In boardrooms and corporate bunkers across the country, CEOs and senior managers are preparing for a new battle. However, the prize won’t come in the form of greater market share or profits, but rather human talent.

Analysts and pundits alike are recognising that the most important resource a company can have over the next 20 years will be talent. Business people who are sophisticated, globally aware and technologically literate will be in more demand than ever and luring, amusing, challenging and retaining these people will become one of the biggest issues faced by companies in the near future.

The Australian recruitment market, like the local and world economy, has been volatile over the past few years. With mass redundancies commonplace, many employees who may have been tempted to leave their current positions have instead been biding their time. As economies begin to stabilise and expand, the challenge of staff retention will become more evident.

Australia’s aging population will also create pressure with the number of employees in the 35-45 year age group expected to shrink by about 15%. At the same time, economic growth is likely to increase the demand for talented employees by approximately 20-25%. A quick add and subtract shows that with 20-25% more demand and 15% less supply, a significant shortfall of quality employees is likely.

Is the writing on the wall?

Recognising the imminent risk of staff recruitment and retention problems will differentiate proactive companies from their reactive counterparts.

Retention of existing staff needs to become a key priority as many employees often feel trapped in their jobs and have no qualms about leaving if a better offer presents itself. Often it has been found that the best workers are the ones with the worst attitudes and those most likely to be planning a job shift.

The reasons for this can be varied but a lack of challenge or recognition is often the catalyst for employees to quit. Adding to this is the fact that many companies provide recognition and reward schemes that are unbalanced, delivering the same incentives to stars and underachievers alike, and leaving top performers feeling under-appreciated.

Recruitment of new staff will also become a key area for companies involved in a talent war. Recruiters have reported tough competition when searching for candidates in the current market. This has resulted in recruiters and companies alike raiding other companies in an effort to find skilled employees.

Ready your battle plan

In order to hold on to top employees, organisations need to foster a culture of high performance, combining a strong work ethic within an open and trusting environment. Providing star employees with room to grow, to fulfil their potential, and differentiating them from underachievers with greater autonomy, responsibility and rapid advancement, will go a long way to retaining their loyalty and service.

The development of a talent management program is also useful. This often involves mentoring programs where rising stars are paired with senior executives on “stretch assignments” that involve both parties working together on special projects.

Retaining staff is only half the equation in the war for talent. Bolstering recruitment success is just as critical. Generally, top employees are drawn to companies which they perceive have a solid culture and values, as well as being well run and managed. By developing imaginative hiring practices, and conveying these messages, your organisation will have greater success in attracting top people who identify with the cultural ethos of your business.