“It’s deja vu all over again.” (Yogi Berra)
Yogi’s right; we have seen this before – a situation where opportunities outstrip our capacity to fill them. As a matter of fact, we have seen a version of this story every year for at least the last eight years.
The difference is that today (in the US) the number of unfilled jobs has reached a high of 10,334,000 (adjusted for the recent job losses). What that means in terms of the impact on real hiring is that right now there are two jobs for every person available to work, and if you factor in necessary skills, experience, and capability, there are six open jobs for every person qualified to work in those roles.
In the UK there are 1.3M jobs that are unfilled. Unemployment is at historic lows in the US, Canada, UK, and more broadly across Europe. The talent gaps we are seeing are here to stay. Economists predict that difficulty finding talent will be with us for at least the next decade and beyond. Not having the talent to sustain and grow the business will cost global economies over $8.3 trillion dollars by 2030, according to Korn Ferry.
When C-level executives are asked about their concerns and constraints on the business, 71% of CEOs tell us that they believe talent shortages will continue. In the same Deloitte CEO study from October 2022, 50% of CEOs list the labor and skills shortage as a top disruptor.
The Great Reset
Across the talent landscape, we see CHROs (83%) reporting talent retention problems with people that possess in-demand skills (Executive Networks, 2022). In the US, we still see a robust job market, with over 4 million people leaving jobs on a monthly basis. 50% of workers in our Talent Index study said they were looking to leave in the next 12 months. LinkedIn recently reported that the rate of churn in June 2022 was unchanged compared to 2021.
Once labeled the “great resignation,” the current situation is really so much more than that: “the great realignment,” “the great reassessment,” “the great re-evaluation,” and the “great reset.” All of these descriptors speak to people wanting something more from their work and employers. People are looking for career growth, for development opportunities, for an alignment with values and purpose. Wellbeing, learning, and skill development also factor heavily into what people are looking for at work – and, because of the amount of opportunity in the job market, they are willing to look around until they find it.
The perfect storm
So here we are, in what seems like the perfect storm: a lot of opportunity, and a significant talent shortage. The strategy for closing talent and skills gaps moving forward must be long term in nature, with a great deal of flexibility; one that includes multiple pathways to getting the work done.
What can you do to attract and retain talent, and ensure that you have the talent you need to sustain and grow the business? You need to build your talent engine to become a truly talent-first organization.
The talent engine
Let’s begin with defining your talent engine. Every organization has a list of “whats” – the things they want to accomplish. Here are some that are common:
- They want to become a high performing organization.
- They want to align purpose and values so that they reflect their workforce. And, the workforce wants to connect with what the organization stands for and what it believes.
- They want a talent-centric employee value proposition: a focus on development, career planning, and opportunities for skill building for the work people are doing today and for the work they want to do in the future. Organizations want to offer talent mobility as a way to get the work done and offer people multiple career experiences.
- They care about well-being and want to embrace practices that support the well-being of their people.
- They are committed to learning and offering flexible ways of working.
- They want transparent opportunities and equal access for everyone.
These are just a few focus areas… but for every “what”, you need a “how”. Your talent engine is the how. Your talent practices touch everyone in your organization over the course of their tenure with your company. The employee experience you offer to your talent matters. So, for everything you want to create in your organization, define your “how.” Be clear about what it is and how things work.
1. Focus on skills
Use skills as a way to deconstruct jobs, determine what work is to be done, and what is needed to deliver that work. If you can’t fill open roles with the one-job, one-hire approach, you have to think of other ways to get the work done – in this talent economy, becoming a skills-centric talent-first organization is pretty much non-negotiable.
Getting the work done becomes a process of deconstructing jobs in favor of identifying the work, then determining what skills are needed (Work Without Jobs, 2022). The advantage of a skills-based approach is cost savings (by not filling jobs with external candidates), and you can unlock productivity by breaking the work into internal “gig” assignments, short-term projects, and contract work. This is made possible by creating an internal Talent Marketplace, sometimes referred to as the ‘opportunity marketplace’. This is a transparent way to create equal opportunity for all.
2. Prepare leaders
Focus on preparing leaders to develop people in a skills-centric operating model. This has broad implications for the organization. When it’s not about the job, but the work, leaders need to know how to identify the work and the necessary tasks so they can determine what skills are essential to completing the work. Development conversations are not events, but part of an ongoing dialogue between a manager and their people or team. In a skills-centric organization, work is more fluid, and development opportunities are available to everyone.
3. Be clear on responsibilities
It’s important that you are clear about your approach: what’s needed to support development in a skills centric organization? This the 51%/49% solution: where the organization and the individual share responsibility around building skills. The organization has the responsibility of providing the infrastructure, technology, tools and training – the 51%. The individual has responsibility for their development and skill building – the 49%. It’s about taking advantage of opportunities that are available, and about engaging in development opportunities and building your career pathways.
Indeed, this is a time for a different approach to talent and development. The World Economic Forum (2020) estimates that 70% of employers will offer upskilling and/or reskilling by 2025. What we know for certain is that doing nothing is not an option – waiting to develop your approach to skills only puts your organization farther behind. Now is the time to act: to use a skills-based approach in your talent strategy.
It’s the time to invest in your talent engine to build talent pipelines that are robust, and provide available talent sufficient to do the work that lies ahead.