Risks associated with the global talent and skills race spill over into every aspect of a company’s operations, including everything from business models and strategies to digitalization and operational complexity. As a result, the global talent and skills race creates new and emerging risk exposures for our TMT clients.
Today’s workplace is in perpetual fast forward, with people related issues and requirements increasingly at the centre. We work in a world where the speed of change is exponentially greater than it has ever been, where the bright light of social media exposes every detail, where people costs and risks are escalating, and where automation and technology present ever-increasing opportunities and challenges to companies. This is a world where people’s lives inside and outside of the workplace are complex and stressful, and where talent continues to be vital to a thriving organization.
TMT organizations will require strong, visionary HR leadership to unlock the opportunities in the new world of work and to address pressing people challenges that impact a company’s ability to hire correctly and therefore the company’s bottom line. It will be crucial for TMT companies to move beyond yesterday’s HR models as the cost of inaction can be catastrophic for the company.
John Bremen, WTW Chief Innovation and Acceleration Officer, has suggested a demographic ‘perfect storm’ was brewing in developed labour markets before the pandemic, one that is reducing talent availability at both the leadership and entry levels of organizations. Today, future-seeking leaders understand the varied factors creating talent shortages as they tackle the challenge.
The impact is pronounced in countries including the U.S., UK, Canada, France, Germany, and the Netherlands. As large swells of Baby Boomers retire and Millennials move past entry-level roles, talent shortages among Generation X and Generation Z workers exacerbate the so-called Great Resignation.
Bremen suggests the following actions:
As we discussed previously in the report, our work with the Mack Institute team, bolstered by WTW’s 2021 EX-Survey, found employers are making the EX a top priority. However, few have an integrated EX and business strategy to address the challenges of a new post-pandemic workplace reality.
Business leaders say EX is a vital retention and engagement factor as well as a boon to productivity and business performance. Indeed, the EX Survey 2021 found nine in 10 employers plan to make EX enhancements over the next three years. However, most survey respondents find EX aspirations mired in pandemic-related policies and procedures.
With many employees continuing to work remotely, business leaders are struggling to replace the traditional business model where managers and employees worked closely together to achieve business objectives. The implications for productivity, employee and customer satisfaction, and even corporate cultures are still being worked out.
The survey found that the pandemic and related actions taken by employers had a negative impact on the EX (43%) as well as employee wellbeing (50%) and employee engagement (40%).
“Companies best at creating a high-quality EX have an EX-strategy that is integrated with their business strategy,” said Richard Veal, WTW Global Practice Leader, Communication and Change Management. “They also deploy technology effectively to shape their employees’ experience in ways that work for both the employee and the business.”
With a persistent global shortage of digital talent, companies are taking creative approaches to expanding their talent pool. As described elsewhere in this report, the actions include training non-technical employees to take on new digital positions.
Many TMT companies identified by the Mack Institute team are increasingly taking advantage of diversity initiatives to find or grow digital talent among women and minorities who may have been underutilized or overlooked in the past. But finding employees with the aptitude and interest in a career shift isn’t easy.
A solution can be found in HR technology that enables a company to scour its workforce for hidden talent. As we have mentioned previously. Hitch, is an example of a WTW digital echo system partner, that is deploying it’s SaaS-based internal mobility platform to help solve what the company calls “disconnects” of talent utilization, skill-building, and job training. Using AI and other technology, Hitch enables companies to gain a deeper understanding of workforce skills to identify who is best suited for particular assignments or roles. In addition, from a rewards perspective, organizations should have access to solutions like SkillsVue that will help them to understand how skills can impact how competitive pay looks like. This will help them to be more successful in ensuring that the business will have the right talent with the right skills at the right time at the right place.
“Reskilling and upskilling your workforce to maintain productivity has become the cornerstone of many companies’ success,” Hitch founder Kelley Steven-Waiss wrote in Forbes. “But maintaining visibility into your workforce’s skills and career goals is a paramount challenge.”
WTW’s Futures Report 2021 states, “Risks on the horizon,” provides an in-depth look at the TMT risk environment and related insurance and risk-financing. One of our principal findings is that many companies have failed to fully integrate risk management into its operations, a disconnect that was exposed within some companies by global supply chain issues (see the WTW article, COVID-19’s wake-up call for supply chain risk.)
“In looking more closely at the global talent and skills race, we have similar concerns about a possible disconnect between risk management, HR and other business leaders involved in talent management,” notes Fredrik Motzfeldt, WTW TMT industry group leader.
Motzfeldt believes risk managers have had their hands full managing pandemic-related risks, including cybersecurity and other exposures created by remote working conditions. But he points to emerging risks, including privacy concerns as employers monitor remote workers with keystroke tracking, screenshots, and facial recognition.
One hurdle is the need for HR functions to step up their game in the whole area of digital transformation. Motzfeldt noted a WTW’s 2021 AI and digital talent compensation survey of more than 500 companies found only 12% of organizations believe their HR functions are fully prepared for the organizational changes required for digitalization. Another 9% said their functions are completely unprepared.
“HR leaders, like any line managers, need to understand the potential risks that will continue to surface as companies move to new business models and deploy new processes and technology for recruiting, managing and monitories employees,” Motzfeldt advises.
EX is the sum of all touch points and moments that matter
Source: WTW Research
