Economy, Business And Markets

An Impending Talent Crisis

An Impending Talent CrisisAn Impending Talent Crisis

I magine that Iran and the P5+1 – the US, Britain, France, Russia, China and Germany – have come to an agreement on Tehran’s nuclear energy program. What would happen if that day comes, let’s say by July 1, set as a self-imposed deadline for a comprehensive and permanent deal that would give Iran complete access to the international banking system and give foreign corporations unfettered access to Iran’s 80-million market? And, how could we as a business community prepare ourselves for something, which has managed to evade most people’s radars: our human resources crisis?

If that day comes, when Iran and world powers finally settle their outstanding disagreements on a host of issues, then how could we as collective group of businesses prepare ourselves for this barrage of foreign companies about to arrive on our shores.

It’s well known that foreign headhunters, when entering new territory look for competent local managers who have experience, knowledge and acumen. And the same would be true for Iran, as the largest “untapped market” or as one keynote speaker last year to Iran’s EU-Iran Forum put it “Turkey on Steroids.” Foreign corporations are already preparing the ground for their entry into this market.

But have Iran’s CEOs and boards of directors acknowledged that soon, in the not too distant future, that they are all likely to have a serious employee retention problem when foreign companies enter?  Do they understand that once their top level middle management receive offers from European or US companies they are likely to abandon ship at a moment’s notice? I have my serious doubts.

It is unlikely that many, if any companies, have employee retention-programs. A report in Entrepreneur magazine from 2013 reported on a shocking statistic:  more than 50% of US employers polled said they had no formal strategy for employee retention. If American employers have little or no planning, it’s doubtful that Iran does considering the immense pressure managers are under.

A Canadian study from 2008 states “workplaces that demonstrate the value they place in their employees and that put into place policies and practices that reflect effective retention practices will benefit, in turn, from worker commitment and productivity.”

The survey also found that piecemeal offers of salary increases and benefits packages are on the whole a waste of time and resources, when staff is looking to leave a workplace.

In fact, the report goes on to state that “creative strategies that go beyond pay and benefits can be employed to attract and retain employees” just as effectively as the costly raises and benefit offers.

Employers must be flexible about any impending shock to their overall company from the loss in management; they also need to be more accommodating if they are not going to have a “run on their company.”

If foreign organizations bring their management techniques to Iran, local companies may seem antiquated.

Recognition, flexible work arrangements, work-life balance, employee engagement, health and safety, communication, workplace diversity, formal wellness programs, inclusion and employee development are some examples of approaches that can become a part of the mix when developing retention strategies.

It’s no secret that Iran’s brain drain has already seriously damaged the economic recovery. The World Bank put the economic cost of Iran’s brain drain at $50 billion in 2010. Although this report is just over five years old, the intervening economic crisis is likely to have added to the overall cost to the economy. If foreign companies enter the Iranian market, it is more than likely that the “internal” brain drain from local -- to foreign owned companies may just have as big of an impact.