Talent shortage: Pakistan’s competitive disadvantage

LAHORE: Pakistan’s economic growth is hampered by a chronic shortage of skilled talent. Despite the availability of talent within the country, issues such as brain drain, inadequate investment in education, and limited professional development opportunities hinder its potential.

Talented employees are instrumental in driving innovation, improving efficiency, and enhancing customer satisfaction. Their ability to problem-solve, lead teams and adapt to changing environments is crucial for organizational success. Companies with high-calibre talent often experience stronger financial performance, higher employee engagement and improved competitiveness.

Successful companies worldwide employ targeted recruitment strategies, including headhunting and employee referral programmes. Leveraging social media platforms and attending industry events helps attract top talent. However, these practices are less common in Pakistan. Few multinational companies operating here effectively promote themselves as desirable workplaces through strong employer branding, highlighting corporate values, work-life balance and career development opportunities. Moreover, collaboration with universities and colleges to tap into fresh talent is rare in the country.

In Pakistan, there is a greater emphasis on managing corporate finance than talent. While finance management focuses on tangible metrics like profitability and cash flow, talent management involves intangible factors such as employee engagement, leadership development, career progression and emotional intelligence. Successful companies invest in learning and development, provide mentorship and create growth opportunities for employees. Talent management also requires understanding individual motivators and ensuring alignment with company goals, unlike the purely quantitative nature of finance management.

Retaining talented employees is crucial after investing in their development. If employees leave after significant investment, companies lose both time and resources, often leading to operational disruptions. High retention rates also enhance a company’s reputation as a stable and desirable employer. Both market-based salaries and a positive corporate culture are essential for retaining talent. While competitive salaries attract talent, a positive culture plays a crucial role in retaining them. Talented employees often prioritize work environments where they feel valued, supported, and have opportunities for growth. A strong culture can act as a non-financial incentive, improving employee loyalty. Unfortunately, these factors often do not go hand in hand in Pakistani businesses. The prevalent ‘seth culture’ often prioritizes high salaries over fostering a positive company culture.

Companies with talented employees worldwide often outperform those that rely solely on traditional corporate governance. These organizations tend to be more agile, innovative and efficient. A skilled workforce can identify new business opportunities, solve complex problems faster and enhance customer experiences, contributing to sustained competitive advantages.

Countries with high education standards, innovation hubs, and strong corporate ecosystems tend to attract and retain highly talented employees. Nations like the US, Germany, Switzerland and Singapore are often leaders in this area. India is a global hub for skilled talent, especially in IT, engineering and business management. Bangladesh, while still developing, has growing talent, particularly in textiles and tech, but faces similar challenges as Pakistan in nurturing and retaining talent.

To motivate employees and increase their competencies, companies can implement performance management systems, reward systems, and training programs. Performance appraisals linked to measurable goals, training opportunities that enhance skills, and rewards for outstanding performance can drive employees to improve. Structured career development paths and continuous feedback also play a role in motivating employees to take ownership of their professional growth.

It is in the best interest of Pakistani enterprises to foster meritocracy and engagement throughout the company, particularly with top talent. While nurturing talent, leaders should involve not only the HR team but also other departments in meaningful and regular people development initiatives.