This article accompanies Perfecting the Hi-Pos.
In about five years, companies will have only half the leaders needed in the right age bracket, compared to 10 years ago, according to research cited by a senior adviser at Egon Zehnder International.
That's a problem, since companies are pinning their hopes on the idea that future leaders in their current high-potential ranks will lead them out of the economic downturn and into prosperity.
According to Claudio Fernandez Araoz, a senior adviser with the Buenos Aires, Argentina-based talent firm and co-author of a Harvard Business Review study entitled, "How to Hang On to Your High Potentials," the coming shortage of management-aged employees is a serious problem worldwide.
"In a global life-sciences company where I spoke, they find that about 50 percent of their managers at the vice-president level or higher will be eligible for retirement within the next two years," Araoz says. "However, only 50 percent of them have a successor ready now or ready in the short term. And, you would not believe what the situation looks like in other countries like Brazil [where], despite healthy demographics, globalization has brought so much investment that they already have a deficit of some 7 million professionals ... [a number] larger than the population of a whole country like Austria."
In the United States and Europe, aging baby boomers are having an equally dramatic impact, he adds. The number of U.S. residents in the 35-to-44-year-old range may have increased by more than 75 percent between 1980 and the year 2000, but that same age demographic has declined by close to 10 percent over the last decade as baby boomers have aged.
The coming trough will occur in 2015, says Jackie Greaner, Atlanta-based North American leader of talent-management consulting at Towers Watson. That means companies would be smart to do workforce-planning analytics, especially where high-potentials are concerned.
"Many organizations have been so lean for the last 20 years and it's been even worse in the last 10 years," Greaner says. "They used to move people around into a variety of roles, but now [the high-potentials] don't want to move or the company isn't interested in moving people around."
That means this smaller group of high-potentials isn't necessarily getting the right job-rotation exposure in some cases, she says.