in the New York Times Sunday Business section (February19, 2011) with Steve Stoute, the CEO of ad agency Translation LLC.  In it Stoute talks about the importance of mid-level talent to fostering young talent  “Any organization is not going to move forward unless mid-tier management helps foster young talent to become better.”  Stoute tasks mid-level talent with the responsibility for both their own behavior (making sure they buy into the belief system of the organization) and that of young talent. These mid-levels are mostly Gen Xers.

Agreed. But one of the problems as I see it as each recession economy turns around is that the mid-tier has been severely depleted in many organizations (e.g., law, financial services, accounting and many more) through massive lay-offs when the recession hit and lingered. That means many firms have senior and junior professionals and staff but are missing a lot of the heavy-lifting Gen X mid-levels who would be experienced and able to lead projects and people and prepare to step into the Baby Boomers’ shoes. This much smaller generation has evolved and shed its “slacker” label and is now working, on average, 10 more hours per week than they were 3 years ago, according to a study by the Center for Work-Life Policy (now the Center for Talent Innovation), a think tank. This applies to those who have jobs, of course.

The population of financial advisors and planners has aged with a sparse Gen X cohort, worrisome for the firms’ client retention and succession planning.

As need for talent and skills heats up with a recovering economy, needed capabilities may not exist in those forced to the sidelines in the last 4 years unless they have been using their unemployment time to acquire desirable skills – probably along with more education debt.

Once again organizations have to play catch up, figure out how to replace the mid-level talent and engage them in fostering the younger talent, many of whom are eager to leapfrog them. There is no quick fix, but here are some thoughts on aligning management of the risks discussed above and talent management.

• When hiring, really think fit and attitude before skills on a resume. You’ve probably heard that “culture eats strategy for breakfast.”
• Hire people who buy into an articulated belief system that includes instilling the good behavior and belief system and the professional development of young talent.
• Make that an explicit part of the job description and reward system. Some of the large accounting firms as well as “best place to work” companies do this.
• Facilitate dialogues among the different generations to avoid/eliminate friction when mid-level Gen Xers are asked to supervise and mentor Gen Y/Millennials and Boomers to do the same for Gen Xers.
• Avoid decimating or sharply reducing mid-level personnel during economic downturns. Instead, selectively offer reduced schedules at reduced pay to minimize lay-offs of valued talent and maintain a consistent competency level during economic cycles. Clients hate turnover and want to see familiar faces.
• Cross-train people to take on other roles when their work slows, including training and coaching junior staff.

Firms must figure out how to manage the risk of talent and skills shortages. Ability to maintain high professional standards in serving, and thereby retaining, clients is at stake.

Please share you thoughts.

Phyllis

 ©  Phyllis Weiss Haserot, 2012.

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* The generational chronology for easy reference: Generations are defined by the similar formative influences – social, cultural, political, economic – that existed as the individuals of particular birth cohorts were in adolescent-early adult years. Given that premise, the age breakdowns for each of the four generations currently in the workplace are approximately:

Traditionalists:                          born 1925-1942   

Baby Boomers                           born 1943-1962

Generation X                             born 1963-1978

Generation Y/Millennials           born 1979-1998

Phyllis is available to speak at your organization or at firm retreats on inter-generational relations, organizational effectiveness and business development topics. Call 212-593-1549 or e-mail pwhaserot@pdcounsel.com or see Speaking Engagements on www.pdcounsel.com for a list of topics or to custom-tailor your own.

Check out *Next Generation, Next Destination*, our blog about succession, transitioning and multi-generational talent management. Visit, comment and subscribe by RSS feed or e-mail. http://www.nextgeneration-nextdestination.com.