Not too long ago, an aspiring young designer from a top-tier school applied for a job with a leading fashion house and was rebuffed. A few years later, after working for a small, nonluxury fashion-design label, he applied again to the name brand house—and clinched the job. What made the difference? This time around, he had developed a portfolio of exciting designs and assembled a beautiful, glossy book to present them, not only displaying great design sensibilities but also demonstrating commitment and determination.

Fashion firms are crying out for top talent. Sure, there is no shortage of young, talented “stylistas” anxious to become the next Tom Ford or Vera Wang. But finding professionals with true creativity who can blend their right-brain talents with the left-brain demands of a range of roles in the increasingly complex fashion business—well, that’s a different story.

The race for top talent will define the next decade for the luxury and fashion industries. A new study by The Boston Consulting Group and the Business of Fashion (BOF) finds that many executives in fashion and luxury, like their peers in other industries, are very concerned about securing talented professionals: 50 percent of respondents believe that they lack access to the best creative talent.

This seems to be an especially pressing concern for smaller independent firms. They worry not only about filling creative roles but also about acquiring the skills needed to support a wide range of functions.

Earlier research by BCG confirms that companies with superior hiring, development, management, and retention practices see clear economic benefits. (See , BCG report, October 2012.) For example, firms that excel in recruiting enjoy revenue growth that is 3.5 times faster than that of other companies. They also demonstrate profit margins that are twice as robust as those of the laggards. (See Exhibit 1.)

Luxury and fashion firms have particular concerns in four main areas: recruiting the best talent, cultivating a strong leadership pipeline, building a compelling employer brand, and leveraging digital technology for HR.

Recruiting the Best Talent. Many of the industry’s leaders realize that they have to do more to attract the best employees. The joint study confirms that recruiting challenges persist across the full spectrum of creative and business roles. It also shows that the most difficult jobs to fill are in design and product, followed closely by technology and digital. (See Exhibit 2.) The research highlights specific challenges in each area:

• Design and Product. Top-notch creative directors are particularly scarce: 67 percent of the respondents in our survey said that these professionals are impossible or very difficult to find. The hunt for designers doesn’t fare much better: 44 percent report similar challenges. Technical design also offers a meager pool of talent: 42 percent of those surveyed said that pattern makers are in very short supply. And about one-third of luxury and fashion firms have trouble attracting accessories designers.

• Technology and Digital. The hiring hurdles aren’t much lower for database managers, Web developers, and other technology and digital positions—roles that have generally occupied the back office of the luxury and fashion business but which, in a digital era, have the potential to make a big difference to a company’s market positioning. One-third of the firms surveyed find it very difficult or impossible to hire an e-commerce manager.

It is also becoming more and more difficult to find chief executives and general managers who combine analytical and creative skills; retail, product, and brand expertise; and international experience. Increasingly, the industry’s business leaders are boxed into one function, location, or industry subsector.

Cultivating a Strong Leadership Pipeline. Luxury and fashion firms struggle to cultivate strong leadership pipelines and succession pools for their top executives. Fully 60 percent of those surveyed—from both large and small independent companies—admit to substandard performance in terms of talent management and leadership development.

Interviews and survey findings indicate that many firms are having a tough time gauging the caliber of the talent they currently have—let alone the talent they need. Few of the luxury and fashion firms surveyed have adopted the integrated approach of translating business strategy into HR implications, analyzing current and future demand for talent, and creating career paths that allow high-potential employees to rise through the ranks. By contrast, leading practitioners employ sophisticated tools and processes to understand what skills and capabilities are needed to drive the business, to identify where talent gaps exist today or might occur tomorrow, and to develop plans to close those gaps.

Building a Compelling Employer Brand. Luxury and fashion firms may be masters of their brands—and of product and label branding in general—but those capabilities typically don’t extend to their employer brands. Leading practitioners systematically apply the full suite of brand development tools to attract talent. They ask questions such as the following: What are the best recruiting pools? What is our company’s image, and what do we want it to be? What keeps some people at our firm, and what drives others away?

Leveraging Digital Technology for HR. Digital technology hasn’t fully arrived in the recruiting departments of many luxury and fashion firms. Most of those we surveyed still rely heavily on headhunters and recruiters, and around 40 percent of all new business and creative hires occur through those channels. Most roles are therefore being filled by using old-school methods (in addition to employee referrals). (See Exhibit 3.) Only one in three companies reported using online and social forums to support recruiting efforts—a rate that lags behind those in other industries and falls far below best practice. To be sure, headhunters and recruiters will remain essential for filling many critical leadership roles, but there is abundant opportunity to augment their work with digital approaches.

From a candidate’s perspective, four of the most important recruiting channels are digital: company websites, job portals, online advertising, and social-media pages.