June 12, 2007 08:00 ET

Talent Crunch Threatens Tech Industry's Ability to Capitalize on Outstanding Growth Prospects-Reveals Deloitte Research

New survey findings indicate Canadian technology and telecommunications companies must rethink their strategies to avoid falling victim in the war for talent

TORONTO, ONTARIO--(Marketwire - June 12, 2007) - Canada's technology and telecommunications companies are faced with unprecedented growth opportunities, at the same time a talent crisis threatens to jeopardize their success, according to new research conducted by Deloitte, with support from the Information Technology Association of Canada.

'TechTalent', a survey of 60 Canadian technology and telecommunications organizations, reveals that developing and retaining talent is cited as the most critical people issue facing technology and telecommunications organizations today. But, alarmingly, only 10% of companies surveyed have talent strategies in place (33% cite themselves as unprepared, 52% are still in the process of preparing).

"Canadian technology companies are poised for great success over the next few years, but must overcome a talent crisis to stay ahead," says Richard Lee, Human Capital Practice Leader with Deloitte. "The key to fueling growth and performance will be effective talent management - knowing how to find, retain and develop the best talent, skills and leadership."

The findings reveal the majority (54%) of companies expect their workforce to grow by at least six percent annually (25% expecting double-digit growth). At the same time, the retirement of Baby Boomers, declining birth rates and increased labour mobility all contribute to why 95% of respondents cite the talent shortage as a fundamental business challenge facing their organizations today. In particular, leadership talent will be at a premium as an ageing workforce results in the loss of 'knowledge workers' - those with leadership positions housing significant knowledge (70% of respondents anticipate a shortage of senior executives and senior leaders over the next three to five years). Developing leadership talent is cited as the most critical talent issue (67%), followed by retention of key talent (48%).

The problem goes beyond a lack of workers - to a lack of workers with the right skills. As the talent pool shrinks, finding critical skills to drive performance and growth will be paramount to success. The research findings reveal research and development skills are the most difficult to find in today's marketplace. In addition, 90% expect to be challenged to find technically skilled talent over the next three to five years, and 60% expect to face a high or moderate shortage of innovative and creative talent. To help reduce the skills-shortage burden, almost 80% of respondents feel employers and educational institutions need to work together to ensure new graduates are better prepared for work in the technology and telecommunications sectors.

Despite acknowledging these talent challenges, the vast majority of Canadian technology and telecommunications companies are confident of finding the right talent. Sixty-eight percent of respondents believe the skills they need to enable future growth are readily available in the labour market. However, the survey findings indicate that industry leaders might not have a clear picture of the talent they need. The majority of respondents (54%) note that demographic changes and pending skills shortages are discussed infrequently at a senior level. Nearly a third (32%) of participants said their organization has not yet defined a list of critical skills for future growth, while another 32% have only just started to do so - but have yet to complete the analysis.

When it comes to managing talent, the majority of companies continue to rely on traditional approaches to 'buying talent'. The survey findings reveal the majority (60%) of respondents plan to increase their investment in recruiting, with 67% rely on financial rewards and incentives as the most common strategy to attract and retain talent. However, numerous studies show that money is only a top priority when it is much too low and that it fails to address the long-term talent issue.

"As technology and telecommunications companies bid on increasingly scarce talent, at some point they will find the talent they need simply isn't available - at any price. While a company must offer competitive salaries and incentives, they must adopt a fresh approach to managing talent," noted, Richard Lee from Deloitte. "Companies that don't act now face a talent crisis down the road. The focus should be threefold - develop the workforce's skills and capabilities, deploy people on work that fits their skills and interests, and connect people with others through meaningful relationships. The first few steps companies must take are to engage in workforce planning, leadership development and succession planning. Ultimately, talent savvy companies will gain a significant competitive advantage in the marketplace over the long-term."

About Deloitte

Deloitte, one of Canada's leading professional services firms, provides audit, tax, consulting, and financial advisory services through more than 6,800 people in 51 offices. Deloitte operates in Quebec as Samson Belair/Deloitte & Touche s.e.n.c.r.l. The firm is dedicated to helping its clients and its people excel. Deloitte is the Canadian member firm of Deloitte Touche Tohmatsu.

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