Innovation and economic growth require talent. That simple truth is the underlying basis for the historic growth and success of the United States. Despite the current economic downturn, the foundations of a global talent shortage are already in place, and the effects will become more apparent as the economy rebounds.

While U.S. legislators seem to be asleep at the wheel, other countries are taking talent issues much more seriously. Many countries have liberalized their immigration policies for high-skilled talent. That presents a major challenge to America’s historic domination in innovation and attracting high-skill immigrants. Australia, Canada, and New Zealand are the most aggressive. They, correctly, believe that immigrants are a source of economic growth. As such, they have strong pro-immigration policies that value highly skilled immigrants.

For example, the Australian Parliament recently eased immigration laws with the stated goal of attracting more high-skilled labor. This was in recognition of the fact that past and future decreasing birth rates and increasing demand for skills will make skilled labor the quintessential scarce resource for the next fifty years.

Complacency about attracting high-skilled talent can have severely negative consequences. The Bureau of Labor Statistics projects a growth of 40%, or over 500,000 new IT-related jobs through 2016. Domestic supply is simply not enough to cover this need at current levels. The number of degrees granted across all IT-related categories is about 54,000 annually, and is trending downward. Adding to the supply shortage is the fact that the number of workers in the 55-and-older group (the Baby Boomers) will grow by 47% in the next eight years - approximately 5.5 times the 8.5% growth of the labor force overall, with many of them actively planning to retire.

While a disproportionate number of skilled immigrants still come to the U.S., the numbers that are staying in their home countries or are going elsewhere is increasing. Over the last five years, the U.S. attracted an average of 73,000 skilled immigrants annually, down from about 107,000 prior. While a large number, it is not enough to fuel the U.S. workforce demands. To put it into perspective, Canada attracted 56,000, Australia 20,000, and even tiny New Zealand managed to get 10,000.

The U.S. has had a confused approach to immigration and has done little to shift the balance towards attracting high-skilled talent. As a consequence, barely 22% of immigrants are high-skilled workers. Other countries typically seek to have the highly skilled workers comprise 50 percent or more of total permanent immigration. As a reference point, the most recent figure for Australia was 65 percent.

The Myths Surrounding Immigrant Labor

A big reason for lack of progress on changing immigration policies has to do with misinformation and myths surrounding immigrant labor. Special interest groups are motivated to prevent immigration for a number of selfish reasons. This protectionism prevents needed talent from entering the country.

What doesn’t get mentioned is the fact that immigrant workers make up less than 5% of the U.S. high-skilled workforce; in fields like IT, unemployment averages about 3% and wage growth has been consistent at about 3.9%. In fields like architecture and certain types of engineering, unemployment has averaged less than 2%.

These numbers undermine any claims that immigrant workers have negatively impacted employment or wages. The reasons a particular individual, despite being seemingly qualified, is struggling in finding employment is usually not because of a conspiracy among employers - it could be a case of misplaced expectations, a mismatch between the person’s skills and available jobs, an industry downturn, or just an ability to interview well.

For example, there are many extremely talented and highly qualified automotive engineers in Detroit who are out of work. This is not because their jobs were filled by lower-paid immigrants, but rather because their industry is in a tailspin, and they don’t have any other local employment options. The corollary to this example is at the low-end of the workforce where we are currently reinforcing an enormous (and expensive) fence along our border with Mexico to keep out migrant workers who enter the U.S. at great personal risk to do backbreaking and menial work that no Americans are willing to do.

Impact on Students

It isn’t just in attracting high-skilled immigrants that we’re losing out to other countries. The ability of the United States to attract foreign students is also deteriorating. The flow of students declined by about 70,000 per year after 2001, or some 25 percent, and rose elsewhere - in Australia, New Zealand, the U.K., and Canada. And this is likely to worsen as more countries wake up to the issue and decide to enter the fight.

