Why Talent Optimisation Must Be Your 2025 Imperative (Mark McKormack at Fuel50) With Workplace X
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Delivered at the Executive Leaders Network and Workplace X HR Leaders Event on Thursday 10th November 2022. "Organisational resilience and workforce optimisation are now strategic imperatives in our new post-pandemic recession era. The world of work is being defined by talent shortages and the skills gaps crisis, with Reskilling, Recruiting and Retention now trending as the global HR challenges today. 80% of companies looking to future-proof their organisation need to understand their workforce better and tap into the fast-growing talent marketplace (SHRM). Join us as we enter the era of Talent Optimisation, where talents and skills will be your differentiator."
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Why Talent Optimisation Must Be Your 2025 Imperative (Mark McKormack at Fuel50) With Workplace X
- 1. 1 Mark McCormack RVP Talent Marketplace Solutions Fuel50 Why Talent Optimisation Must Be Your 2025 Imperative Connecting your universe for the new talent economy
- 2. 2 a 76% 75% of businesses are experiencing talent shortages Education, Health & Government IT & Technology Manufacturing Banking & Finance Wholesale & Retail Trade Restaurants & Hotels Construction a 76% a 76% a 75% a 74% a 75% a 72% Talent shortages across industries Source: ManpowerGroup 2
- 3. 3 3 “More than half of UK businesses are currently experiencing skills shortages and are concerned it could pose a threat to their growth.” Enterprise Times
- 4. 4 4 78% of employers are having difficulty filling jobs due to a lack of skilled talent. Manpower Group
- 5. Is your industry experiencing a skills shortage? A. Yes B. No Poll
- 6. 6 6 65% of L&D leaders are concerned about their ability to meet the skills demands of their organisation. Enterprise Times
- 7. 7 7 “A lack of career development is one of the key factors employees cited for leaving in recent months.” Enterprise Times
- 8. 8 8 “Offering skills and education to staff is one way for organisations to mitigate the risk.” Enterprise Times
- 9. Are your employees asking for more opportunity to reskill for the future? A. Yes B. No Poll
- 10. 10 10 Talent Optimisation organisations must focus on becoming agile, resilient workforces. Reskilling Resilience Retention
- 11. 11 Knowing current Talent Risks Today Reskilling Succession Increased Costs Wellbeing Optimising Skills Redundancy Identify skills-gaps and increase skills-based learning, for both today and the future. Every Level of the Business Needs a Plan Identify your retention risks early, mitigate churn, and plan at every level. Middle management the most prone to churn. “The Great Renegotiation” People and organisations are revaluing their jobs like never before. Every level of the business needs to be prepared. People Demand Better Health & Wellbeing With additional stress on the business as a result of churn and change, workforce wellbeing is imperative.
- 12. 12 Rapid Innovation The exponential rate of technological innovation (and adoption) is near-vertical. This advancement is outpacing workforce readiness. Knowing future Talent Risks 2025 Digital Skills Retention Economic Climate Rapid increase in digital adoption means upskilling and reskilling gaps are getting bigger, faster. Significant effort will be required to identify and support at-risk talent to ensure workforce sustainability. Workforce resiliency will continue to be put under pressure as new talent becomes more selective, and the best talent becomes more in need. Talent will be the competitive differentiator. Global economic conditions, inflationary pressures and constrained growth opportunities will add another layer of pressure. The need for workforce agility is most important, now more than ever.
- 13. 13 5 Imperatives for the Future of Talent Josh Bersin Global Industry Analyst 2022 The 5 Imperatives for the Future of Talent 13
- 14. 14 Buy Go to the external market to attract talent that can’t be built in-house Build Invest in learning and development to grow your talent pipeline Borrow Cultivate communities of talent outside the organization Bridge Help people move on or move up to new roles within the organization 1 2 4 Bridge Building This is the era for building bridges to talent communities. 3
- 15. 15 15 “Bench strength is not only about having the right players on the bench, but playing the right people.”
