Global War for Talent in a Recession!

There’s a war going on right but do you know which side you are on? It’s not your ordinary war either so you can forget about sergeants, missiles and choppers and climb out your bunkers. This war is a global corporate and region war. The War for Talent!

According to a yearlong study conducted by McKinsey Co., the most important corporate resource over the next 20 years will be talent. It’s also the resource in shortest supply.

Now it may seem strange to be talking about the War for Talent in the midst of a recession but this recession in the grander scheme of things is likely to be a short term phenomenon and in the long-term in the Oracle IT sector there is still going to be the need for professionals on a large scale.

37% of IT professionals have admitted that once the recession is over they will be seeking a move, so what are current employers doing to make sure that when the recession is over that they will be able to keep hold of their staff?

War for Talent

In an attempt to deal with this problem before it arises, the European Union recently approved the Blue Card program, which is basically the same as the US Green Card System. The Blue Card (named for the colour of the EU’s flag) will allow skilled foreign workers to work and live anywhere in the EU’s 27 member countries.

55% of highly skilled immigrants head for the United States and only 5% to Europe. With the Blue Card, the EU hopes to dramatically change this imbalance.

So the European market is set for increased worker competition and when you combine the Blue Card system with the Intra-company transfer system which allows workers into the country without going through the same checks under immigration rules you can see how the competition for jobs and for talent in the future is going to be critical.

Unfortunately, the Intra-company transfer system has had the side effect of generating a number of dodgy companies from abroad claiming that they are consultancies but in effect are supplying workers in an agency format and paying those workers about 50% of what the standard rate of pay is for the type of work that they are doing. Also these companies will then hold on to a workers work permit restricting their ability to work elsewhere.

In the long-term this piece of legislation would have been beneficial to business as they would’ve still been able to find, “difficult to find”, talent to deliver their projects however with the unforeseen recession upon us the short-term effect is now over competition for jobs which is artificially driving down contractor rates.

This is probably what free trade and free movement of labour is all about and I am sure most Oracle IT professionals know it’s fair game if there’s someone out there who can do the job better then they can for cheaper. But with these companies masquerading as consultancies now supplying Oracle IT workers at stupidly low prices for consultants who only got into the country because of a loop hole in legislation I expect for some professionals this is a bitter pill to swallow.

This is in effect a similar scenario to where you are trying to sell your own car and a thief steals a car that is exactly the same model as your own car and puts their car on the market at half the price of your car. Leaving you with a choice of either to drop the asking price for your car or do not sell your car. This is the exact situation that certain contractors are experiencing here in Europe and especially within the UK.

Narrowing down this issue even more I know of one particular consultancy that is delivering a project to a central government operation in the UK. Now in attempt to drive costs down and maximise their profit margin, they have outsourced the Oracle Financials part of this implementation to another so called consultancy. This so called consultancy has no history of delivering projects but can get their hands on resources and transfer them internally to the UK and will then supply Oracle Financials Functional Consultants for an all inclusive rate of £210 per day. This is at a time when your average Oracle Financials Functional Consultant would normally expect around £500 per day. Even if the current consultants wanted to drop their rate by £200 per day to say £300 per day which many of them wouldn’t. They would still cost £90 per day more and that is even before the agency has included it’s margin. I can assure you this is horrible and has led to many uncomfortable conversations.

Hopefully this gets resolved and the government does something to cover up these loop holes. There are plenty of excellent Oracle professionals all over the world and if things are done right the global war for talent can be a win-win situation for everyone.

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