Article: The new talent economy: Hype or reality?

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The new talent economy: Hype or reality?

Buzz phrases like ‘skills economy’, ‘dynamic labor pools’, etc. are clearly at the peak of inflated expectations, but what are some of the real talent innovations that are essential to navigate the disruptive changes?
The new talent economy: Hype or reality?

As the year begins, we hear buzzwords galore — how this is going to be the age of disruption and creation of a new talent economy. Surely, there must be some hype in all of that! Let us take a minute to understand this — we will try and use the Gartner’s hype cycle to evaluate where we are with respect to the numerous talent related innovations. The hype cycle starts with the trigger of an innovation, which is followed by the ‘peak of inflated expectations’ and then it quickly falls down to the ‘trough of disillusionment’, after which it picks up with more sobriety and reframing on the ‘slope of enlightenment’ before settling on the ‘plateau of productivity’. If we were to critically look at the various innovations that make up the new disruptive talent economy against this hype cycle, we will have a good idea of what are the real changes in the offing.

It was in 1997 when McKinsey came with the ‘War for Talent’. It’s been two decades since, and a good time to see how the contours of this war for talent have changed. If we look at simple economics, by now we should have had enough talent to meet that heightened demand — and in theory, the war for talent should have been solved by this increasing supply of talent! However, there is more to it as we unpeel the onion.

Yes, we all need to focus on rapid skilling, creating an environment for continuous learning, creating a more agile, diverse and flexible workforce, and getting the best out of the talent we have – but we need to tailor these to our own strategies and shape them for what is right for us, rather than be drawn into all the hype

So what has changed in the environment? I think there are 3 changes that are significant. First, the digital revolution is truly here and is disrupting many industries, probably more so in some industries than in others. For instance, the media and entertainment industry is being disrupted far more as the whole business model is being turned on its head than say, in mining, where it is restricted to more logistics and operations. So what does this disruption do? It creates some new sources of success, and thus some new capabilities have to be built. In industries like IT, this means people have to learn new digital skills and technologies rapidly, on a continuing basis. Second is the accelerating pace of change, and this calls for organizations to be more agile and nimble. From a talent perspective, this means we need more flexible talent, and processes to rapidly upskill talent, with a premium on people who can learn continuously. Finally, the other big change is in the attitudes, wants, and needs of our talent, as we have more young people in the workforce, their desire for purposeful work, flexibility and their ‘2-year job horizon’ would impact how talent systems are designed.

In this context, therefore, what are some of the talent innovations that are essential to navigate the above changes? And where do they stand in the hype cycle? (It would be good to know your views too!)

But before we dive into this, you need to consider your particular industry and organization, and your business strategy and see how you need to craft the elements of the talent strategy to meet your specific objectives. Remember, what you may need in a mining organization would be different from a media organization. Your strategy would dictate what kind of talent innovations you would need to incorporate in your HR practices. Yes, we all need to focus on rapid skilling, creating an environment for continuous learning, creating a more agile, diverse and flexible workforce, and getting the best out of the talent you have – but we need to tailor these to our own strategies and shape them for what is right for us, rather than be drawn into all the hype.

Let’s now look at some of the real innovations, and the buzzwords! Buzz phrases like ‘skills economy’, ‘dynamic labor pools’ etc. are clearly at the peak of inflated expectations. Gig working, I think, is now slowly inching up the slope of enlightenment, and is something organizations can leverage purposefully, but it would vary by industry. This idea extends to being open about all types of talent without being hemmed in by rigid employment contracts. Gamified learning was at the peak of inflated expectations a couple of years ago, but I think we now realize that learning needs to be much more holistically thought-through and integrated with social/peer learning concepts, as well as deliberate practice through labs. Learning is one area where I see lots of action happening — in addition to learning in one’s skill area, there is a focus on getting people to learn new areas, which then leads us to think of how organizations can effectively deploy this new learning. Thus, creating opportunities for people to have flexible career paths through innovations in career development are becoming important. Some of the basics of talent management are being reinforced, for instance, the open talent marketplace. On the other hand, some traditional concepts, for instance of identifying ‘hi-potentials’, are being questioned. The nine-box matrix of performance and potential is being thrown by the wayside by the big organizations. Greater use of real-time performance data in assessing people and more democratic ways of staffing are now in greater use. Therefore, while there is a lot of hype and many hollow buzzwords, there are also many focused innovations that organizations are implementing. But to be successful, you have to see is the right fit for your business and its strategy.

Learning was at the peak of inflated expectations a couple of years ago, but I think we now realize that learning needs to be much more holistically thought-through and integrated with social/peer learning concepts

In summary, how is the ‘war for talent’ changing from what was outlined 20 years ago? I can see two big areas — the definition of talent, and the internal processes for continually developing talent. The current definition of talent is much more democratic than the one used earlier which is a more inclusive group, at times without organizational boundaries. The look and feel of internal talent processes have changed — from a very leadership driven ‘talent spotting, discussion and development model’ to a more open system where enabling processes are more important than just a few leaders’ views and efforts. Success in building such fair, open, transparent, talent systems that enable people to continuously keep learning and growing would make the difference to the organization’s success and that’s what will enable them to navigate the new talent and skills economy. 

Topics: #SkillUp, Talent Management

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