5 Steps to Disrupt and Improve Your Talent Pipeline
"I've got an opening on my team; do you know of anyone?" How often have you initiated this conversation or been a part of it recently? It's been months since you have done any workforce and succession planning, and unfortunately, it looks like it will be several more months before you get another chance. Work is just too busy. Most leaders struggle to find and develop the ready-now talent they need. But should leaders even bother spending time trying to develop employees and plan for the future, given the turbulence in the labor market and uncertainty in the world? Workforce challenges are nothing new. However, industry experts forecast that your talent challenges will become increasingly severe by 2030. Building a pool of qualified candidates ready to fill newly created or vacated positions can be challenging. But with a few steps, you can disrupt your processes to improve your talent pipeline position.
Why Disrupting Your Talent Pipeline Matters
You might be thinking to yourself, no one knows the future for sure, so why bother trying to build a pool of ready-now candidates? One of the most significant downfalls of strategic planning in today’s turbulent marketplace is that the process often fails to consider future changes in the environment. But, only relying on short-term planning is gambling with your company’s future.
How many job titles exist in your company today that didn’t exist 5-10 years ago? I expect that you will be able to think of more than one. An estimate from the Institute for the Future suggests that up to 85% of the jobs that will exist in 2030 did not exist in 2019. While this estimate is likely high, given we are only seven years away from 2030, we know that recent changes are profoundly impacting the workforce. Data from LinkedIn reflects a 60% increase in new job titles related to the future of work.
The pace of change is only getting faster and having broader impacts on your business. When facilitating workshops on the topic of change, I often ask leaders to think back and recount their company changes on a timeline. Each time I see an increase in the frequency of changes closer to the current date, some of this could be the tendency to weigh recent events more heavily than older events, but even excluding a reasonable error of attribution, leaders will agree there has been an increase. Today this stems from rapid advances in the fields of robotics, artificial intelligence, biotechnology, advanced materials, and genomics. These changes are driving additional change. The following video from MIT Sloan provides some insight into an explanation for this increase in the pace of change.
A standard tool most companies use to identify and develop their talent pipeline for the future is succession planning. The current state of most companies’ succession planning is not good. According to the Corporate Executive Board, organizations fail to identify 50% of their positions with pre-identified successors. Also, executives have the lowest succession plan success rate, filling only 28% of jobs with pre-identified successors. There are likely many contributing factors to these poor results. One core, common, and critical factor impacting most businesses is the variability in the effectiveness of developing employees. Development investments do not always deliver on promised results. A survey of leaders by McKinsey & Co. found that only 25% of thought that training actually improved employee performance.
There is a fundamental shift underway within the employee population from traditional company-based employment to a gig economy. Mastercard reported that the size of the gig economy will reach $455 billion, and approximately 50% of the workforce will be freelancing in the US by 2027. Currently, estimates from the Pew Research Center are that 16% to 35% of the U.S. workforce has earned money on a gig platform
There are lots of reasons, both internal and external to your business, that may make it seem like you should walk away from planning and managing your talent pipeline. But what you need now is a disruptive change to improve your talent pipeline processes.
dis·rupt (verb) 1. drastically alter or destroy the structure of (something).
Disruption Step 1: Strategic workforce planning
It is time for strategic workforce planning (SWP) to become a formal part of your company’s strategic planning. It is a repeatable, measurable business process that helps execute strategic initiatives in a time-sensitive fashion.
The focus of SWP is on roles that most significantly impact the company's strategies. Inputs are both quantitative and qualitative workforce measures from both current and future state perspectives. The outcomes are people strategies embedded into your strategic initiatives. Environmental scanning is a strategic workforce planning process to systematically survey and interpret relevant talent data to identify external opportunities and threats that could influence future decisions. It is similar to a S.W.O.T. analysis.
As the world changes, companies must change. It is too easy for workforce plans to get behind and out of sync with the direction of the company without formally embedding strategic workforce planning into the company's strategic planning processes.
Disruption Step 2: Strategic foresight and scenario planning
Likely, the single most value-added strategic talent planning process in today's complex and ambiguous marketplace is the application of strategic foresight. Industries and the labor market are changing so fast that it is no longer an option for leaders not to be paying attention to the trends that will impact their business and the workforce.
