For many companies, labour will remain both its biggest cost and source of potential competitive advantage, even in an increasingly digital and automated world. A given organization’s ability to compete and execute strategy is increasingly dependent on its ability to manage its workforce strategically. Indeed, matching resources with shifting and often temporary business requirements will require whole new talent paradigms – in terms of recruiting in-demand and scarce talent, in terms of management and in terms of developing talent further.
Current practices would seem inadequate for the future. 85 percent of employees worldwide are reckoned to be performing below their potential due to engagement issues[i]. Furthermore, more than 50 percent of employees in digitally immature companies state they are planning to leave within three years, yet only six percent identify recruiting and retaining digital talent as their first-priority[ii].
Whilst HR has seen some recent changes, it has largely avoided the pressure to change in recent times as much as the numerous functions it supports. With pressure on the old system emerging at the organizational level, change is no longer an option. Evidence of this is already emerging; ‘…with many companies now organising their work project by project, their management and talent systems are becoming more team focused[iii].’ if HR heads – and the companies they inhabit – are to survive and thrive, ongoing renewal must become a reality rather than one-off or episodic change.
If as is reckoned the half-life of the average skill is now around five years, many companies are primed for disruption whether they accept it or not. Desired skill sets are set to change at an increasing rate for a range of jobs, ensuring that organisations could change dramatically within a decade or so. Profound changes in customer taste and needs, new markets emerging at the intersection of old ones together with the push to digitize and automate ‘…will impact current and future employees in terms of the required speed to adapt to the changing business climate[iv].’
Nearly two-thirds of employers expect leader and manager activities to change over the next three years[v], let alone ten. Planning for this within HR and by the CEO and Board, will have long term implications. What kind of skills and capabilities do you need to execute on your strategy and differentiate yourself[vi]? How do you assess these needs and on what basis? As noted by McKinsey, those organisations ‘…that are able to identify the critical 2 percent of the organisation, the people that generate most of the value (now and in the future) are the ones that are going to see extraordinary returns[vii],’ when appropriate structures are built around, and to support, it.