It’s not just AI: Uncertainty over the economy and the world order of globalization being turned on its head portend fears of recession that could add further concerns regarding people and talent. Protiviti’s Jim DeLoach poses 10 questions to help leaders understand how to manage talent in a rapidly changing world.
Acute talent shortages across numerous industries underscore the risks emanating from outdated, reactionary approaches to managing people, succession and culture. These pressures will deeply challenge companies across industries in both the short term and long term, according to a recent survey of over 1,200 C-level executives and directors that plotted the top global risks.
How can organizations make talent management fit for purpose in the 21st century?
Embrace new talent realities
Scarce talent. Fleeting employee loyalty. More employment options for coveted skillsets. Greater transparency into available employment opportunities. The remarkable effects of artificial intelligence (AI) and other technologies on the nature of work and the workplace itself.
All of this is driving undeniable trends. Intense competition for talent. The importance of organizational culture and shared values. The effects of a transient, mobile, multigenerational workforce on expectations for meaningful work. The need for learning and development. The importance of work/life balance, flexibility, health and wellness.
These realities of the 21st century demand thoughtful strategic conversations in both the C-suite and boardroom, regardless of the direction of short-term economic ebbs and flows. Success hinges on creating, implementing and communicating a talent strategy that aligns with the business strategy and provides an exceptional employee experience.
The CEO and board should ascertain that the chief human resources officer (CHRO) and HR function are adapting as talent markets and economic conditions change. Today’s talent challenges cannot be addressed with yesterday’s thinking. Over time, the need for more sophisticated talent strategies will only increase, as will risks triggered by relying on reactive strategies for managing talent. Below are imperatives to consider when establishing a new normal for managing people.
- Implement a sustainable talent strategy. Conduct a comprehensive inventory of current talent assets and skill sets, map them to business objectives and fill gaps through the company’s talent sources (e.g., full-time employees, contractors, temporary workers, managed services and outsourcing providers). This is an evergreen process that should be repeated quarterly (or more frequently if necessary).
- Foster a continuous recruiting mindset. Recruiting shouldn’t end with onboarding. Treat employees like customers over the long haul, recognizing that certain talent segments will remain difficult to hire and retain. Equip HR functions with the right mindset, skills and technology to develop and execute a modern talent strategy.
- Align talent-related actions to corporate culture. When actions conflict with executive leadership’s pronouncements about culture, employee engagement may decline, attrition may increase and the employee experience can suffer. Accordingly, management should ensure that actions align with the corporate culture narrative to maintain employee engagement and reduce attrition. Frame and communicate the rationale to the workforce behind decisions like hefty signing bonuses or significant staffing reductions. In particular, with return-to-office (RTO) rebounds and DEI scale-backs becoming more common, management should consider their cultural implications given past communications.
- Encourage and support data-driven decisions. Sole reliance on qualitative assessments of talent and skills is running out of steam. Supplement traditional workforce planning with AI-powered applications and advanced tools. Make decisions about role consolidation, reassignments and terminations based on data-driven insights into workforce and individual performance considering unique skills, relationships within the organization, personality strengths and development trajectories.
- Factor people into the AI strategy. AI technologies promise significant efficiencies and cost savings, but their success depends on employee acceptance and integration into workflows. Resistance to change can hinder adoption rates and affect investment returns. Therefore, aligning talent strategy with AI strategy is crucial. Costs for training, upskilling and support must be considered as AI systems are integrated into workflows, altering the manner in which humans work. Human oversight also is required to ensure accuracy and compliance with ethical and regulatory standards. This oversight is an ongoing cost, as are feedback mechanisms for identifying improvement opportunities.
Simply stated, understanding how humans and AI agents will collaborate, including how job functions and work processes will change, enhances productivity and drives better outcomes. These points are vital for realizing the full value of AI investments and maximizing return on investment. The stakes are high, impacting organizational culture, morale and talent retention and acquisition.
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Read moreDetailsQuestions for executive management and the board
Following are relevant questions for executive management and the board to consider when evaluating whether the company’s approach to managing talent is sufficiently comprehensive and effective:
- Do we have a clear view of the skills and talent (e.g., leadership abilities, functional/ operational expertise and specialized knowledge) our organization needs to meet its short-, mid- and long-term objectives underpinning our business strategy?
- Do we know if we have these capabilities within our organization currently, e.g., are there any skills gaps present in our organization that will impede us from achieving our short- and mid-term goals? For example, do we understand the impact of AI on our skills matrix and work processes?
- How effectively do we adapt to changing markets? For example:
- Are we skilling our people for the jobs of the future?
- What is the readiness of our employees in helping us transform our organization to stay ahead in the face of innovative and disruptive change? Do we handle unexpected challenges well?
- Do the CHRO and HR team have access to the data-driven performance insights they need to reduce hiring activity and/or staff size (when necessary) with limited impact on the execution of business objectives? For example, can HR leaders consider workforce changes based on data analyses and longer-term forecasts, while concurrently focusing on the employee experience?
- Have we evaluated the effectiveness of our onboarding process in integrating talent and preparing external hires to contribute and succeed?
- How effective is our learning environment in developing the skills of our people and the resiliency of our workforce? Where are we in preparing our people for the future of work?
- Are we channeling people into areas they are passionate about?
- Are there aspects of our culture that require improvement? For example:
- Are there pockets of high turnover where we need to look for patterns and themes as well as the possibility of an ineffective leader?
- Are we managing the effects of remote work, RTO mandates and DEI scale-backs, if applicable, on our culture effectively?
- Have we assessed the impact of AI on our culture? Are our people prepared to embrace AI and adapt to work processes that include AI agents?
- How does our overall retention compare to others in the industry? For example, what is the level of employee satisfaction and average tenure? When staff members resign, what are some of the reasons cited for leaving?
- Is our compensation structure competitive and effective in delivering appropriate rewards? For example, is our reward system (base pay, incentive compensation and benefits) fair when performance goals are achieved and adjusted for the risks undertaken in achieving those goals? How do we know?
Sharpen the focus on talent
The above discussion emphasizes talent management. Succession is an important subset of talent management and will be discussed in a future installment. Senior management’s and the board’s focus on talent and succession planning requires a comprehensive effort, the success of which hinges on several factors, including an appropriate talent mindset, the communication of the talent strategy and related objectives throughout the enterprise and investments in supporting technology and human capital analytics. The above discussion and related 10 questions offer leaders an opportunity to send a clear message to the organization as to what they are looking for in terms of a comprehensive talent management strategy.
Depending on the risks inherent in the company’s operations, senior management and directors should include talent strategy KPIs on the C-suite and boardroom dashboards linked to the overall strategy to facilitate monitoring of execution and progress. In addition, sufficient agenda time should be allocated to review talent strategy and the talent pipeline on a periodic basis. Finally, to ensure that the executive team and board are fully informed, there should be a periodic evaluation of the quality of presentations and discussions of talent strategy to identify opportunities for improvement.
Jim DeLoach, a founding 
