The "talent wars" of the '90s and the layoffs of the millennium generated tremendous challenges. If you take a close look at the future, you'll see even greater ones ahead.

According to the Bureau of Labor Statistics, the American workforce is shrinking: 6.5 million baby boomers are now eligible for early retirement. This trend will continue as more and more boomers retire and are replaced by a significantly smaller and shrinking pool of 35- to 44-year olds. Add to that some startling figures on retention: More than one third of all administrative support staff voluntarily leave their jobs before their first-year anniversary, reports Saratoga® Institute. Turnover among customer service and sales agents jumped from 61% to 94% in the last year, according to the Mercer Call Center Compensation Survey. With the cost to replace a departing worker averaging one to two times salary, most companies can expect sharp increases in talent spending in the near future, unless they can discover a smarter way to find-and keep-great employees.

Previous talent wars will seem like petty skirmishes compared to the battles ahead in the emerging recruitment landscape. Those lacking smart workforce planning and talent management strategies will suffer the most, investing heavily in a constantly churning talent pool with less than satisfactory return on their investment.

How can employers better manage employment costs and retain valuable employees?
How do they deploy limited resources to meet all their needs? How do they make sure they have the right workforce when they need it (and not when they don't)? How do they ensure their workforce has the right technology-as well as the training to use it properly? How do they guarantee that their customers will have the best possible experience when they call in?

The answer may be in finding a way to have the best workforce possible without actually having to hire, train or manage it on their own. The key to that is to partner with an expert in workforce management. When a business process is outsourced to a partner whose core competency is in recruiting, training and managing the most efficient, most motivated, most productive workforce, there's an opportunity to make the workforce a strategic asset and not just an overhead expense.

When a higher percentage of the overall workforce is outsourced , a business can:

- Increase predictability of earnings by shifting fixed costs to variable.
- Improve performance by redirecting internal resources to more strategic activities.
- Enhance productivity by more closely matching workforce to workload.
- Strengthen employee commitment by protecting the core workforce from the consequences of economic downturns and shifting supply/demand cycles-from salary freezes and cuts to downsizing and realignment.
- Build profitability by sharing employment costs and risks with an outside expert.

As the workforce continues to shrink and skilled employees grow scarcer, a more flexible workforce structure can give employers a real competitive advantage in terms of employee commitment, retention and turnover costs.

As always, there will be businesses that stick to the tried and true traditional tactics and weaponry to wage their fight for talent. Those that choose not to manage their workforce more strategically may win a few skirmishes, but lose ground in a war that no longer responds to conventional solutions.

By integrating greater flexibility throughout the employment structure, a company expands its options. By sharing management duties with an outsourcing partner, it can build a workforce that can readily adjust to economic and industry fluctuations-driving growth at all times.

Peter Bourke serves as president of Spherion Outsourcing, a business group of Spherion Corporation. Founded in 1946, with operations in North America, Europe and Asia/Pacific, Spherion provides recruitment, technology and outsourcing services. Bourke's background, which is in sales leadership, marketing and operational management, ranges over 20 years, with key roles at Accenture®, IBM, NYNEX and First Financial Management.
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