Leaders need to tap into the human potential that surrounds them – which they’re not seeing
Work has been undergoing multiple metamorphoses over the last few decades. The way we work, where we work, the tools we use – all of these have transformed and continue to transform, thanks to technological and societal advancements. Organizations have responded in kind, adapting their business models, talent management and leadership styles to meet the new demands and new realities of work.
Now, the future of work is shifting once again, triggered by a global pandemic that upended entire businesses and entire industries. Professionals today see the benefit in, and need for, flexible work schedules, hybrid work models, and achieving work-life balance – all of which have been cornerstones of the pandemic-era workplace. But as more people have become fully vaccinated, companies have begun calling their people back to the office, with no option to work remotely, even part of the time. Some organizations may want to snap back to a pre-pandemic normal, but many professionals are not looking to relive that past.
In fact, there is such a disconnect between what talent wants and what companies want, that it has led to a mass exodus of employees. In the United States, workers are leaving their jobs at a historic rate, with nearly 4 million quitting in April 2021 alone, according to the Bureau of Labor Statistics.
Companies can expect this number to increase. Indeed, 82% of 684 professionals surveyed by Korn Ferry in mid-July 2021 said they plan to leave their jobs within the next six months. In that same survey, 31% said they plan to quit even without another job lined up. The number one reason for this great resignation, according to 36% of professionals: the Covid-19 pandemic allowed employees to re-evaluate what they really want out of work.
In addition to this talent supply challenge, organizations are also grappling with a significant shift in the demand for skills and capabilities needed to grow in the future. The massive digital transformation affecting virtually every industry means the talent that got organizations to where they are today is not the talent they will need to get to the next level of growth. According to a recent Korn Ferry survey, less than a third (29%) of HR professionals believe their companies have the right people to lead their organizations into the future.
Together, these significant shifts in both talent demand and supply mean that organizations are now facing a talent shortage, with many struggling to find enough of the right workers to meet their needs. For many of these companies, the skills and capabilities they have today are not the ones they will need tomorrow. If they want to thrive in the future, they will need to shift the way they view talent, especially the talent already in their ranks.
You cannot be what you cannot see
In the past, the ‘war for talent’ was fought in the labour market. Today’s talent crunch, however, is taking place within the borders of large enterprise organizations, as they struggle with succession, mobility, engagement and development. Often, when faced with a talent or skills shortage, organizations will look to the external labour market to fill any gaps. But there is a fundamental supply problem, and companies are being left with a slate of roles they cannot fill. In the US, the number of job openings hit a record high in June 2021, at 10.1 million, according to federal statistics. The number of people available to fill those roles? Less than seven million.
What’s more, many of those available workers are not currently qualified for the jobs on offer. Some roles will remain empty for months, if not years. Ultimately, that is because of organizations’ old habits and old perceptions. Although the world of work is changing, many organizations continue to apply outdated practices to new and novel problems. They continue to view talent management through an old lens.
This is, in part, because there is a lingering perception that people’s tenures at organizations are becoming shorter and shorter – and with reason. Federal data show the median job tenure for wage and salary employees is 4.1 years as of 2020. In turn, organizations are reluctant to invest more into professional development; they believe the return on that investment will be nominal compared to the cost. Indeed, only 55% of HR professionals surveyed by Korn Ferry say they have the necessary programmes and assessments in place to help identify and develop high-potential talent. Even fewer – just 14% – believe they are selecting the right people for these programmes.
To be sure, there is an increasing number of employees who choose to spend two or three years at one job before moving on in search of the next new challenge. But, in addition to these job hoppers, there are other professionals who are loyal and want greater longevity at a company. These employees – who Korn Ferry refers to as “job stayers” – take a new job because they want to learn new skills, further their careers, and increase their earning. And they stay on the job, according to our research on career nomads, not only because of the reputation of the company, but because of the opportunities for advancement (The Principles of Hiring Nomads, 2019).
For a long time, the currency of career conversations was roles and people. Today, it is about skills and capabilities – jobs to be done and experiences to be had. Organizations that do not disrupt their own talent management strategies will continue to struggle to find enough of the right talent to fill the gaps and to keep their existing talent engaged. They will need to shift how they think about talent both inside and outside of their organizations in order to unlock potential and possibilities.
