Europe Will Have to Face a Lack of Talents

Contact: Diana Karaffová
Deloitte Slovakia
Clients & Markets Senior Coordinator
+421 2 582 49 187

Bratislava, 20 August 2008 – European firms will soon face a significant decrease in the number of talented employees. According to a recent study by Deloitte, a Big Four consulting firm, this decrease is predominantly attributable to an ageing population, a shrinking labour force and changes in employee expectations. To prevent the loss of talents, firms will have to make a considerable change to their management strategy.

Based on Deloitte’s analysis of interviews with about 60 organisations having almost 2 million employees, the number of talents over the next 40 years will shrink by 13 percent.

„Starting in 2008, the number of open positions will be greater than the number of candidates; thus the demand for suitable employees will exceed supply. Talent management will have to expand and shift its focus to more employee roles and segments rather than high-performance individuals in leading positions,” says Petr Kymlička, Partner in Charge of the Consulting function of Deloitte Czech Republic.

The study, which included 11 Central European companies, showed that Czech and Slovak firms are planning rather formal development programmes for their talents. The main objective of talent management usually involves succession planning.

„Not only less qualified employees, but also graduates of universities leave to work in Western European countries where they often perform very low-grade work. However, the number of firms which offer jobs with higher added value although still less paid than abroad has grown in Slovakia over the recent years. This gap has been gradually reduced, while the number of Slovaks abroad accounts for approximately 200 thousand.“
—Andrej Nosál,
Business analyst from Deloitte Slovakia.

„Talent management is mostly directed at key employees, successors and graduates for whom specific development programmes are established,” says Mr. Kymlička. „We see significant opportunities not only in a clear definition of individual talent groups, but also in the programmes applied after the talents have been identified. Our principal recommendation to companies is to make use of employee rotation within the company, establish diversified teams, organise international secondments, and support networking and other programmes which facilitate the talents’ greater identification with the company.”

As in many other EU countries, Slovak politicians and economists are beginning to be concerned about the main cause of the labour force shrinkage – an ageing population – which is predominantly related to the Slovak Republic’s decreasing birth rate. According to Eurostat estimates, the Slovak Republic’s population will decrease from the current 5.3 million to less than 4.6 million by 2051. Over the next 40 years the current 1:4 ratio of retirees to working age people will drop by 50 percent. Some EU countries such as France, Ireland, or Sweden rely on an increased number of immigrants to help compensate for the employee deficit; however, immigrants predominantly represent low-educated cheap workforce. This is related to another current problem of Slovakia, when many young people leave to work abroad.

Below you can find selected data from the Deloitte study

7In talent management, 76 percent of organisations focus on high-potential employees, principally on leading position managers. However, it is necessary to implement a broader approach which identifies talents and key employee segments all across the company’s hierarchy.
In 75 percent of organisations, talent management is provided by means of HR departments. Based on the results of the analysis, better results are achieved through the direct support of senior management.
Only 25 percent of organisations are aware that direct work contact of the key talents and company leaders is the strongest stabilisation tool.
60 percent of firms state they support employee engagement in social issues under their corporate social responsibility programmes.
80 percent of firms follow traditional approaches regarding employee remuneration based on annual results. However, special remuneration packages for talents will be of key importance for firms wanting to set themselves apart from their competition and be a more desirable organisation on the labour market.

For the full study, please visit www.deloitte.com/sk/have-you-got-talent.

About Deloitte

Deloitte provides audit, tax, consulting, and financial advisory services to public and private clients spanning multiple industries. With a globally connected network of member firms in 140 countries, Deloitte brings world-class capabilities and deep local expertise to help clients succeed wherever they operate. Deloitte's 165,000 professionals are committed to becoming the standard of excellence.

Deloitte's professionals are unified by a collaborative culture that fosters integrity, outstanding value to markets and clients, commitment to each other, and strength from cultural diversity. They enjoy an environment of continuous learning, challenging experiences, and enriching career opportunities. Deloitte's professionals are dedicated to strengthening corporate responsibility, building public trust, and making a positive impact in their communities.

Deloitte refers to one or more of Deloitte Touche Tohmatsu, a Swiss Verein, and its network of member firms, each of which is a legally separate and independent entity. Please see www.deloitte.com/sk/about for a detailed description of the legal structure of Deloitte Touche Tohmatsu and its member firms.

Deloitte Central Europe is a regional organisation of entities organised under the umbrella of Deloitte Central Europe Holdings Limited, the member firm in Central Europe of Deloitte Touche Tohmatsu. Services are provided by the subsidiaries and affiliates of Deloitte Central Europe Holdings Limited, which are separate and independent legal entities. The subsidiaries and affiliates of Deloitte Central Europe Holdings Limited are among the region’s leading professional services firms, providing services through more than 4,000 people in more than 30 offices in 17 countries.

In Slovakia, the services are provided by Deloitte Audit s.r.o., Deloitte Tax k.s. and Deloitte Advisory s.r.o. (jointly referred to as “Deloitte Slovakia”) which are affiliates of Deloitte Central Europe Holdings Limited. Deloitte Slovakia is one of the leading professional services organizations in the country providing audit, tax, consulting, risk services and financial advisory services through over 240 national and specialized expatriate professionals.