Dear Valued Visitor,

We have noticed that you are using an ad blocker software.

Although advertisements on the web pages may degrade your experience, our business certainly depends on them and we can only keep providing you high-quality research based articles as long as we can display ads on our pages.

To view this article, you can disable your ad blocker and refresh this page or simply login.

We only allow registered users to use ad blockers. You can sign up for free by clicking here or you can login if you are already a member.

LinkedIn Corp (LNKD), International Business Machines Corp. (IBM): Global Shortage of Talent Equals Opportunity

In the future, there will be a shortage of workforce “talent.” Yes, talent, not employees. There will be many who will want to work, but very few that fit the criteria wanted by CEOs.

LinkedIn Corp (NYSE:LNKD)

The biggest priorities for CEOs currently

Source: PricewaterhouseCoopers

Some 66% of CEOs find that leadership and talent development remain a key priority going forward. Companies are all about the people. Without successful employees, a company at its core cannot run very successfully.

Source: PricewaterhouseCoopers

CEOs also felt that in 43% of instances, the lack of talent had a negative impact on operations. The cost of training and identifying talented employees has gone up more than expected, innovation has been met with difficulty, and to top that off certain market opportunities could not be pursued.

Tom Albanese, the CEO of Rio Tinto plc (ADR) (NYSE:RIO)states:

People of my generation will be retiring over the next 10 years leaving a pretty shallow pool of people; then everyone will be struggling and competing for a limited group of experienced mining professionals. But we do find that we can go outside our sector, for example, for mechanical engineers or people in the auto sector who are good with industrial enterprises.

PricewaterhouseCoopers goes into further detail, stating that:

Theoretically, finding a good candidate to fill a position should now be a very straightforward exercise. There have never been as many educated people in the world, nor has it ever been as simple for employers to tap this vast pool online. The reality is far different. This is the talent crunch; it’s a complex and frustrating challenge and it’s being felt worldwide. 23% of CEOs expect major changes in how they manage talent. The response to talent is more important than the approach to risk.

The main thesis

As savvy investors, we understand that companies are in search of talented people and processes to improve this. Companies are training employees internally, and there will be even further demand for people. The needs for talent acquisition will only increase as a retiring workforce leaves a younger generation of workers who need to rise to the challenge of operating companies.

This is going to be a difficult transition, especially in the United Sates. The baby-boomer generation will be exiting the workforce in droves; approximately 10,000 people will reach retirement age per day over the next 17 years.

Don’t forget big blue

International Business Machines Corp. (NYSE:IBM) will become one of the most important companies in the projected overhang in talent. Many business operations will have to be altered in order to make up for the loss of employees. IBM offers a lot of process-driven solutions through its variety of software programs. The company also offers big-data analytic solutions. Replacing some of the workforce with process-driven innovation will become a larger trend.

IBM is busily diversifying its operations outside of hardware. The company is hoping to generate 90% of its pre-tax income from its services and software segments. The company in its most recent quarter reported 7% growth in business analytics, 25% growth in smart planet technologies, and 70% growth in the cloud. The company’s growth in business services and software is on track, and it’s likely that the company will meet its 2015 road map.

DOWNLOAD FREE REPORT: Warren Buffett's Best Stock Picks

Let Warren Buffett, George Soros, Steve Cohen, and Daniel Loeb WORK FOR YOU.

If you want to beat the low cost index funds by 19 percentage points per year, look no further than our monthly newsletter.In this free report you can find an in-depth analysis of the performance of Warren Buffett's entire historical stock picks. We uncovered Warren Buffett's Best Stock Picks and a way to for Buffett to improve his returns by more than 4 percentage points per year.

Bonus Biotech Stock Pick: You can also find a detailed bonus biotech stock pick that we expect to return more than 50% within 12 months.
Subscribe me to Insider Monkey's Free Daily Newsletter
This is a FREE report from Insider Monkey. Credit Card is NOT required.