Preparing for the Future of Work: Challenges and Opportunities for Talent Management Strategy

We live in exciting times. A year ago, few of us were thinking about AI prompts, a robust language model for both mundane and creative tasks, or becoming a prompt engineer and librarian (yes, that’s a real job). Companies have been struggling with skills shortages for some time, and now, with the rise of digitalization, the shortage is even more acute. A McKinsey survey found that 87% of companies are currently experiencing or expect to experience some kind of skill shortage.

While many survey respondents say their companies are addressing skills shortages as a priority, most admit that their companies lack the insight and knowledge to equip workers with the skills they need most. In fact, only a third of respondents say their companies are prepared to address workforce shortages due to market trends and technological advances.

Business leaders in the Future of Jobs report estimate that 50% of all workers will need to be retrained by 2025. It is also expected that up to 40% of current core skills will change. With the future becoming increasingly unpredictable, as recent “black swan” events have shown, the whole topic of “talent” is becoming crucial.

Recruitment of the workforce of the past

Despite the urgent need to prepare for the future, many HR tools remain inflexible. Job descriptions reflect immediate needs and do not take into account the inevitable evolution of skills. The skills required often change to some extent by the time an organization fills a position. By relying on static job descriptions rather than reflecting evolving skill requirements, companies end up hiring based on outdated needs. This trend is somewhat concerning for HR leaders, as 64% of them do not have a practical strategy for addressing the impact that technology has and will have on skill needs (Gartner, 2020).

In these circumstances, designing a talent development strategy can be challenging. But one thing is clear: talented workers are essential to keep up with industry changes and maintain a competitive advantage.

Who are these talents?

There are many ways to approach the whole topic of talent management. Are all employees with growth potential talented? Are they individuals who go above and beyond the norm and excel in their roles? Are they top-notch professionals with the ability to create and innovate, or are they exceptional people workers?

The topic of talent was colorfully discussed in a groundbreaking 1998 McKinsey article, War for Talent. The authors proposed hiring only star graduates from prestigious universities, creating an elite pool of top-notch employees worth developing. The result was generous salaries and rapid promotions regardless of experience. Remember Enron? They followed this strategy too, and we know how it turned out. Focusing only on top performers can be a pretty short-sighted decision.

Everyone has potential, the question is which talents and types of potential the company needs to succeed. That’s where the problem lies. Businesses can anticipate the key hard skills needed now and in the future, but new roles are constantly emerging. While it is essential to address expertise, it is unfortunately not enough to cope with a rapidly changing world.

There are many studies that look at the so-called skills of the future and how to manage change. However, some key characteristics of talent are repeated. They are mostly combinations of skills, soft skills and attitudes. Interestingly, all of these talents are related to self-management and collaboration. They do not represent a revolutionary new set of talents, but they seem to be more essential than ever. Moreover, some of these talents are being taken to the next level. For example, when we talk about the ability to learn, it is not only the ability to learn new things or improve on what we already know that is becoming essential, but even the ability to forget what we knew and learn it differently or learn something completely new.

Talent management in disruptive times

Having a talent management strategy in a time of constant change can bring a number of benefits to organizations:

1. Attracting and retaining top talent: A talent management strategy can help companies attract and retain the best employees by providing them with opportunities to grow, develop, and advance within the organization.
2. Developing future leaders: A strategy can help identify and develop high-potential employees who have the skills and abilities to become future leaders of the organization.
3. Improving employee engagement and motivation: Employees feel valued and supported in their careers by providing them with opportunities for learning, development, and career advancement.
4. Improving business agility: A talent management strategy supports employees to be more adaptable and able to respond quickly to changing market conditions, new technologies, and evolving customer needs.
5. Aligning talent management with business objectives: A talent management strategy that is well aligned with an organization’s overall business objectives can ensure that the right talent is available to achieve those goals now and in the future.

Talent management strategies can help organizations overcome the challenges of a constantly changing environment thanks to motivated employees who adapt quickly and cope well with disruptive environments.

Dealing with complexity

Talent management strategies have traditionally focused on gaining competitive advantage for the company rather than the employee experience as an internal customer, leaving it somewhat unclear who the true customer of HR is. Many employees, especially millennials, have felt that the perceived balance has shifted in favor of the employer. Progressive HR is addressing this issue with a new focus on agility, customized solutions, and decentralization. They recognize the need to deal with change and complexity rather than maintaining the status quo, and they are developing organizational agility to address new challenges arising from market shifts.

The reinvented approach proposes creative and tailored solutions for employees regardless of their employment status, and uses “design thinking” approaches to create a meaningful employee experience. It is based on a willingness to experiment and test new solutions that meet the needs of all stakeholders, even if this means breaking with traditional HR policies and practices. Such talent management focuses on the intersection of the needs and expectations of the organization, the employee, and the customer with the aim of creating sustainable HR solutions (Claus, 2019).

Summary

In today’s fast-paced business environment, the need for talent has become more vital than ever. Organizations are struggling to cope with skills shortages caused by technological advancements and market trends. Reskilling and upskilling have become key concepts in many corporate strategies and the cause of headaches for most HR managers.

As the hard skills of the future seem more uncertain than ever, the solution likely lies in a combination of soft competencies, skills, and attitudes associated with self-management and collaboration. A Talent Management strategy closely aligned with the organization’s overall business goals can help companies meet the challenges of an ever-changing business environment and build a strong, motivated, and adaptable workforce that can drive business success. The approach to Talent Management needs to change and design tailored solutions that are agile, deal with change, and deal with complexity instead of maintaining the status quo.