One thing is certain, the U.S. is not the only country that needs talent to grow and innovate. The first order of business is for the U.S. to develop a coherent national policy in regards to talent. We need to develop more of our own via improved professional and skill-trades education, and we need to attract more highly-skilled immigrants.

Next, industry demands for more H-1B visas and green cards should be correlated with actual needs. That way we can be sure these talent gaps will be actively managed and matched by the U.S. government.

Ultimately, U.S. industry needs to face up to the challenge. There are many opportunities to redeploy talent (for example, re-training unemployed automotive engineers to work on green technology). There are also a large number of highly educated and skilled knowledge workers who desire greater flexibility in their work life, and still others who want to work part-time in retirement. There are also rapidly evolving talent-deployment models (like M Squared Consulting) that allow organizations to instantly access targeted expertise on a project basis rather than recruiting for full-time positions.

The chaos in the financial services sector like Lehman Brothers bankruptcy , Merrill Lynch’s dramatic sale to Bank of America and the U.S. government’s rescue of AIG continue to batter executive confidence. And yesterday, we were left to digest the collapse of Washington Mutual (WAMU).

Yet smart executives know that within this market turbulence lays business opportunity.

Economic downturns create more opportunities for companies to move from the middle of the pack into leadership positions than any other time in business.

Unlike up markets where leaders can thrive on raw power alone, and mediocre players can succeed by simply showing up, a down market rewards the skillful and the strategic company. This dynamic often results in dramatic performance differences as leaders power out of the recovery.

One great example from the most recent downturn: Southwest Airlines, which surged ahead of its airline competition during and after the 2001 recession. With a clean balance sheet, a big cost advantage and brilliantly hedged fuel costs, the discount carrier grew at the expense of its rivals. As other airlines eliminated capacity and slashed jobs, Southwest lowered fares to gain market share. It boosted advertising to highlight its price advantage and improved labor relations by avoiding layoffs.

Many industry leaders fall hard during recessions because they assume that a strong market position insures them against trouble. That approach breeds overconfidence. Executives postpone taking the precautions they should. When the downturn hits they usually over-react. They slash costs and staff, cut capital expenditures, squeeze suppliers, stop research, and avoid strategic acquisitions. When market conditions improve, they must then spend heavily to get back on track.

Winners in recessions tend to react quickly heading into a downturn by managing costs carefully and consistently. They focus on what the company does best, reinforcing the core business and spending to gain share. They aggressively monitor the competition to ensure they are well positioned for a recovering market.

Another characteristic of successful companies in a downturn: they make bargain acquisitions to build up their core business and to pick up vital talent. As markets improve, they are well-positioned. The latest example: Bank of America’s planned acquisition of Merrill Lynch, with its 14,000+ financial advisors, which may turn out to be “the strategic opportunity of a lifetime,” in the words of Ken Lewis, Bank of America’s CEO.

In these uncertain economic times many of our clients have realized that they must not only protect their “core” but they must also push the boundaries of their business to capitalize on the eventual recovery. They choose to take a progressive approach to growth and innovation by bringing in outside expertise that allows them to cost-effectively extend the reach of their existing management team. By deploying our independent consultants, companies can get vital work done in tough times without adding to the fixed cost headcount base. These seasoned knowledge workers are savvy business professionals who have extensive experience delivering results for their clients.

It is an age-old tug-of-war that goes on as professional women have children and decide whether they will stay in the workforce or stay home. A recent study suggests that women with MBAs are far more likely to be homemakers than women doctors or lawyers.

Professors Catherine Wolfram and Jane Leber Herr at the University of California at Berkeley followed the career paths of nearly 1,000 women who got advanced Harvard degrees from 1988 to 1991.

Their finding is revealing: Some 28% of the MBA graduates were full-time mothers 15 years later, vs. 21% of the lawyers and 6% of the doctors. One likely reason for the disparity: Many of the doctors and lawyers said they could arrange flexible hours, while “the infrastructure is not there in the business world,” says Elissa Ellis-Sangster, executive director of the Forté Foundation, which encourages female MBA candidacies. (Female enrollment at 25 of the top full-time U.S. MBA programs hovers around 31%, according to the foundation.)

