UNDERSTANDING ENTERPRISE

Understanding Enterprise

Understanding Enterprise

Question one: What will demographic change means for the small firms' environment?

It is well known that there will be an acceleration of the number of retiring managers in the next ten years, both in the private and the public sectors. This trend is largely due to the high number of births (baby boom) during the decade following WWII, which now translates into an equivalent number of retirees in a rather short period. In the context of legal stability, observations clearly show that European countries are going to experience a very important and unprecedented renewal of their managerial and executive ranks. The large number of people retiring will have several consequences, among them: - A loss of knowledge, skills and habits, which have become rules over time.

A possible disorganisation of structures and managers' jobs that have been based largely on tacit regulations rather than on written rules. In a number of organisations, we will witness a renewal that could reach up to 50% of the managers. Year after year, firms will face huge difficulties to replace the people departing and to develop new talents, who expect modern organisational structures and processes. Large and small companies will have to do more than just replace the retiring managers in order to keep their culture and the tacit knowledge held by these key people. Some international companies have already made plans to recruit and train over the next ten years. Besides recruitment and training, it becomes crucial for firms to reorganise their structures and processes in order to keep the memory of their tacit knowledge, habits and methods that have been developed over time and have brought success. Companies will be required to seriously prepare for a future that is rather uncertain. This is a key responsibility of top management and other stakeholders (line managers, employees, unions, external consultants…) who will be evaluated on their ability to conduct the needed changes and meet the challenges of this new demographic situation.

Talent Shortage: Some Strategies to Overcome It

The Reasons For The Shortage Of Talented People

How can one explain the development of such a structural issue that will concern most - public or private, large or small - organisations in our western economies? The following factors are often cited as the clues to understand the upcoming shortage of talents:

The baby boom generation (born between 1946 and 1964) is now entering the age range in which retirement becomes a viable option. At the same time, the generation that follows the boomers - the so-called “baby bust” is proportionately much smaller and therefore unable to quantitatively replace the departing talents,

The downsizing and minimal recruitment strategies adopted by most organisations during the 1990s have dramatically reduced the number of potential replacements from within. Moreover, and particularly in Europe, the low level of turnover among managerial ranks has increased the age pyramid unbalance creating a situation in which access to top management positions was seen as impossible by potential talented ...