WORK­OUT Build or buy tal­ent, that’s the dilemma

The Weekend Australian - Travel - - Career One -

COM­PA­NIES are in­creas­ingly choos­ing to build tal­ent in­ter­nally, a Mercer sur­vey shows. This so­lu­tion to the make-or-buy dilemma has been the re­sult of the wider tal­ent short­age in the mar­ket, and the re­sul­tant in­crease in salary pre­mi­ums paid to can­di­dates.

Cre­at­ing a bet­ter, skilled work­force and pre­par­ing in­ter­nal can­di­dates for higher func­tions is be­ing done through a sys­tem of re­ward­ing em­ploy­ees se­lec­tively, the sur­vey says.

‘‘ His­tor­i­cally, or­gan­i­sa­tions have been sim­ply spend­ing re­ward dol­lars where they had the big­gest prob­lems in at­tract­ing and re­tain­ing tal­ent,’’ says Mercer’s busi­ness leader of hu­man cap­i­tal, Ken Gil­bert. ‘‘ But the re­sults of our sur­vey show a grow­ing shift in busi­nesses choos­ing to build tal­ent in­ter­nally, rather than buy it.

‘‘ In the fu­ture we can ex­pect at least a 20 per cent drop in the num­ber of busi­nesses that will opt to sim­ply buy tal­ent as their main so­lu­tion to at­tract­ing and re­tain­ing key peo­ple,’’ Gil­bert says.

‘‘ More than 25 per cent will opt to build it in­ter­nally and 64 per cent will im­ple­ment a bal­ance, up from only 59 per cent that cur­rently pre­fer a bal­ance — buy­ing and build­ing.’’

A dra­matic shift in how busi­nesses de­velop the tal­ent for their growth has been ne­ces­si­tated by staff turnover, which con­tin­ues un­abated. About 39 per cent of the re­spon­dents in the Mercer sur­vey of 300 or­gan­i­sa­tions re­ported an in­crease in vol­un­tary staff turnover. It was 28 per cent last year.

Faced with the chal­lenges in the labour mar­ket, com­pa­nies may have to align re­ward sys­tems in ar­eas of busi­ness that are more cru­cial to their suc­cess, Gil­bert says.

To some de­gree, this re­align­ment of re­wards is al­ready hap­pen­ing: higher salary in­creases were given to those in en­gi­neer­ing (11.3 per cent), con­struc­tion (8.8 per cent) and mar­ket­ing (8.7 per cent). Av­er­age salary in­creases were 4.2 per cent across all sec­tors.

Other sec­tors re­ceiv­ing higher than av­er­age in­creases were ed­u­ca­tion and re­search (6.2 per cent), health care (6.2 per cent) and busi­ness and pro­fes­sional ser­vices (5 per cent).

Be­low av­er­age salary in­creases were recorded for man­u­fac­tur­ing (4.1 per cent), trans­port and lo­gis­tics (4.1 per cent), hos­pi­tal­ity (4 per cent), not-for-profit (3.9 per cent) and lo­cal gov­ern­ment (3 per cent). Among the states, West­ern Aus­tralia (5.6 per cent), South Aus­tralia (5 per cent) and Queens­land (4.4 per cent) were ahead of av­er­age. NSW and Vic­to­ria (4 per cent) were be­low av­er­age.

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