War for talent trumps pursuit of low costs

War for talent trumps pursuit for low costs

Global companies are more focussed on finding top talent than on setting up operations where they could be paying lower salaries.

That was one of the conclusions from ADP’s third annual HR Question Time this month.

On the six-strong panel to discuss ‘Borderless HR’ were representatives from Barclays, Sunrise Senior Living and ADP, as well as Anthony Hesketh, a Doctor and Senior Lecturer at the Lancaster University Management School.

Hesketh talked about how business is growing more global and more local at the same time: it is becoming “glocal”. He said that the concept of people being “shipped out from the UK or US… is being pushed back against by the developing economies”.

At the same time, pressures to outsource come from the low growth and rapidly-rising salaries of the developed world.

Capitalism will always invest where there are the greatest margins, but Hesketh stressed that there had been a change in motivation for outsourcing.

What had previously been driven by the pursuit of lower wages and process costs was now fuelled by the competition for skills. ‘The war for talent is absolutely dominating everything’.

Mike Molinaro, Chief Transformation and Operations Officer of Human Resources at Barclays, agreed that companies will invest where there’s talent, and not necessarily where the salaries are lowest.

Molinaro also pointed out that companies had to be equipped to manage people who weren’t in the same building.

One work team might have members spread across different locations around the world, and there was a great opportunity for HR to build the core competences of remote working.

The question of how to develop managers with the skills to get the best from remote discussions, to build remote collaborations, is still to be resolved, he added. “Is it a technology answer, a management answer or is it a cultural answer within that business?”

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