It is on! CEOs around the world are saying that the availability of skills are the biggest threat to their business. In a recent report by PwC, the accountants politely convey that 77% of the CEOs indicated that the skills shortage in the market is a large concern. Of course, the usual suspects like innovation and digital transformation were up there too, but the war on talent is a key agenda item. We would argue that fixing the talent shortage is an imperative as it is creating an existential threat that stifles innovation and progress for companies.
Organisations are adopting activities to combat these challenges. From starting bonus to, flexible work package and increasing salaries. However, they may not cut the mustard. They can be categorised as part of inflationary pressures that are created in the short term and driving the price of labour up. Tackling the talent shortage requires a different pace of music. It requires a more strategic and long-term approach. Shortages of talent in the market have been around for a while and are here to stay until at least the end of the current decade. In 2017, the McKinsey Global institute estimated that as many as 375 million people (14 percent of the global workforce) would have to switch occupations or acquire new skills by 2030 because of automation and artificial intelligence. Without a doubt a big number. ManPowerGroup shared a study outlining that 69% of employers are having issues filling jobs. Technology related roles continue to be in high demand. A similar result was echoed by McKinsey.
Complex workforce decisions require deep insights on the situation allowing organisations to respond to new latent realities. This goes from identifying skill needs to acquiring diverse talent. The one who does this best will secure a competitive advantage. There are some critical questions organisations should ask themselves to attain this competitive advantage:
- What does my current workforce population look like?
- What is the next wave of emerging and new skills?
- How can we remain agile as skills constantly evolve?
- What are the exact needs?
- How is my employer brand perceived?
This is just a grasp of questions organisations need to find an answer to. As companies are experiencing a talent shortage it is interesting to have a closer look at what strategic imperative they should be adopting.
What are companies doing about it?
There are several talent management practices that can help steer organisations through new ways of working and a post pandemic era. It is building on preexisting trends in five areas of talent management that are part of the CHRO playbook and include: finding and hiring the right people, learning and growing, managing and rewarding performance, tailoring the employee experience, and optimizing workforce planning and strategy. CHROs should take action on those five levers and craft a strong and durable talent strategy for the postpandemic world.
A key element for companies is to ask themselves what capabilities I should be investing in. As such, a skill or competency-based approach to workforce planning is an important first step. It allows a company to put themselves in a position to win by analysing workforce data and define a possible skills gap. Spanish based company The Wise Seeker provides such AI powered platform to help companies identify skills gaps and strengths and weaknesses of an organisations’ workforce.
Although this would be an important first step, we would like to think that we have all the tools and innovations available to unleash human potential. We have the means to reskill and upskill individuals in unprecedented numbers. But we still see missed opportunity in labour markets to bring people that miss out on playing a role in the digital economy into a workforce where there is a shortage of talent.
Missing link: a fundamentally different view on talent development
Rome wasn’t built in a day, and neither is a companies’ talent pool. A long-term strategy to talent development must therefore be adopted and encapsulate a sustainable and social approach incorporating doing good for people and planet. Sustainability impacts all aspects of conducting business and we believe it is a key driver for transformation. Combating this issue requires organisations to shift from competing on talent to creating talent. Although it is expected that technology-driven job creation will still outpace job destruction through the rise of artificial intelligence for at least another five years, we must balance out the creating talent proposition with intelligent foresight towards sustainable job creation. This means, the focus should be on jobs that are going to be around for a while and will not disappear when automation of process takes over from humans whilst striking a balance with widening the pool of talent. This can be done in two ways; re-skilling of existing employees and re-skilling people that are not part of the workforce. Both need to be informed by future capabilities that are required to deliver value to a particular market. However, the shortage of skills requires organisations to broaden the pool of talent in absolute numbers. Perhaps the analogy of a cycling team is a good one where the domestiques do the simple, mundane tasks like carrying the water bottles from the back of the peloton to the front where their leaders need to make the difference. We need to have more domestiques at the bottom of the talent pyramid to ensure the work gets done in companies. Domestiques also rise through the ranks overtime, but this takes time, a lot of training and dedication. New leadership comes with experience. Such an approach creates new opportunity for people that are not in the digital economy and may be left behind. And there are plenty of those around. So here is a crazy idea – stop competing for talent and let’s create talent.
Making a shift to creating talent
Shifting to a creating talent proposition sounds simple but requires a lot of heavy lifting. At Utopya we believe that supporting talent that is not taking part in this digital economy requires a tremendous level of collaboration between public and private institutions. It is about ensuring nations adopt an equitable approach towards capability building and enhancing access to such services meeting the lowest common denominator. It can only work when scale is achieved as the goal is not only to fulfil the shortage of talent, or create a distinctive digital capability at a national level, but moreover provide hope to those in need. Establishing such coalitions is critical as all parties have an interest in solving this problem but they are not able to do this by themselves. At a meta level it allows governments to build a future proof capability at a national level competing successfully for talent in years to come. Governments need to adopt public-private partnerships and take a more venturing approach to solving these big issues. Failure is ok if we are transparent about it, learn and do it better next time around.
We believe there are 5 key outcomes to be gained:
- Hope and a resilient nation
- Reducing unemployment
- Increase total number of taxpayers
- Shortening the shortage for companies
- Building a distinctive digital capability for the long term
There is an opportunity for governments to take a lead and orchestrating role. There is an opportunity to develop economically by giving those in need of work, or those that are left behind an opportunity to reskill and get a job in an industry that is advancing throughout the next few decades. It is ill considered when we hear there is a war on talent going on whilst we know it is not because a lack of people. Let’s give them and their families hope and a chance to flourish.