Women MBAs juggling children and career may also have weaker ties to their profession, partly because they have invested less time and money in their schooling than lawyers and doctors do. Finally, says Joan Williams, director of the Center for WorkLife Law at the University of California’s Hastings law school in San Francisco, many women in business school “end up being stay-at-home wives” because they meet and marry ambitious men who want them to manage the family’s life full-time.”

At M Squared Consulting our business model is predicated on utilizing independent project professionals on all our engagements. It is quite simply the best way to insure experience, cultural fit, cost-effectiveness, and results for our clients. From this perspective we believe that our style of management consulting offers a perfect career path for educated and experienced women professionals across all functional areas and industries.

It is vitally important for executives to occasionally take a big step back and survey the business landscape.

If you were to do this today…and you were able to see beyond the current economic turmoil and the financial services industry meltdown…one looming issue you would see in the U.S. workplace is the talent shortage.

As busy executives we must recognize that there will always be urgent and tactical issues to deal with today. The risk is that this distracts from the larger and ultimately strategic issues which can impact business sustainability. Talent is one of those issues.

According to Anna Minto, Partner and leader of the People Advantage Initiative in the Americas at The Boston Consulting Group two things need to happen if the talent challenge is to be successfully met. “First, this needs to be on the CEO agenda, and it often is not or is lower priority. Second, the HR departments are going to need the resources and the support to be able to deliver on all this change that senior executives think they are going to need.”

This sort of strategic thinking is starting to happen in some companies, but the reality is that it is still very early days. A recent BCG survey revealed that only about 20% of companies manage their talent globally today. Half of companies say they plan to do so in the future.

Forward thinking companies are beginning to ask questions like:

• Is the talent shortage on the executive agenda?
• Does the CEO buy into it and will they champion the cause?
• What is our strategy?
• Do we have a plan that we’re executing against?
• What internal resources will do this work?
• Who “owns” it?

For many organizations, a key part of the solution will be to have a solid working relationship with external talent agents (companies like M Squared Consulting) who make it their business to develop and nurture networks of talent. These professional services firms can help frame up a strategy and also provide the required expert talent, exactly when and where it is needed.

Many finance executives still have painful memories of Sarbanes-Oxley, and how they needed to lean on their IT counterparts to decipher and support its requirements on the enterprise. Today’s CFO’s are facing this same challenge again, this time to figure out the financial reporting impacts of International Financial Reporting Standards (IFRS).

As the Securities and Exchange Commission continues down the path of mandating IFRS for all U.S. publicly traded companies, most accounting experts highly recommend that those conversations begin now. IFRS adoption will require changes and updates to corporate IT systems, too.

Some vital questions for the CIO and CFO to ask include: How will running IFRS and GAAP in parallel affect the updating their general ledger and chart of accounts? What metrics need to be added or revised? Should any budgeting and forecasting applications be changed?

Experts agree that it is a good idea for organizations to conduct a high-level review of how their financial statements would change under IFRS. This would allow them to discover major issues, including IT systems, to be resolved before migrating.

The good news is that there is plenty of time to figure this out. The latest SEC roadmap provides most companies with 8 years before they have to generate IFRS financials.

Almost every investor in today’s market is seeing a considerable decline in their retirement assets. Mentally, it makes everyone more conservative, especially those near retirement. To replenish their savings (or defer drawing down their retirement funds) many Baby Boomers will elect to continue working in some fashion. Some will postpone retirement and remain as full-time employees with their current employer. Others will work out part-time or flexible working arrangements. Still others will exit their current employment situation and re-enter the workforce in interim positions or as project professionals.

At M Squared Consulting these workforce trends have a huge impact on our business. We depend on seasoned consultants to staff our projects and deliver results for our clients. Given that the overall talent shortage is going to exist long after this current economic turmoil passes, more companies are going to see the benefits of bringing in targeted expertise to deliver defined project results.

