Impact of Full Time Employment Economy on Workforce, Organization & Economy -By Chandra Shekhar Singh, Director, Posterity Consulting

New Delhi: A full-time employment economy is a country that is defined as one where there is no unemployment and all resources are used 100% efficiently. Economists have long proven that this is a theoretical condition and cannot be achieved. Therefore, high employment with maximum possible efficiency is the desired state. However, in a talent market, it becomes unwise to take into account that high employability is the culmination of many factors – absence of skills gap, available and equally competent talent, lack of competition in compensation awarded etc. We know that, after the great talent war after the pandemic, it is a myth. What is created instead is a highly competitive, employee-driven market in which job creators compete for attention to attract top talent — with exorbitant compensation, bells and whistles in profiles, and sometimes even raiding the talent pool of direct competitors. The economy, under this talent squeeze, performs best in the short term, but if left unchecked the repercussions can take hold and cause problems decades later. An example of this is the US economy, the “War for Talent” although coined in 1997 by Stephen Hankin, remains a very wise reality for economies around the world. The United States tried to mitigate its impending war in the late 2000s by hiring people more aligned with compatible value systems, making systemic changes to accommodate millennials, being vocal about leaders’ expectations, and rewarding employees who meet those expectations. However, by 2020, the war was back to square one. Work-from-anywhere policies, demographic shifts from Millennials to Generation Z, and the global pandemic have all made it difficult for American companies to continue to operate as they have and survive the tech talent crunch. This led to the realization of the necessity of implementing major political reforms to combat the talent war. Therefore, the problem that arises is multifaceted. A highly competitive market not only affects the employer and employee, it has the potential to change a country’s economy and policies. There are three main areas of influence: 1. Economy 2. Employer 3. Individuals Although there are clear negative impacts, there will be positive outcomes from the war as well. Impact of the Talent War on the Economy: At a Glance: Positive, Negative, Innovation and Growth, Labor Market Imbalances, Global Competitiveness, Income Inequality, Skills Development, Brain Drain Economic conditions directly depend on the activities of employers, therefore innovation and growth are not It is inevitable for the economy to spread a talent war. Companies competing for talent often invest in R&D and innovation to stay ahead. This can lead to the creation of new products, services and industries, and promote economic growth and skills development. The talent crisis also opens doors to talent, markets and investors from abroad, which encourages global competitiveness. A highly skilled workforce can enhance a country’s global competitiveness, attract foreign investment and strengthen international trade relations. However, the flip side brings with it its own set of challenges. Competition for talent can cause salaries for skilled workers to rise, leading to a widening gap between the wages of skilled and unskilled workers. This can exacerbate income inequality within society. This also leads to a widespread “brain drain,” where skilled workers migrate to areas with better job opportunities and higher salaries. This can lead to a loss of talent and skills in certain areas, which may hinder economic development. Additionally, in sectors with talent shortages, wages and competition for workers can rise dramatically, leading to inflationary pressures. Conversely, in sectors with an oversupply of talent, wages may stagnate, leading to dissatisfaction among workers. Impact on Employers and Job Creators of the Talent War Impact at a Glance: Positive Negative Innovation Employee Turnover Enhancing Employer Branding Lack of Architectural Choice Increased Productivity The Heart of a Total Rewards Program

Temporary Staffing While innovation and productivity remain the driving force and end result of the talent wars, the happy byproduct is improved employer branding and standing as an employer in the talent marketplace. However, it is axiomatic that a brand is itself a product of people, cultural practices, quality of work, total rewards program, learning and growth opportunities, etc. It also helps when employers are able to not only hire new talent, but retain them as well. Their current workforce. Competition for talent can push companies to improve their working conditions, offer better benefits, and provide opportunities for career advancement, leading to increased employee engagement and productivity. The need to attract and retain skilled workers can drive employers to foster a culture of innovation, leading to the development of new products, services and processes. On the other hand, talent wars can drive up wages and hiring costs, which puts pressure on employer budgets, reduces profit margins and often upends total rewards structures internally. High competition for talent may increase employee turnover as workers are enticed by better offers from competing companies. This often results in employers filling vacant positions quickly as they are motivated by short-term goals and may be employing a band-aid to patch up the wound caused by an employee’s exit or exit often leaving very few options to choose from when this is done. It comes to choosing talent. The impact on employees and job seekers during the talent war The impact at a glance: Positive Negative High salaries and benefits Burnout Opportunities for career advancement Decreased ethics Skill development Inflated compensation

Job Insecurity and Skills Mismatch In the war for talent, the most skilled, talented, and in-demand employees make the decisions, so they often receive higher salaries, better benefits, and more perks as employers compete for their skills and experience. Employers may offer career growth and development opportunities to attract and retain talent, leading to better job opportunities and increased job satisfaction for employees. Employees may have access to more training and development opportunities, allowing them to enhance their skills and advance their careers. But in a developing economy like India, where pay parity remains very high across sectors, there have been clear cases of gray ethical practices that employees may employ. For example, making multiple offers and leveraging one offer against another to raise costs, or refusing to show up for a position and using work-from-home opportunities as a bargaining chip, leaving important projects midway without caring about the repercussions – just because they have a chance. Counteroffer. People are also paying exorbitant amounts, especially in the world of technology, where their experience or skills have not grown in proportion to their compensation – leading employers to have certain expectations – which often leads to feelings of job insecurity or burnout. In conclusion, the talent war can have far-reaching effects on economies, employers and employees alike. While it enhances innovation, productivity, and opportunities for career advancement, it also brings challenges such as income inequality, high corporate costs, and job insecurity. To overcome these complexities, policymakers must strive to develop comprehensive growth strategies that address disparities, promote skills development, and ensure that the benefits of a competitive labor market are shared fairly. Likewise, employers must prioritize talent retention, invest in workforce development, and foster a supportive workplace culture to thrive in an increasingly competitive landscape. Ultimately, by balancing competition and cooperation, societies can harness the potential of the talent war to drive sustainable economic progress and prosperity for all. .

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