Alan Guarino does not only chair the compensation and human capital committee for The Chefs' Warehouse, a specialty food company. He's also the talent expert in the boardroom.
It's all part of the proactive role Guarino believes boards should be playing in the hunt for the best employee talent. Since The Chefs' Warehouse went public three years ago, the company has begun to put detailed HR analytics in place that allow the board to monitor revenue per employee to get a sense of how productively the workforce is operating and the costs per hire, says Guarino, who is also a vice-chairman in Korn Ferry's CEO and board services practice in New York.
"Many boards still have HR committees sitting under nominating and governance, because most of the focus was on CEO succession," he explains. "And boards need to make human capital a quarterly agenda item, at a minimum."
Guarino co-authored a Korn Ferry study called "The Global Talent Crunch," published in May, that sounds an alarm, about how unready most companies around the world are for the human capital needs of the next two to 12 years.
Korn Ferry estimated the talent gap between future talent supply and demand in 20 major economies in 2020, 2025 and 2030, across three knowledge-intensive sectors: financial and business services; technology, media and telecommunications; and manufacturing. The study found that there could be a shortage of 1.7 million workers in the U.S. financial and business services sector by 2030, resulting in an opportunity cost of nearly $436 billion in annual sector revenue by 2030.
On the one hand, those are average figures that by no means tell the whole story. The greatest shortages will be among highly skilled professionals. Most companies recognize that need, and will pay top salaries for highly qualified people. Then, however, there is the question of supply and demand for mid-skilled and low-skilled employees. Overall, the survey finds that there will be a sizable cohort of less-skilled workers by 2030 as automation and artificial intelligence eliminate many jobs.
Yet rather than considering these employees expendable, says Guarino, "the board should be aware of how the company is going to repurpose that talent, maybe through training and education, so that they can take advantage of that talent moving up the talent supply chain."
Boards, recommends Guarino, should have a talent expert who makes sure the company is managing its human capital in a way that addresses future needs and mitigates risks that include losing key people and being unprepared for change, as well as reputation damage. He likens the talent expert to the audit expert; he or she should be someone whose career has revolved around talent competency and talent supply chains, most likely from a leadership advisory practice at a major consulting firm, with a master's and/or PhD in organizational...