In HR circles, the conversation around the new economy typically focuses on how talent management can best respond to and anticipate economic conditions. What is less commonly discussed, however, is how talent management can act as the engine of the new economy itself.
“To win in the marketplace, you must first win in the workplace.”
— Douglas Conant, former CEO of the Campbell Soup Company
Talent management is far from a monolithic concept. From elements such as talent acquisition and L&D to workforce planning and succession management, navigating the vagaries of talent management depends on sharing a strategic vision across an organisation.
When deployed effectively, talent management improves productivity, consolidates company culture and helps to drive sustainable business growth in times of wholesale political, economic, demographic and technological change.
But what does effective talent management look like? Ask any HR expert, and they’ll likely give you an answer similar to this: attracting and retaining a pool of talented, engaged, motivated and agile people through robust company processes and an inclusive culture.
When people are engaged and motivated, they are more productive. And productivity is the crux on which a business sinks or swims.
As we enter the 2020s, talent management could prove vital to the new economy. The economy of the future will continue to be driven by technological innovation, and the increasing augmentation of man and machine.
By harnessing the latest developments in tech and artificial intelligence (AI), talent management can be at the forefront of the augmented future.
Talent in the age of uncertainty
Despite visible progress in how big business approaches people strategy, businesses have been slow to adapt their talent management strategies to the irrevocable changes that underpin the new economy of the Fourth Industrial Revolution.
This brave new world represents a double-edged sword. While robots are poised to replace millions of jobs globally by 2030 and exacerbate the widening skills gap, automation is also set to boost jobs in other sectors and stimulate overall economic growth.
The outlook is not completely ambiguous, however. For the foreseeable future, knowledge workers with a sufficient skill set are in short supply. The war for talent is showing no signs of slowing down.
In such a mercurial climate, it’s important for leaders to fine-tune their organisation’s talent management strategy. Instead of being reactive to prevailing macroeconomic conditions and merely looking to survive, a proactive approach can help attract and retain the best and brightest, regardless of industry or sector.
It may be a moot point, but people still drive business. By making a long-term investment in people, businesses can help equalise the global talent pool, increase the prevalence of key skills, and create a more diversified economy.
At Guidant Global, we understand this. Our business strategy is centred around our people — People. Lead. Growth. Without a people-led strategy, we know that our business is unlikely to reach its fullest potential this decade. If other businesses want to be successful in the coming years, following in our footsteps is vital.
Addressing the problems
Average commute times are getting longer. In the United States, the average commute is now 27 minutes — up two minutes from a decade ago. Given that researchers found that adding 20 minutes to a commute is equivalent to a 19% pay cut for job satisfaction, this trend is likely to have a negative impact on productivity levels.
Equally as damaging for the economy is that 70% of employees are not fully engaged. When people are disengaged, they are more likely to seek pastures new. In the US, $11 billion is lost annually due to employee turnover. The fact that employee engagement programmes are not present in every business is alarming: according to Dale Carnegie Training, companies with engaged employees outperform those without by 202%.
In a labour market dominated by Millennials and Gen Z, employee engagement could literally make or break a business. Both generations prioritise flexibility and belonging above money, and are drawn to companies that demonstrate social responsibility. Effective talent management should reflect these wider trends.
Performance management is another area of talent management that is often lagging behind the times. By piling the pressure on managers and putting employees on the spot, archaic appraisal processes that focus on past performance are contributing to high turnover rates — according to Deloitte, 80% of people are dissatisfied with appraisals.
Meanwhile, on a macroeconomic scale, the skills gap between the haves and the have-nots is widening — causing both HR departments and governments to go into crisis management mode.
Worldwide, 40% of employers are struggling to fill vacant positions. The negative effects of this are twofold: innovation and growth are stifled, while a huge chunk of the population is at risk of being left behind.
As Guidant Global CEO, Simon Blockley explored in a recent blog , however, talent management can go some way to alleviate this problem.
Through upskilling existing employees, encouraging multigenerational collaboration within a business, and educating the next generation of the workforce through community outreach programmes in schools and colleges, businesses can help to equalise the jobs market.
Moreover, businesses can build a robust, cost-effective and future-focused talent pipeline by leveraging tech to augment internal and external people processes. When the deployment of AI is aligned with talent management strategy, HR departments can cut out needless admin tasks and get on with the real purpose of their job: attracting, engaging and retaining talent.
Out with the old, in with the new
Both economic stability and economic growth hinge on a healthy jobs market, and our industry has, in most cases, endeavoured to place the right people into the right jobs. But with globalisation and rapid technological change rendering traditional approaches to talent management redundant, building a sustainable workforce is more complex than ever.
The workforce is any company’s most valuable asset. Talent management should be geared towards giving people want they want from work. People want to know why they are at a company. They strive for purpose and yearn for meaningful work . This is why leadership will prove vital in the coming years.
As Microsoft’s Chief People Officer, Kathleen Hogan, recently told Forbes:
“[The] ability to connect our own purpose to the mission sustains us... While strategy will evolve, your culture and sense of purpose should be long-lasting. Culture paired with a purpose-driven mission allows your employees to use your company platform to realise their own aspirations and passions.”
People strategy has never been more crucial to a business’ existence, and effective talent management is underpinned by a combination of culture and mission. Employees need to be satisfied with the day-to-day of their jobs, but they also need a purpose to work towards.
Of course, allocating valuable funds towards HR may feel like a risky manoeuvre for some companies — particularly in highly competitive markets. But when effective talent management strategies are rolled out across the board, the global talent pool gains vital skills, becomes more engaged and improves productivity.
In such an interconnected world, talent management is integral to a thriving global business ecosystem. By building a highly-skilled, highly-engaged labour force, businesses can pool together their resources to uncover new opportunities and even address the biggest issues of our time: namely global hunger, poverty and climate change.
Investing in a more strategic form of talent management is a no-brainer for any business leader. On an organisational level, the benefits of strategic talent management are manifold:
- Increased productivity
- A competitive edge
- A more engaged, united workforce
- The ability to attract and retain the best talent
- Enhanced employer brand
- Increased turnover and profits
On a macroeconomic level, these benefits multiply. As complex business ecosystems emerge in the increasingly interconnected world of the Internet of Things (IoT), so too does the need for a more collaborative approach to doing business.
In this landscape, the benefits of an effective talent management strategy experienced at one business cascade onto partners, clients and customers — acting as a boon to innovation and economic growth.
The 2020s can be a time of hope rather than pessimism. Through the widespread adoption of tech-driven talent management systems that place people at the front and centre of business strategy, business leaders can facilitate positive social change and act as standard-bearers for a bold new economy.