Narrowing the Talent Gap
How to be a front-runner in the race for talent
As a result of economic growth and increasing projectization, the demand for project managers is expected to soar in the coming decade. At the same time, the collective impact of demographic trends, retirements, and cultural shifts in the workplace, will create a shrinking talent pool that is insufficient to meet demand. PMI and PwC’s latest global research indicates there is a lack of awareness, or perhaps some complacency, among project-based organizations of the risks that lie ahead, and the potential detrimental impact that the talent crisis will have on projects and their ability to meet strategic goals in the future.
This paper highlights what organizations can do to minimize the impact of the crisis. Our research points to actions that make it easier to attract, develop and retain talent, as evidenced by the strategies taken by ‘high-performing’ organizations – those we have called front-runners – who find recruiting project managers less challenging. And we discuss the need to refresh the image of the profession to one where project managers are viewed as strategic partners and changemakers rather than tactical troubleshooters.
Successful projects are a key driver of global economic growth. As more and more industries become projectized, the demand for skilled project managers is expected to soar in the coming decade. But at the same time, aging populations and declining birth rates in many countries are shrinking the size of their workforces. According to PMI’s 2021 Talent Gap: Ten-Year Employment Trends, Costs and Global Implications report, the global economy will need a total of 25 million new project professionals by 2030. To close this gap, 2.3 million people will need to enter project management-oriented employment (PMOE) every year just to keep up with demand.
The talent gap is being exacerbated by the post- pandemic ‘Great Resignation,’1 which has seen workers quitting their jobs in droves all over the world, and it seems that the situation will only get tougher.
Microsoft’s Work Trend Index2 report estimates that over 40% of workers globally are considering quitting or changing professions in the coming year.
The Talent Gap: Facts and Figures
Project management-oriented employment (PMOE)—which includes skilled project managers and those in less formal project management roles, that encompass project management skills—makes up 3% of all global employment, equating to 90 million jobs. This is expected to grow to 3.2% or 102 million jobs by 2030.
By 2030, at least 13 million project managers are expected to have retired creating additional challenges for recruitment.
To close the gap, 25 million new project professionals are needed by 2030.
Source: Project Management Institute. 2021. Talent Gap:Ten-Year Employment Trends, Costs, and Global Implications.(pmi.org)
At the same time, PMI and PwC’s latest global research indicates that talent strategies haven’t changed much. There’s a widespread lack of focus on developing and retaining existing project managers, and a lack of variety and innovation in attracting and recruiting new talent. The core problem, we believe, is that there isn’t a business case for investment in talent—one that explicitly aligns capabilities to organizational strategy and competitive advantage.
The business case should describe how hiring, training, performance, and retention strategies will be aligned to those capabilities; and critically, it should use a data-driven approach to assess capabilities, measure progress, and link that to organizational performance.
Without a systematic approach and a focus on hard numbers, personal traits and behaviors will continue to be viewed as “soft” and risk being undervalued. And unless capabilities-building is recognized and treated as the central enabler of successful strategy execution, organizations will be unable to meet their goals, projects will falter, and the profession as a whole will be unable to avoid the impact of a global talent crisis. Most organizations seem unaware of the crisis, however some, albeit a minority, have begun to take action.
Empathy is often underestimated. In building relationships we should have a connection with our stakeholders and treat them as people—it’s switching to asking how are you doing rather than what are you doing—creating a more open conversation. This kind of empathetic approach, looking at it from a human perspective, is the real skill. You will uncover so much more as a project manager with an empathetic approach.
Head of Infrastructure Projects Delivery and Digital Transformation, Panasonic Asia Pacific
Top 5 Skills/Capabilities of project managers* (in Order of Priority)
- Relationship building
- Collaborative leadership
- Strategic thinking
- Creative problem solving
- Commercial awareness**
Source: PMI and PwC. 2021. PMI and PwC Global Survey on Transformation and Project Management 2021.
*Top five skills of project managers, selected from a list of 16, including power skills, business acumen, and ways of working.
**Defined in the survey as “knowledge of the business, industry and ecosystem, and their implications for projects.”
Geographically, organizations are mainly focusing on where the role is based—four in 10 are recruiting in other parts of the country and just one in eight outside the country. Front-runners are reaching out further to recruit project managers—almost half are recruiting beyond the area local to the role and a quarter recruiting outside the country. Only 38% of organizations—and 45% of front-runners—are embracing flexible staffing models, such as using independent contractors, part-time employees, and temporary employees. And only 50% of organizations—compared to 58% of front-runners—offer flexible working, such as job sharing, remote work, or alternative work schedules. This means they’re excluding many potential candidates, including women, who have struggled during the pandemic to combine work with caregiving responsibilities.
Initiatives to Increase Diversity and Upskill Young People—Some Examples
Localized is an example of an app designed to help connect students and recent graduates with industry experts, employers and other talent hubs in the Middle East. https://www.localized.world
JPM Chase is investing in career education to create pathways to well-paying jobs across the United States. Summer employment opportunities for youth are also providing early work experience.
The Coca-Cola Foundation 5by20 program has provided more than 6 million women across the globe with access to business skills training, mentoring, and financial services or assets.
For the veteran community, mentoring is very important. We know we have skills that are very well aligned from a leadership perspective for project management, but there are gaps in things like tools, methodologies, and managing budgets. The challenge is often that we don’t even know what is out there in industry so we can tailor our experience to find a role. For the veteran community, finding mentors or even additional sources of information, like videos of interviews, where someone explains the day in the life of an agile project manager, construction project manager, etc., would truly enable us to make better decisions.
CEO, HireMilitary & Tenova LLC, which helps U.S. military veterans transition into employment
It’s no wonder that respondents have a litany of complaints, chief among them that training isn’t engaging enough (30%), isn’t of high-enough quality (29%), uses an insufficient variety of learning methods (27%), and takes too long (21%).
Crucially, only 22% of organizations monitor the use and progress of training. This could indicate that 78% don’t know whether L&D programs are actually improving capabilities—and executives have no idea what return they’re getting on investment in these programs, which in turn feeds the lack of strategic prioritization. It also creates no incentive to review and evolve approaches to training, which is why only 23% of organizations do it regularly. In comparison, 45% of front-runners monitor their training programs and 51% regularly review them.
Organizations also need to get creative about harnessing the power of staff who don’t have formal project management training, many of whom are already responsible for bringing lower-risk projects to fruition. Only 13% of respondents say that training these “accidental project managers” is given high priority across the organization—compared to 43% of front-runners.
A Call to Action
The message is clear: talent, projects, and strategic goals are at risk unless organizations invest now in building winning capabilities to gain a competitive advantage.
- Take it to the top: Make talent management a C-suite priority, with clear alignment of capabilities and strategic priorities.
- Follow the numbers: Use a systematic, data-driven approach to assessing key capabilities, identifying gaps. and measuring progress.
- Reinvent recruitment: Get smarter at attracting talent to plug capabilities gaps.
- Elevate your L&D: Invest in fostering critical capabilities, using diverse learning methods.
- Monitor, evaluate, and monitor again: Review and evolve talent strategies in line with feedback, progress, and the changing priorities of the business.
1 The term “Great Resignation” was coined by professor Anthony Klotz to describe the worldwide increase in people voluntarily leaving their jobs from April 2021 onward, supposedly as a result of the impacts of the COVID-19 pandemic and workplace conditions.
2 Microsoft Work Trend Index. 2021. The Next Great Disruption is Hybrid Work—Are We Ready? Microsoft.
3 PwC. 2021. Who Is the Modern Project Manager: Meet the Project Influencer. PwC report.