Scenario planning is a decision-making tool used in the application of strategic foresight to explore and understand a variety of issues impacting organizations. Since we cannot predict the future, both learning and preparation are essential. The goal is for leadership teams to become more informed by broadening ideas about what multiple futures might bring. Scenario planning involves identifying a specific set of uncertainties and different realities of what might happen in the future. This process helps you keep a pulse on the current state but also an eye on the future.
Disruption Step 3: Critical role identification
All of the jobs in your company are important. Right? If not, that is another disruption needed. But some jobs are more critical or add more value than others. It is time to take a very thoughtful and structured approach to identify your company’s critical 'few' roles, so you can forecast and focus your talent plans.
Critical role identification must go beyond the top of the organizational chart. While executive roles are essential, they may not be critical. When identifying critical roles, it helps to consider each position’s skills value to the customer and company, and skills uniqueness both within the company (bench-strength) and outside the company. The use of a multivariate rating tool with a broad item scale, such as a one to seven-point scale, allows for greater differentiation across roles.
Disruption Step 4: Succession planning
Succession planning is intended to increase the availability of experienced, capable, and diverse talent, ensuring the right people in the right jobs now and in the future. Depending on how advanced your company's succession planning is, the following are a few potential changes that most companies could benefit from making:
Talent management needs to be integrated. Talent acquisition, talent sourcing, and successor identification process activities should be aligned. Sourcing is aware of the external labor market potential, talent acquisition is aware of the current trends, and both can proactively stay connected with passive external candidates that may be able to step into a forecasted succession gap if aligned.
Talent calibration and learning and development activities need to shift from competencies and skills to also include specific virtues and experiences necessary for the successor role. Virtues are better predictors of what someone will do, and experiences ensure a higher success rate of identified successors.
Talent reviews need to be robust discussions, not confirmation of what is already known. They should take on the same level of rigor as company business plan reviews. When reviewing talent, it is crucial to discuss the buy, build, and bounce needs for talent. Too often, talent reviews are an afterthought or get minimal as compared to business planning discussions.
Disruption Step 5: Data-driven decision-making
There is a real opportunity for disruption of the talent processes by using data analytics and data-driven decision-making. Leading HR organizations are using descriptive, predictive, and prescriptive people analytics. Studies support that when HR applies people analytics to identify low and high performers' skills and attributes, leaders tend to make unbiased decisions in talent acquisition processes.
What if you could mine external sources of data on competencies from benchmarking sites, skills from social networking sites, and talent availability from employment sites? You could match the external data with internal data on the value and internal bench strength from your HR information systems, informing strategic planning with a more accurate and real-time understanding to shape company strategies and tactics.
If companies are going to successfully navigate and thrive in a time of continual innovation and change, ultimately, they will need to leverage technology to help us meet the business opportunities created by technology.
What is your real talent pipeline challenge?
Take up the mantle of change. For this is your time. Winston Churchill
References:
Al-Hashimi, A., Holding, T., Barcia, J., Benitez, S., Duong, J., Frauenfelder, M., Gorbis, M., Harrles, M., Harrington, P., Rawana, M., Rose, D., Tay, K., and Whitehouse, B. (2019). Future of work: Forecasting emerging technologies' impact on work in the next era of human-machine partnerships. Institute For The Future.
Anderson, M., McClain, C., Faverio, M., and Gelles-Watnick, R. (2021). The state of gig work in 2021. Pew Research Center.
Fahey, S. (2003). High-impact succession management: From succession planning to strategic executive talent management. Corporate Executive Board.
De Smet, A., Mcgurk, M., and Schwartz, E. (2010). Getting more from your training programs. Mckenzie and Company.
Krikorian, S. (2020). Fueling the global gig economy: How real-time, card-based disbursements can support a changing workforce. Mastercard.
McGreggor, J. (2022). The next in-demand job title: Head of the Future of Work. Forbes
Tsekov, P. (2023). How to properly navigate the gig economy and the large pool of IT experts. Forbes.
Plamen Tsekov
Zielinski, D. (2019). People analytics software is changing the HR game. SHRM HR Magazine.
Comments