Just a few years back, who would have thought that the biggest taxi company in the world would own no cars but a software platform to connect its two million contractors with customers? Or that nurses would have to develop digital skills to provide care? And that even high order cognitive jobs such as writers and journalists would be replaced by intelligent machines? Things are changing so fast, it’s difficult to predict what the future of work will look like in the years ahead, but one thing is certain, the talent landscape – the who, where, and how work is done – will never be the same.
Yet many organisations continue to recruit and develop their talent as they always have. They may talk about ‘instilling a talent mindset’, and how HR practices can be used to recruit skills for the future but their definition of talent has not evolved to reflect the needs and complexities of the future of work.
But this is about to change. There is an acute global skills shortage lurking on the horizon and it will leave many companies unable to fill their positions unless they broaden their definition of talent.
We are transitioning into a white-collar workforce as the services industries continue to expand and with the rapid growth in automation, robotics and digitisation there is an increased need for highly skilled staff at all levels. And this is exactly where skills shortages will hit Australia the hardest. A new Korn Kerry study, The Global Talent Crunch, forecasts that in two years organisations in Australia will be facing deficit of 739,000 tertiary educated workers and by 2030 the shortages will have reached 2.2 million. Australia will also have critical shortages in the next level down. By 2020, the shortfall of vocational talent will be 538,000. The gap is expected to deteriorate to 2.1 million by 2030. In this scenario, organisations will struggle to find the people they need if they continue to resort to the same talent pools they always have. It’s time to look at talent with new lenses.
The word talent can mean different things to different people. Recruiters may use the term to refer to the type of candidates they want to hire, put simply, “a good candidate”. HR leaders on the other hand, may label the company’s whole workforce as talent. In most cases, however, the term talent is used to tag ‘top talent’- employees identified as having a special ability or potential. These chosen few are traditionally people that have been assessed and placed in the top right quadrant of the nine-box grid or fit certain success profiles.
This definition of talent is problematic because technology continues to redefine jobs and create positions that didn’t exist. In an evolving world, new jobs will often require skills that have not been hired before. The ‘top talent’ of today may not have the capabilities needed for tomorrow and may not display the same level of performance in future situations. The problem is compounded by the fact that this narrow definition focuses primarily on people who are already doing their current job very well and are ready to move up the leader. It ignores employees with the potential to do those jobs if given the chance and are developed in the right way. When these employees with latent potential are not nurtured, they end up leaving the organisation. With the imminent threat of the talent crunch you cannot afford to lose this talent.
Talent is the people that you need
A more contemporary definition of talent focuses on the type of talent required for the business to meet client needs both now and in the future. And it takes a more long-term, strategic view of talent management. It requires companies to understand where their market is heading, how clients are changing and what skills and roles will be needed to operate in this environment and achieve the company’s goals.
Once organisations are clear on these elements, they can identify which individuals in their workforce are most able to deliver the employee qualities needed in the business and pinpoint where the gaps and skills shortages are emerging. Taking this strategic approach to workforce planning not only helps companies define what talent means to them, it lays out a roadmap to navigate the business through growth and change.
Take the financial sector for example. Market forces are transforming financial services organisations into technology driven businesses and this is having a huge impact on their workforces. Strategic workforce planning is helping a major player rethink how to define talent. NAB, one of the industry’s largest banks in Australia, has reported that they will need to replace 6,000 non-IT roles with 2,000 digital roles by 2020. "What we're doing is we're simplifying the bank," the bank’s CEO said. NAB is automating processes and moving to digital channels, resulting in less people being required. The talent they now need is significantly different from the hitherto skills in traditional banking roles.
The challenge for companies is to identify where the new talent will come from. It could mean that an organisation will end up competing with talent pools from other industries and geographies. NAB for example, is competing with tech firms for sought-after digital capabilities – data scientists, AI, robotics, automation and, technology people.
Where to find the talent you need
If you keep an open mind about talent, the skills and employee qualities your organisation needs can be found in surprising places. In many U.S. tech hubs, software companies are discovering that liberal arts thinking makes them stronger. While engineers are still hot commodity, candidates with unusual backgrounds are gradually changing the makeup of tech organisations. These companies have discovered that having a variety of tech and non-tech talent makes them more successful at connecting with customers and increases creativity.
The key is not to settle for the status quo because the skills that individuals and teams require will continue to develop and change over time. Talent that worked in the past may not be enough to ensure success in the future. Instead of putting narrow boundaries around the definition of talent, organisations should focus on long-term business needs and creating opportunities for people to show how they can contribute to the organisation’s future success.