Managing the virtual global workforce

by 17 Oct 2006

As the war for talent grows increasingly global, companies will need to find and retain managers with key skills in managing remote, virtual teams. Allan Schweyer reports

Western business leaders cannot afford to focus their talent acquisition plans on the domestic workforce and skilled immigrants alone. Increasingly, organisations of all sizes will need to develop and manage remote, virtual project teams and entire overseas workforces in order to compete. The winners will build networks into the farthest reaches of the planet and master the challenges of assembling and deploying a global virtual workforce.

As of the first quarter of 2006, according to the US Bureau of Labor Statistics, unemployment for knowledge workers (defined as anyone with a bachelor’s degree or higher) was hovering just above 2 per cent and on the decline throughout the US. On 1 June, US Citizenship and Immigration Services (USCIS) announced that as of 26 May, the year’s quota for H1-B visas (for skilled foreign workers) had been reached. It is predicted that 76 million baby boomers in the US will retire over the next five years, to be replaced by a generation only half as large.

The global search for talent must focus increasingly on building remote capacity as opposed to recruiting foreign talent to domestic shores. As such, organisations will need specialised skills in recruiting – and also core competencies in managing –remote, virtual teams.

In today’s age of talent, leaders must become preoccupied with the challenges of assembling, deploying and keeping a workforce that is as good as or better than that of the competition. In the long run, all other opportunities and threats pale by comparison.

Today’s market for talent in North America, Australia, Japan and much of Europe is characterised by the following: flat or declining growth in new knowledge workers (defined as those with a bachelor’s degree or higher); steadily increasing retirement of college-educated, experienced ‘boomers’; slower immigration of skilled workers; intensifying global competition for top talent; and increasing emphasis on virtual, remote workers, mostly in developing nations.

Immigration to the rescue?

The US, Canada, Australia and much of the Western world has long enjoyed an advantage in attracting the world’s skilled and talented people. The US in particular has always welcomed ambitious migrants from around the world. And while it may still be among the most attractive destinations for top talent, recent security measures and restrictions on immigration in the US have resulted in a greater than 30 per cent decline in arrivals of skilled foreign workers and students since 2001. The timing is particularly bad since it coincides with efforts by governments around the developing world to retain their knowledge workers.

Across the globe, countries are waking up to the fact that they must attract and keep talented workers. In many countries, including India and Ireland, the efforts don’t stop at retention. These and other governments’ calls for expatriates to return home have become louder and more successful. Everywhere governments and industry are working together to stop the outflow of knowledge workers. Western firms will find it increasingly difficult to convince top talent to emigrate. More and more, the battles for talent will occur overseas and offshore.

However, even in India and China where one-third of humanity lives, skilled talent is in short supply. India produces 2.5 million new college graduates per year, but it is estimated that only 10 to 25 per cent possess the skills and language abilities necessary to work for a US or Western European firm (in Chinaand other developing Asian markets, the proportion is much smaller). The McKinsey Global Institute predicts pockets of skills shortages in India by 2008. China faces declining workforce growth starting in 2012. There is no time to waste, therefore, in creating the alliances and networks necessary to gain access to skilled talent in these and other countries.

The rise of the global, virtual workforce

The global remote workforce (onshore, nearshore and offshore workers who perform services for employers that may be a few miles or thousands of miles away) already numbers in the hundreds of millions. Fuelled by rapidly improving telecommunications technologies and accelerating access to broadband, this component of the global workforce is growing at many times the rate of the traditional workforce. By 2009, one-quarter of the world’s workforce, or 850 million people, will use remote access and mobile technology to work on the go or at home, according to research firm IDC.

For Western firms of any size, it is possible to build global networks to reach this talent. For any company that anticipates future skills shortages, building remote workforce capacity is an imperative. This can only be done by visiting places like India and China to create the relationships with global services, business process outsourcing firms and institutes of higher education that will supply talent in the years to come.

Global managers needed

Among the principal challenges in leveraging remote teams is finding managers with the right mix of skills, temperament and other attributes necessary to direct, monitor and motivate workers they may rarely, if ever, meet in person. The globalisation of the workforce and supplier networks requires a new breed of executives who understand the business realities and cultural complexities of global projects and can expertly interface between local and international teams, clients and vendors.

Since 2000, Lori Blackman, founder and president of DNL Global, has worked as a retained recruitment consultant to India’s largest IT services and consulting organisations. According to Blackman, “Indian IT firms are able to hire technical expertise better than anyone. But their history of providing backend application development and maintenance solutions gave them little to no experience in the identification and acquisition of business and management consultants who could effectively play the liaison role between their Western clients and the delivery teams, onsite and in India. We’ve worked closely with our client-partners to define the roles and the attributes of successful candidates and to document those competencies.”

Between March and November 2005, DNL Global conducted a research study on the competency differences between managers of local projects and global projects, and managers that were identified as top-performing global managers. Blackman and her team turned to their established client and candidate base and the assessment expertise of Batrus Hollweg to complete the task. Over 300 survey respondents were assessed against a range of competencies (which will be covered in the second part of this article in issue 117).

Based on preliminary findings, four key skills were identified as requirements for global managers: adaptability, global mindset, cultural agility and relationship management. Successful managers may already possess these skills, but these findings show the level of proficiency dramatically increases with top performing global managers. The stakes are high in identifying, recruiting and keeping this special breed of manager. The OECD projects that more than 98 per cent of global workforce growth will occur outside of North America and Europe over the next three to five decades – and top talent, whether it be in India, China or Brazil, has far less need to leave their country for work today than in the past.

Allan Schweyer is president and executive director of The Human Capital Institute.

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