10 March 2023
Maria Shishkova – Managing partner, AIMS International Bulgaria and Head of the AIMS International Talent Management Global Practice & North Lead Canada, Member of AIMS International – Host to the AIMS Sustainable Talent Management Series.
In the tertiary sector of the economy, the adoption of information technology and ever-increasing levels of automation have resulted in steady, if slowing, growth in productivity. They have also exposed just how essential the uniquely human capacities for original thought, creativity, and synergistic collaboration have become to long-term business success. These qualities, however, come at a premium. As a resource, they are renewable but most certainly not inexhaustible.
Talent must be managed responsibly
The talent crunch isn’t new to industries like engineering or software development and competition for the best corporate leadership has never been less than fierce, but the so-called Great Resignation has impacted organisations across the economy and triggered a wider war for talent that won’t de-escalate anytime soon. One study has predicted a shortage of more than 85 million highly skilled workers by 2030, resulting in a total loss of $8.5 trillion in unrealized annual revenue. And that was before the pandemic.
There’s only so much talent on the market at any one time. Fast-changing technology, organisational trends, and market forces also continually demand new skills and competencies, threatening to make today’s know-how redundant tomorrow. In 2020, the World Economic Forum estimated that changes in technology would mean 50% of all workers needed reskilling by 2025 and that 40% of their core skills would change in the same period. If the pool of critical talent isn’t expanding, it’s contracting.
All of this drives up the costs of making important new hires considerably. What’s worse, though, because it is so preventable, is that companies increasingly find themselves losing what talent they have to better offers, burnout, or alternative work models that offer a better work-life balance.
Talent isn’t inexhaustible – a lot are exhausted
Why do good people leave? If you’ve spent any time on LinkedIn, your Pavlovian answer might be the ubiquitous mantra, often attributed to Marcus Buckingham, that “People leave managers, not companies”. That’s true a lot of the time, but it’s not solely what’s been driving high attrition in the last couple of years across the developed world.
The pandemic and its aftereffects have given workers pause to search deeply within and ask what they really want from life, considering how short it can end up being. With that has come a large-scale re-evaluation of the place work holds in their lives and the value they draw from their relationships with their employers.
Many have burned out – 48% of employees and 53% of managers, says Microsoft. Besides the pandemic itself, an overnight change in where and how we work (“zoom fatigue”) and widespread anxiety over job security, the economy, and geo-political instability have also sharply increased rates of depression and anxiety in the workforce, most experts say.
Chronic stress reduces workers’ capacity for creative problem-solving and drives down productivity. It raises attrition rates and employee disengagement (“quiet quitting”). Ultimately, the calculus is that the effort they’re putting in is not worth the reward, whatever that may be for them.
The old contract is broken; the priority businesses give to developing a new one is a strong indication of their agility and will to thrive.
A sustainable talent management strategy
How do you attract and retain the best talent so that your employees not only remain engaged, energised, and committed to the organisation’s long-term success, but have the skills and competencies it needs today and tomorrow? Well, that, in a nutshell, is the basic definition of sustainable talent management.
AIMS sustainable talent management professionals recognise that the best team members tend to thrive in environments that embrace the latest technology, encourage a curious and creative mindset, champion quality and accountability, ensure open communication, and consider diversity a strength. As practitioners, the aim is to build a culture that accommodates talent’s diverse needs, so that everyone feels valued, nurtured, and part of something bigger than themselves.
What does this look like in practice? AIMS global experts share some characteristics of a sustainable approach to talent management:
- Diversity and inclusivity are not only celebrated but considered in all hiring and promotion decisions. Stephen Bailey, CEO ExecOnline, recently wrote for the World Economic Forum that a “lack of development equity – equitable access for underrepresented groups to formalized, career-enhancing development opportunities – means organizations aren’t leveraging the full potential of their people or their own place in the new learning economy.’
Can the talent shortage really be so bad when women serve in less than a third of top management positions, according to professional services network Grant Thornton or are less likely to be promoted from entry-level roles to manager positions, according to McKinsey? The potential in women, different ethnic or race groups, the LGBTQ+ community, and people with disabilities could all be better tapped to diversify leadership and address the skills shortage.
- Workplace culture regards employees in a fundamentally more holistic way than just as workers, aiming to unlock and sustain their potential for creative and productive enterprise. Beyond the time they put in, it considers their wellbeing, relationships, personal interests, and financial health. It promotes growth professionally and personally. As Microsoft has put it, “Now is the time for every organisation to re-recruit, re-onboard, and re-energize employees.” (Yes, it has just launched an ambitious new “employee experience” platform.)
- Performance management is oriented less towards reviewing and rating past behaviour and output than on the contribution the subject could make in the future and, as such, career pathing is flexible. Employees can work with managers to explore their suitability for alternative roles in the organisation and agree on a plan to make the change happen. If they’ve demonstrated culture-fit and possess valuable qualities that are hard to discern in new candidates, why not enable them to grow in a different direction within the organisation?
“Businesses sometimes turn to the market too quickly,” says Maria Shishkova, Managing Partner at AIMS International Bulgaria and the Global Head of Talent Management. “If you’ve spent time assessing employees’ full range of competencies and cognitive abilities, including any they don’t use in their existing roles, you’ll find scouting for talent internally much easier. You’ll retain their organisational and domain knowledge, improve cross-team, cross-functional collaboration, and develop a small army of inventive problem-solvers.”
Managers, meanwhile, can look for the necessary skills or personal qualities in other departments – though, of course, being careful not to poach employees who were not already considering a move of a kind.
- Skills development and mentorship programmes are actively promoted and incentivised across the organisation. Special attention is given to bright young entry-level employees and older staff members. The former group may be in a role they do not enjoy and are unsure of where they really want to go. The latter group may be considering early retirement or semi-retirement but could continue contributing their experience and expertise through further learning, reverse coaching, and more flexible work arrangements.
- Employee recognition and rewards are important for engaging and motivating employees and should be approached as a continuous, year-long programme. Recognition is more than just praise, however, and rewards must also be conceived as more than just financial. Surveys repeatedly show that today’s knowledge workers also value alternatives like more paid and unpaid leave, remote work options, and creative, personalised gifts and experiences.
Our colleague in Switzerland, Catherine Librandi, who is the EMEA head of Talent Management adds, “Take a unified approach to your competency model and value set and apply it across the whole organisation. If your company is scaling quickly and operating in more and more territories, be conscious of the need to adjust these to accommodate the world.”
Companies will gain a competitive edge during this worldwide talent crunch by implementing a formal sustainable talent management strategy. It is not a simple proposition, especially if there are a lot of stakeholders involved, all of whom will feel somewhat differently about the balance the organisation must strike between the needs of its leaders and shareholders and those of the ever-evolving workforce. It will also require frequent reassessment and adjustment. It is entirely worth it, however, and will yield benefits for everyone concerned.