Manpower was very much an issue at the World Economic Forum in January, where delegates from around the world pointed to a variety of demographic factors that will challenge businesses to find the skilled workers they need. Among those holding forth on the topic were executives from the company that is literally synonymous with the issue, Milwaukee-based Manpower Inc. CFO Michael Van Handel has seen plenty of changes in the labor market since he ascended to the C-suite in 1998, following stints as the company's internal auditor and treasurer, among other roles. Given that he oversees the finance function at a business with 4,400 offices in 73 countries, and that will place more than 4 million people in a variety of temporary, contract, and permanent positions this year alone, he seems the ideal person to comment on the looming "war on talent" and its global implications.
Much has been written about the impending retirement of the baby boomers and the impact that will have on the labor force. Has it been overhyped?
No, it's a real issue for companies because it comes in combination with an increasing demand for many different types of professional workers. We did a survey recently that found that almost 30 percent of companies would have hired additional workers in the preceding six months, if they could have found qualified candidates. We feel it ourselves internally, on the finance side. It's not easy to fill positions.
How long do you see this tight market lasting?
Talent shortages, both in the United States and abroad, will continue for the next several decades. In fact, they will likely get worse as we see the demographic shifts continue to reduce the number of people willing and able to participate in the workforce, not just in the United States but in many other countries.
Seems a good time to be a skilled professional.
Employees are now in the driver's seat in many occupations. Companies that want to retain people are going to have to address career-development issues, almost on an employee-by-employee basis. Employees really want to feel like they're contributing to the company's goals, and at the same time they want a stronger sense of their own career paths.
What has the impact of this talent shortage been on companies?
Our clients tell us all the time, "If I had more people I could take advantage of this opportunity, or I could grow the company faster." One of the biggest shortages is in sales professionals. That's clearly a revenue driver for most companies.
What are some steps companies can take?
Build more flexibility into jobs. If you can accommodate part-time schedules, remote workers, job sharing, and similar nontraditional work arrangements, you stand a better chance of retaining older workers or attracting retirees back into the workforce. It puts additional pressure on managers to oversee such arrangements, but that's part of dealing with the talent crunch. Companies should also involve their human-resources departments in strategy sessions, and invest in training and internal development.
If companies got better at those things, would that be bad news for Manpower?
No, there will always be a need for companies to flex on staffing in others ways, to move skills in and out quickly as needs change. The model has really changed on how companies staff: they are very lean these days and typically don't have enough resources to staff a new project, to cover for people who leave, or to respond to any sort of increase in demand. They now tap external sources for that in order to stay nimble, even if it's just on an interim basis.
And these days Manpower is more likely to tap its own external sources — external to the United States, that is?
The extent of our global operations means that we're on the ground in all emerging labor markets, so we know where the most cost-effective labor can be found, and now technology allows us to access it very effectively. We have a recruiting engine that most companies can't match, so if a company needs financial analysts and we know we have good people in, say, India, we can put them on the assignment. In a sense we provide a way for companies to offshore.
At the same time, Manpower has come far upstream in terms of the kinds of workers it supplies to companies.
Ten years ago, in the case of finance, we supplied bookkeepers. Today we supply tax accountants, controllers, even CFOs. We expect a similar trend to take hold in other professions, including IT, engineering, and sales.
How do you meet your own demand for such people?
One way is with our Internet-based training. We offer more than 4,000 courses in many languages so we can constantly "upskill" workers and put them on new assignments. That's going to be increasingly important.
After joining Manpower in 1989, you went on to hold just about every job in the finance function at the company.
I started out as the director of internal audit, which was a fantastic experience because I got to really understand the business from the ground up. From there I took charge of the international accounting groups, overseeing consolidation and external financial reporting for 27,000 employees in 73 countries. Later, I was treasurer and chief accounting officer. So when the CFO job opened up, I was a good fit.
Manpower's share price has long been seen as a proxy for where the U.S. job market is headed. What's the latest?
It's been moving up for a little more than a year, and it's accelerated in the last four months, from the upper $50s to the mid $70s.