The war for management talent is intensifying dramatically. Last year, McKinsey updated a 1997 study in which researchers surveyed 6,900 managers (including 4,500 senior managers and corporate officers) at 56 large and midsize US companies. The update found that 89 percent of those surveyed thought it is more difficult to attract talented people now than it was three years ago, and 90 percent thought it is now more difficult to retain them. Just 7 percent of the survey's respondents strongly agreed that their companies had enough talented managers to pursue all or most promising business opportunities.
Demographic and social changes have played a growing role in this trend. In the United States and most other developed nations, the supply of 35- to 44-year-olds is shrinking. And many of the best-trained people entering the workforce are not bound for large traditional companies: last year, a full 30 percent of MBAs in the United States preferred to work for a start-up or a small business.1 And the proportion of computer science and electrical-engineering graduates who went to smaller companies rather than more established ones has risen to 37 percent, from 22 percent in the 1980s.2
The update also found...