Prioritising talent makes capital sense: Talent strategies for growth in tumultuous times
The workplace, mirroring the world, is in flux.
Global megatrends, particularly the rapidity and scale of technological change, are transforming societies, the workplace and workforce, and the nature of work. A paradox of our digital age is that as technology extrapolates automation and machine learning capabilities – equalising operational and productivity drivers and jeopardising almost one-third of all jobs in the next decade – so business needs ever more capable people as the strategic and creative force for performance advantage.
But talent is a pain point for many companies. The critical skills gap in the manufacturing sector, for example, threatens a $2.5 trillion loss in US output alone in the decade to 2030. And Gallup’s 2018 State of the Global Workplace report reflects concerning levels of employee participation: worldwide, 85% of employees are disengaged, with Australian and New Zealand workplaces marginally worse, at 86%. The report estimates a resultant $7 trillion sacrifice in annual worldwide productivity.
Course correction starts with the company itself. A beacon for recruitment, and a mainstay for retention, is an articulated, meaningful social purpose. There’s a correlation to success: companies pursuing profits with principles are more likely to grow annual revenues by at least 10%.
Diversity, too, is a recruitment necessity. Studies conclude that the top quartile of ethnic- or gender-diverse companies at executive level are, respectively, 33% and 21% more likely to achieve above-average sector EBIT margins.1
More broadly, as the global battle for leading talent ramps up, smart recruitment seeks potential rather than pedigree. In an increasingly complex, competitive and volatile business environment, the crucial attribute of future leaders and managers is not their current skill set, but a committed curiosity to learn new ones – and the humility to realise they’ll need to keep learning.
But to retain top talent, organisations must understand their expectations. Autonomy is table stakes, not simply in flexible work arrangements, but in meaningful ambits such as enabling leaders to redesign their team architecture, and to collaborate cross-functionally and externally. High potentials should be developed towards mastery: facilitate their ambition by challenging them with intricate, even uncomfortable projects, and matrixed reporting responsibilities. These will deepen their strengths and – with appropriate rewards and incentives – reinforce their commitment to the company.
Workplace transformation also requires talent professionals to reimagine their roles. Challenges include ensuring recruitment, retention and capability-building strategies are aligned with the company’s vision, talent analytics are appropriately utilised, and internal talent mobility is facilitated.
Companies with world-class ambitions must foster a culture of iterative learning throughout the organisation – including amongst leadership. “Leadership and learning are indispensable to each other,” wrote former US President John F. Kennedy. Optimising the skills and knowledge of its human capital is a key lever for achievement – a ballast through turbulent times, and a catalyst for outperformance when cycles turn positive.
1‘Delivering through diversity’, McKinsey & Company, January 2018, Exhibit 1