Talent management in the new reality Talent management in the new reality
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Employees’ changing expectations of work is one of the many challenges companies face in the new reality and the pace of change we’ve seen through the Pandemic is set to continue. 40 percent of current workers’ core skills are expected to change within 5 years and 60 percent of the skills required in 10 years’ time don’t yet exist (Source: World Economic Forum, The Future of Jobs, 2020). At the same time, the size and shape of the workforce is also expected to change. By 2025, 50 percent of all work will be undertaken by machines and 60 percent of the workforce is expected to be made up of contingent labour (Source: World Economic Forum, The Future of Jobs, 2020).
For many organisations these trends throw up questions around how to continue to compete and win in the fight for talent - both now and in the future. Research shows that CEOs rate talent risk as the largest threat to long-term growth (Source: KPMG, CEO Outlook: Covid 19 Special Edition, 2020). It’s no surprise then that now more than ever our clients are looking for advice around talent management. Reflecting on our recent client discussions three themes emerge from the questions we are being asked:
- Hybrid workforce – How should organisations manage a workforce that’s made up of virtual and in-office workers? What leadership behaviours are important in a hybrid world?
- Talent development – What needs to be put in place to empower employees to own their careers? How do we support our employees to develop through on the job experiences? Do we buy, borrow, build or ‘bot’ areas we have skills shortages? What support do organisations need to provide to help employees keep their skills fresh?
- Performance management – Is the 9-box grid still relevant? Do the pros of forced distribution outweigh the cons? What approach should be followed to evaluate a flexible resource pool?
Our Reimagining Talent Management model features elements that are important to consider when making changes to the way you manage talent.
Enabling Technology
What is it?
Digital tools and technology to help deliver on talent strategy and frictionless processes, e.g., KPMG uses ProFinda as an enabler of the internal talent marketplace.
Why is it important?
Generating insight from workforce data is a powerful strategy to support decisions around how talent is developed, recruited, sourced or located.
For instance, with the rise of talent marketplace platforms, organisations can better match their workforce supply with demand, identify critical skills gaps and provide a personalised experience for their employees to navigate career opportunities.
Talent philosophy
What is it?
How an organisation believes talent should be applied and managed to maximise business performance.
Why is it important?
It sets out an organisation’s guiding principles for managing talent. When uniformly understood at all levels, it shapes the desired employee value proposition (EVP).
Business-centric strategy
What is it?
A documented talent strategy that connects the talent philosophy with the business strategy. It defines the approach to recruitment, ROI analysis, succession planning, learning and development, performance management, etc.
Why is it important?
It effectively drives business performance by optimising people. As the single source of truth, it drives all talent activities by HR and the business, clarifying responsibilities and defining what success looks like.
Frictionless processes
What is it?
Processes that translate strategy into practice through its people (such as performance and talent management, learning and development and recruitment). When these processes are 'frictionless' they maximise the ability of employees to perform and respond in an agile way to market challenges and opportunities.
Why is it important?
Frictionless processes drive organisational efficiencies by reducing time spent on an activity and provide a seamless experience of the organisation. Not only is this better for overall business performance - it supports with talent retention too.
Employee experience
What is it?
The lived experience of employees in an organisation. This is shaped by employees’ day-to-day work-related physical, digital and human experiences, the employee value proposition, as well as overarching purpose, brand and values of the organisation.
Why is it important?
Organisations that invest in employee experience see 3x profit growth (Gartner, 2018), 18% reduction in employee turnover (Forbes, 2017) and 50% fewer absence days (Forrester, 2015).
Empathetic leadership
What is it?
Empathetic leaders demonstrate the 3Cs: courage to be imperfect; compassion to themselves and others; and connection with others through authenticity. They have high emotional intelligence and take a human-centric approach to leadership.
Why is it important?
Empathetic leadership drives high performance and improved business outcomes. It contributes to a psychologically safe environment that in turn creates a sense of trust, the foundational element of high-performing teams (Lencioni, 2002). Successful talent management is built on empathetic leadership.
Metrics
What is it?
Established performance indicators tracked by an organisation to gauge progress against targets. They are used in ongoing analyses to identify emerging talent trends.
Why is it important?
For most organisations, metrics feed regular reporting and an evidence base leaders can use to make decisions. Pathfinding organisations are using advanced analytics and real-time labour market insight to perform more sophisticated analysis, e.g., identifying root causes of attrition.
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Taking the time to think about how your organisation’s talent philosophy needs to change and acting on the following areas is a key starting point to build for a successful future.
- Employee experience: Think about your employees as customers to ensure they have the best possible experience of the organisation. This can contribute to an improved customer experience too. For example, a UK Energy provider has introduced a chatbot which gives call centre agents recommendations to help them respond to customer queries more quickly and more effectively over the phone.
- Empathetic leadership: Microsoft CEO, Satya Nadella, sent an email to more than 140,000 employees worldwide saying “…I worry about the health and safety of my co-workers and friends. My wife and I worry for her aging parents who are far away from us in India.” This is a great example of a leader showing honesty, compassion and vulnerability – all key elements of empathetic leadership.
- Frictionless process: Are supporting people processes easy to use? Do they enable you to systematically manage your talent, provide transparency and create valuable experiences for your employees? For example, does the way you review performance work for both employees and the business? As a manufacturing company that tried to improve its performance review process found, getting employee feedback to understand what does and doesn’t work is really important before making changes. After scrapping the annual cycle in favour of quarterly reviews they saw completion rates rise from 48 percent to 98 percent (Source: Dettori, S., Use Design Thinking to Build a Talent Process and Agile to Improve It, 2019).
- Metrics: 75 percent-80 percent of workers don’t complete their talent profile (Source: Degreed, The State of Skills 2021: Endangered, 2021).
- What can you do to make it easier for employees to update systems more regularly? Investing in this helps to increase reliability of the data you report and makes it easier to accurately segment employees and provide a more personal experience.
- Enabling technology: Tools like ProFinda, Simply Get Results and Faethm are increasingly being used to enable talent strategies. Enabling technologies like these give organisations visibility of their talent and the skills that exist across the workforce, allowing them to manage talent according to business need. For example, KPMG is using ProFinda to enable our internal talent marketplace - more on this in the next blog in this series. Given how many providers are available it can be difficult to decide which is the best for you - that’s where our experts come in.
To discuss how our team can help you effectively manage talent and prepare for the changes anticipated over the coming decade or to find out more about events we are hosting on this topic, feel free to reach out to us at Ruth.Svensson@KPMG.co.uk or Hannah.Reilly@kpmg.co.uk.