It is no great secret that effective presenters employ a few simple techniques. They tend to:

• Structure their presentations well, without too much detail…
• Make their points clearly…
• Skillfully use visuals and other media to underscore their message…
• Build rapport and connect with the audience…
• Exude a unique and engaging personality…

Common sense? - Yes! It is hard to argue with any of this advice.

Common practice? - Not so much.

Following is a great example of all these elements coming together. What’s most amazing about this short (2 and half minutes on YouTube) presentation? Watch it first, then we’ll talk about it.

A few comments and observations:

• This was a sales pitch for CBS network executives designed to motivate them to pick up the Sesame Street series. The personal connection to the audience is one-to-one. Perry Lafferty, Bob Wood, Lee Currlin…these were all CBS executives that would have a hand in green lighting the show.
• The presentation begins with “in conclusion.” It is always good to begin with the end in mind! In this case literally telling them before you tell them…
• The visuals are great. (Note that this is 10 years before PowerPoint was invented!)
• Very effective use of sound to reinforce the presentation and move it along.
• The comforting attributes of credibility and experience are perfectly interwoven with the ideas of new, different, and progressive.
• The call to action, value proposition, and ROI are crystal clear.
• It’s not about wants. The United States of America, he says, needs this show.
• Even though it’s a sales pitch, with his passion, energy, and enthusiasm, it comes across as being very believable.

So, here we have a blatant sales pitch. Credibly delivered by a puppet. All in all, very effective.

From what I’ve read about Jim Henson (the creator of the Muppets) he was an absolute genius at communications and worked many years to perfect his puppeteering craft. It goes to show that seasoned expertise, intelligently applied, can solve many problems. From entertaining children to selling network television executives!

I’ve written a lot about the evolving demographics of the workforce. The Baby Boomers are just now beginning to retire. Because of the size and age span of this generation (78 million, born between 1946 and 1964) they will still be in the workforce for a number of years. In fact, many of these retiring Boomers will resurface as consultants, interim managers, or part-time workers.

As Generations X and Y assume more senior roles in corporate America sensitivity to generational differences will become a real management hot button.

One lightening rod in the workplace will be comfort level and experience with technology. Many of the older generations don’t readily embrace new technology. This will hurt their employability.

I will be the first to admit that learning a new technology isn’t as easy or intuitive as it is for younger generations. I don’t think my children have ever read an owners manual for any electronic device, Playstation game, or software they’ve owned. They just turn it on and start exploring. Learn by doing.

For Baby Boomers, here’s the point: You have to stay up on technology. You can’t dismiss it as “tactical” or “for kids” regardless of how it is used today in society. Technology has a way of quickly morphing from today’s consumer toy to tomorrow’s business tool.

A recent study by ThirdAge/JWT Boom, captures a glimpse of this challenge for Baby Boomers. It shows that people over age 40 participate heavily in word-of-mouth and value personal recommendations and expert opinions, but they have not embraced social networking or blogs despite being heavy users of other online services.

This is an interesting, and possibly alarming, chart. But it also represents a huge opportunity for every Boomer who embraces its true meaning. You learned to use a personal computer, you mastered Microsoft Office, you can learn today’s hot technologies too. For the Boomer who is contemplating their next career move, having a demonstrated ability to weave technology into their professional identity becomes a key way to standout in a crowd as either an employee or a consultant.

A recent U.S. Department of Labor study shows that the number of people 65 and older who are still in the work force continues to climb.

According to recent Bureau of Labor statistics data, between 1977 and 2007, employment of workers 65 and over increased 101 percent, compared to a smaller increase of 59 percent for total employment, which includes those 16 and older.

Nationwide employment numbers in the 65 and older age bracket have climbed in each of the past 10 years from more than 3.7 million workers in 1998 to more than 5.8 million though June.

