By Constanze Harding & Ian MacRae
The megatrends that are shaping your business
The world of work is constantly evolving but the megatrends that will change businesses and economies are already here. We will not be able to predict all changes and challenges that technology and automation will bring. What we know is that technology adoption will ripple through all functions and hierarchy levels of an organization. It will continue to challenge traditional roles and replace a significant number of roles that require repetitive tasks. For sure, this will move employees and managers into an uncertain future and there will be a change in the type of talent required, with a need for depth in digital skills such as data analytics and cybersecurity.
Let us look at the data: The Office of National Statistics (ONS) estimates that 1.5 million of jobs in the UK (that’s 7.4% of the workforce) are at risk of being automated in lower skilled jobs and routine roles.
Humans, however, are likely to become obsolete in many different sectors, independent of their role and skill level. A report by McKinsey estimated that by 2025, 1.1 million banking jobs will be automated in Europe and another 800,000 in the USA by 2025.
Many of these roles will be automated or obsolete in the near future. That doesn’t mean the people in these roles will be obsolete. We argue that many of these employees have (or will need to develop) the skills, traits or capacity to be even more productive in the jobs of the future.
Building Organizational Capacity
It would indeed be a difficult, damaging and expensive approach to assume that every role that can be automated is an employee needing to leave the company. The best way for companies to remain competitive and to adapt to the changes will be to attract the widest possible pool of talent and reskill those in the company that have the capacity to develop new skills, take on new responsibilities and step up to challenges.
Companies have a competitive advantage in working with their own employees to build the capability and agility to adapt to the incoming megatrends. But this is not an endeavor managers should be putting off. Assessing and identifying those with the potential to develop into new roles, step up to uncertainty and challenge should start today. While it is impossible to predict the future, it is possible to identify the employees who are best at learning and adapting to change.
We all know that the current employee talent pool is, and must be, a significant asset within the company.
But in order to keep track with the rapid pace of change, it will be necessary to find employees who have the capacity and potential to learn quickly, who adapt to new responsibilities and who enjoy this. Equally, compensation and benefits programmes need to be considered, ensuring employees with the relevant skills and behaviours are appropriately rewarded and compensated.
Retention is even more important when building an adaptive capability within the company. In the same way, you would build a leadership talent pipeline, build a talent pipeline of the most adaptive, agile and flexible workers. These are your reserves that can be rapidly deployed to new projects. To have the available capacity though, make sure this group is being managed and compensated appropriately – this group is highly mobile so they will not find it difficult to seek greener pastures if they are undervalued or under-utilized.
The Questions for HR and Management
Management cannot be complacent. We believe that managers do not need to be tech gurus, nor do they need to be prescient. They need to be proactive in making sure that they are developing a talent pool of adaptive and flexible employees. This will be far less costly in the long run than trying to poach talent from companies who get there first.
Management and HR are expected to support the strategic mission of the organization. Specific capability assessment and development programmes need to be established today in order to ensure their workforce is prepared for the future and that the right skills are represented in their organization. With disruptive forces driving the transformation of every kind, management and HR is forced to answer existential questions for their businesses:
– Do you have a clear view of the required skills and capabilities across your workforce?
– Do you have strategies in place to upskill and reskill employees for the future?
– Are your leaders able to help ready the workforce of today for the jobs of tomorrow?
– Do you have systems and development pathways set up to identify those with high potential to adapt?
A New High Potential Cohort
Lastly, we argue that it takes a shift in perspective on talent management to start building capability now. Why? Because traditional talent management systems look for high potential leaders by looking at the current skills within the company. But going forward, it will be necessary to identify those within the company that have high potential to learn and adapt to new roles, capabilities and ways of working.
Many still use a variation of Jack Welch’s 20-70-10 system. Twenty per cent is highly productive or high potential and should be developed, 70% is average and 10% need to go. But there is room for a bit more nuance. Twenty per cent may very well be high potential leaders. Twenty per cent are reliable technicians and twenty per cent have a high potential to be resilient and adaptive to change. Those groups don’t always overlap.
When you’re looking for high potential, make sure that you ask the question “potential to do what?” If you ask the question of potential to build capability, you will notice that past performance is not enough anymore.
Constanze Harding is an experienced Organisational Development Consultant and Business Psychologist. She helps organisations to improve their people performance, focusing on talent assessment and leadership development.
Ian MacRae is the author of Myths of Work: The stereotypes and assumptions holding your organization back and his next book Myths of Social Media will be published in March 2020.