The workforce emerging from the pandemic is different than the one that entered it. While the composition of workforces may have changed, the most significant shifts are occurring in how organizations approach the talent they have, the talent they need, and the expectations their talent has of them.
Having previously looked at the future of work, let’s explore these three workforce elements and what they mean for organizations moving forward.
The talent they have: Talent and its management are crucial catalysts to unlock your competitive advantage. To make the most of existing talent post- pandemic, organizations should conduct a baseline assessment of current resources. In this assessment, skills should be evaluated based on whether the current workforce is adequately equipped to help the organization execute its strategic priorities and perform at a high level.
Our research shows a significant relationship between talent management and organizational performance. Although only 5 percent of respondents say their talent-management system has improved company performance, among those, 99 percent say they are more likely to outperform competitors. Additionally, respondents at companies with very effective talent management are six times more likely to report higher total return to shareholders (TRS) than competitors, versus those at companies with very ineffective talent management.
The talent they need: Organizations must clearly establish the link between their strategic priorities and talent needs. Said differently, organizations need to know what to do in the short and long-term and who they need to do it. Once that link is solidified, organizations must consider investing in their existing workforce’s skills as well as attracting and retaining the right new talent.
Developing existing talent is among the most crucial investments organizations should make amidst talent scarcity and the high cost of external hires. A new employer-employee contract on reskilling is needed; employers should actively invest in upskilling to accommodate shifting needs, and constant learning should be a core expectation of employees. Not only can this increase worker productivity by 6-12 percent, but it also increases employee loyalty and satisfaction, reducing their likelihood of leaving. In a recent survey, 77 percent of business leaders indicated that retraining is very or moderately important for the future of their organization.
In functions where reskilling or upskilling are less desirable, companies must hire talent to fill current and future gaps. COVID-19 provided an opportunity to rethink knowledge, skills, abilities, and other characteristics (KSAOs) for existing roles and drastically reconsider expectations for future roles. Recent progress made on diversity, equity, and inclusion (DE&I) is at risk, and companies must be proactive. Applying a strategic lens to KSAOs will help organizations source diverse talent pools. There is also demand to partner with the larger talent ecosystem (employers, employees, guilds, government, etc.) to obtain and build the skills the company needs.
The expectations their talent has of them: The post-pandemic workforce also has clear demands for current and prospective employers. DE&I, purpose, and employee experience are now strategic priority staples that employees expect. To pay lip-service or neglect these domains will have dire consequences, including losing talent. However, it is short-sighted to think of these investments through the lens of “the losses we can prevent.” Instead, approach them as “the competitive advantage we can create.”
The business case for diversity comes from its strong link with organizational performance. In 2019, companies in the top quartile of executive-team gender diversity were 25 percent more likely to have above-average profitability than companies in the bottom quartile. A similar, and even stronger, pattern holds for cultural and ethnic diversity: In 2019, top-quartile companies outperformed the profitability of those in the fourth quartile by 36 percent.
Talent is critical to every organization. Investment—through development, hiring, and empowerment/inclusion—is the lynchpin to executing strategic priorities and giving an organization the best chance to thrive in an uncertain future.