The number of employed men 65 and over rose 75 percent, but employment of women 65 and older increased by almost twice as much at 147 percent. While the number of employed people age 75 and over is relatively small (0.8 percent of the employed in 2007), this group had the most dramatic gain, increasing 172 percent between 1977 and 2007.

There are a number of interesting explanations for this data:

• Due to the miracles of modern medicine we are living longer. We are also leading healthier, more active lifestyles which yield more energy as we get older.
• 65 has become the new 55. Just because we hit 65 doesn’t mean our career has to stop, or that we can’t continue to make a valuable contribution based on our lifetime of knowledge and experience.
• The cost of healthcare has become a huge concern for those in retirement (or nearing it). Many people are staying employed, or taking on new opportunities to gain access to company-sponsored plans at more affordable rates.
• Those newly retired are being hit by the tough reality of today’s economy. Many are watching their retirement savings dwindle and want to cover their living expenses without drawing down capital.
• Some haven’t planed as well for retirement as they should have.
• Many Baby Boomers are realizing that they still have much to contribute, and don’t want to lead a sedentary retirement. They are choosing to re-enter the workforce in more flexible arrangements such as consulting projects, or interim assignments.
• Many employers are also realizing that retiring Baby Boomers comprise a big portion of their intellectual capital. By offering flexible working arrangements they can not only harness this knowledge, but help to pass it on to younger generations.

As is always the case, the truth is somewhere in the middle. I think each of these possible explanations is valid, and they all apply situationally. The end result is we’re seeing some incredibly experienced talent staying in the workforce longer, or re-entering from retirement. In the short-term this trend will help to mitigate the talent shortage.

Ultimately, those employers who can offer these senior workers flexible and rewarding work opportunities will benefit. Companies like M Squared have an incredible opportunity to be the talent broker in the middle: finding rewarding opportunities with clients and matching them up with seasoned expertise.

To say there are large generational differences in our workforce is an understatement. The current workforce is unique in history in that we have four unique generations working side-by-side: Silent, Baby Boomer, Generations X and Y. With the Boomers just now starting to retire from the workforce it is becoming even more important to recognize the differences, so that we can adapt our recruiting and management practices to attract and retain the newest workforce entrants.

One clue is to look at the incoming college freshmen. The class of 2012 will have almost 2 million students. Most of them are 18 years old, and will enter the workforce in 4-5 years.

These students have lived their whole lives in a digital world - where GPS has always been available, phones have always had caller ID and tax returns could always be filed online. Most of them are more comfortable communicating via text messages than voice, oftentimes holding multiple conversations at once. They also grew up knowing only Jay Leno as host of “The Tonight Show.”

Those are some of the 60 cultural landmarks identified in the 11^th annual Beloit College Mindset List, a compilation that offers a glimpse into the world of each incoming college freshman class. It is published by Beloit College (a private school of 1,300 near the Wisconsin/Illinois state line).

The school started producing the list in 1998 to remind professors that references familiar to them might draw blank stares from their students. The purpose of the Mindset List goes beyond reminding professors to update their teaching references, it is also hoped that it will prevent students from thinking that the way something is now is the way it’s always been.

“Watergate used to be a common reference,” said Ron Nief, the school’s director of public affairs, who assembles the list. “But a few years ago I asked some students if they knew what Watergate was and they said that was where Monica Lewinsky lived.” Clearly this was a teaching reference that would need to be updated!

The authors very kindly go to great pains to reassure us that it is not deliberately designed to make readers feel really old!

A few others that really struck me:

• Coke and Pepsi have always used recycled plastic bottles.
• Gas stations have never fixed flats, but most serve cappuccino.
• The Warsaw Pact is as hazy for them as the League of Nations was for their parents.
• Clarence Thomas has always sat on the Supreme Court.
• IBM has never made typewriters.
• Iced tea has always come in cans and bottles.
• Michael Milken has always been a philanthropist promoting prostate cancer research.
• There have always been charter schools.

If you’re interested, you can view the full list of 60 items for the class of 2012 (and for prior years) here: http://www.beloit.edu/mindset/2012.php