Reducing Human Capital Risk in a global war for talent (PDF)

Amsterdam in 1997, the European Union enabled and enforced the exchange of labor resources between its countries, although there are still some restrictions recently, especially for the new member states like Poland and Czech Republic. Besides that, national governments in the EU such as France and Germany lowered visa regulation for foreign experts. It could be expected that considering 43.000 open jobs in the Information Technology sector in Germany for instance, these endeavors are going to be intensified.
The world’s biggest economy, the Unites States of America, has a strong immigration record with a constant level of college graduates. The talent shortage is not as dramatic as in the European countries. However, the upcoming retirement of a high amount of employees out of the baby-boomer generation means a significant loss of knowledge. China and India, as the countries with the world’s two largest populations, increased their amount of university degrees intensively within the last decade (see also Figure 2). But besides the raw numbers, due to cultural limitations and differences in quality of education, only 12 percent of university graduates or an equal of 3.9 million are considered suitable and available for multinational companies within developing countries. These numbers do not only limit public concerns of uncapped outsourcing of domestic jobs to low wage countries, it also clarifies that high skilled resources from abroad are limited since only a fraction of those available and suitable are willing to relocate abroad.
On the other hand, there are strong activities of the developing countries to retain and regain their well educated workers. Scholarship for returnees, the „hundreds talents program” and a recruiting office in the Silicon Valley are only a few activities of China’s Government to re-recruit its talent. As a result, the number of Chinese students who studied abroad returning to China increased from 14.48% in 2001 to 31,34% in 2006.
India also makes it as easy as possible for Indians living abroad to return home by special „visa of Indian origin”. A survey of Indian executives living in the United States of America numbered „68% looking for opportunities to return“ while „12% had already decided to do so”.
„The South African Network of Skills Abroad (SANSA)” has a database that matches domestic skill shortages with expatriates' profiles providing these skills in order to allow South African companies to attract these lost talents to relocate (see Figure 2: Graduates in China, Chinese students abroad and students returning to china, Figure 3: Global Talent Shortage - Percentage of employers having difficulties finding adequate staff for open jobs).
There is a global shortage of talent and a competition between economies and companies all expected to increase within the upcoming years. Recent studies have shown, that in average 41% of employers worldwide are expecting problems recruiting adequate staff for their open positions 2007 – see also Figure 3.