Unlocking potential in talent you have
When you cannot find something on the surface, you have to go one level of abstraction deeper. Business leaders need to ask themselves if they already have high-potential talent in their workforce – those who could be developed into future-ready leaders. They need to shift away from a focus on people and roles, to a skills-and-capabilities mindset.
Without a doubt, all organizations have high-potential talent hiding in plain sight. As Korn Ferry research shows, such people all have essential markers that indicate future success: they are motivated to lead, can learn from experience, have a knack for solving problems, and are ready to tackle derailment risks. These employees have transferable skills, and underlying qualities which mean they can be reskilled and upskilled to meet business needs.
But for companies to tap into the potential of their workforce, they will need to commit to providing the right rewards, training, coaching, development and on-the-job experiences that will empower and enable their employees. Take, for example, Tyson Foods. Because its plants are located in rural communities in the US, with limited talent pools, the multinational food company has had to rely on developing and promoting talent from within. To build the strong, competitive workforce it needed, Tyson launched an on-site education programme in 2016 that provided no-cost job skills training, life-skills training, and workforce certifications to its front-line employees. Similarly, Walmart, the largest private employer in the United States, is now hiring twice as many people as before the pandemic – and three times as many people as during the pandemic – yet it has also reskilled over two million associates since 2015 through its Walmart Academy initiative.
Moving away from the traditional focus on people and roles, to take a deeper look at skills and capabilities, is critical for unleashing people’s potential. To make this shift, HR functions need to disrupt their own talent practices, divesting legacy capabilities and services. They will need to retool their old HR information systems and invest in new talent analytics technologies that can surface skills, capabilities, and individual career aspirations across the organization, matching them with job needs and career opportunities.
Organizations that invest in their people keep those people engaged and committed to their work, which, in turn, allows them to deliver value and impact, transforming the business so that it operates successfully in today’s hyper-demanding, hyper-changing environment.
Think beyond the status quo
The biggest and most successful organizations use their brand, deep pockets and exciting products to attract incredible talent. But in some ways, this can make it even more challenging to foster effective teams, segment talent and meet high expectations.
Organizations should rethink how they approach the external labour market. Instead of looking in the same places or sticking with the status quo of talent, companies can branch out to other industries, and consider ‘non-obvious’ talent pools with transferable skills – rather than pedigree – that can fill in gaps. Consider organizations like Microsoft and Walmart that offer ‘returnship’ programmes to professionals ready to re-enter the labour force after gaps of years or even decades. Or companies like Amazon, which has been hiring from other industries hardest hit by the pandemic – think leisure and hospitality – because of the labour shortages in high-demand retail and distribution jobs. The e-commerce retailer has dedicated over $700 million in training for people across its corporate offices, tech hubs, fulfilment centres, retail stores and transportation network. It is an investment which will help those individuals move into more highly skilled roles, within or outside Amazon.
Roles are becoming increasingly cross-functional. The lines between competitors are continuing to blur. Organizations can no longer afford to put talent, whether internal or external, in a box.
The people you have can become the people you need
By following traditional talent management practices, companies are missing a crucial opportunity: to harness the potential of their people. To thrive in the future of work, business leaders will need to think in terms of ecosystem leadership. Build a healthy system of talent around you, and you will have access to the strongest performers, in and outside of your organization.
This starts with organizations rethinking and transforming their own talent practices. HR teams need to build new analytical capabilities that can surface individual workforce skills and professional goals, and match them with internal skill needs across the business. They also need to create a more transparent talent marketplace inside their organizations to foster career mobility, which can achieve better alignment between skill supply and skill demand.
All of these challenges and changes give HR leaders and functions the chance to elevate their impact on the business and broader society. Today’s generation of leaders have an inherent belief in the importance of people and culture, and the best talent will be drawn to people-related issues, given their prominence and influence.
HR functions need to get out in front of these changes to reinvent themselves and the services they provide, and become the leaders they’ve long suggested they can be. When leaders invest 100% in their talent, they show their employees that they care about their growth and well-being – as a professional and a person. This type of engagement and empowerment will increase the chances that employees remain committed, purposeful, and delivering results.
Investment in the greater good will pay off for organizations in the end.