- 16. 16 16 “Talent Marketplace platforms are the most important and disruptive change in the HR Technology landscape this decade.” Josh Bersin Global Industry Analyst July 2020
- 17. 17 Fuel50 Global Talent Mobility Best Practice Research Understand current talent mobility practices, best-in-class talent mobility, and the imperatives for talent mobility in the future across high-performing organisations around the world.
- 18. Our research has shown that if an employee believes their organisation prioritises, values and rewards learning, then they will stay. Source: Fuel50, Talent Mobility Benchmarking Study 2021
- 19. What does career development look like in this new era?
- 20. 20 Position seniority Tenure Longer runs Steeper rises Traditional careers Today’s careers Upward transition Lateral transition 20 Career Agility in the 21st century Longer runs and steeper rises
- 22. 22 22 Lattice connections in the Talent Marketplace The networked organisation Cross-functional collaboration, knowledge-sharing and internal opportunities.
- 23. 23 The future of career development is the open and on-demand marketplace. Connecting People Marketplace Power Connect with people Matched on mutual interests, values, connections, relationships, commonalities. Connect with places Matched on location, interests, needs, requirements, budget, activities. Connect with opportunities Matched career opportunities based on aspirations, goals, values, skills and talents, experiences and current work/life stages.
- 24. 24 50% of employees said it’s easier to find a new job outside of their organisation than inside. Only 29% of HR leaders said employees were exploring career paths internally. External hires: • 61% more likely to be fired. • Paid up to 20% more. • Cost 2X as much as internal hires to recruit. • Take almost 2X longer to onboard. Internal hires: • Cost half as much. • Half the time to onboard. • Typically promoted faster and have increased engagement and productivity. • Much less likely to leave. Less than 33% of organisations have the technology to see their talent. Despite over 75% of organisations having strategic priorities to improve their internal talent mobility initiatives. Social networks are the #1 source of hires followed by job boards. 55% of employees said they are likely to look for a new job in the next 12 months.
- 25. TOP FINDINGS ON THE IMPACT OF COVID Talent mobility programs have had a proven positive impact on employee retention with a 60% reduction in attrition where a talent marketplace is used by employees. Source: Fuel50, Talent Mobility Benchmarking Study 2021
- 26. 26 26 Entering the era of Talent Optimisation Best people, best fit.
- 27. The new universe of talent technologies The HR Tech Landscape Has Evolved ROI Business Centric Employee Centric Traditional HR Tech Tracking and reporting Talent Management Top-down focus and HR-driven Talent Marketplace Fair, transparent, equitable marketplace that’s employee-driven and powers talent intelligence 27
- 28. 28 Fuel50’s skills-based AI Talent Marketplace fuels talent density and workforce optimisation • Deeply-personalised, human-centric experience • Skills at its core • Supports workforce agility and transparency • Provides data-driven insights enabled by AI Josh Bersin Global Industry Analyst 2022 5 Imperatives for the Future of Talent
- 29. >1m hours Of productivity gains unlocked through an internal gigs marketplace +55% Increase in positions filled internally +60% Improvement in employee retention where Fuel50 is used The Top Line Transforming the value of talent. value The Bottom Line Transforming the cost of talent. cost
- 30. 30 Thank you for joining 30 Get all this and more at fuel50.com/research Mark McCormack RVP Talent Marketplace Solutions Fuel50 Why Talent Optimisation Must Be Your 2025 Imperative
Editor's Notes
- Good morning, thank you all for joining the session today, a little about me my name is mark McCormack I am the RVP of talent marketplace solutions at fuel50 one of the sponsors here today, I have been in tech sales for many years and primarily within the HR/L&D space and really have a passion for delivering solutions that not only support the employee experience and provide career development opportunities but actually have a tangible impact to the organsiation. and really what I wanted to do today is share some findings, some data and some valuable information as to why talent optimisation is so important and hopefully give you some golden nuggets to take away with you today.
- So to kick things off and really set the scene, We are in the midst of a talent crisis, there is a talent shortage across Europe, and in fact we are at a 16 year high. This recovery is unlike anything we have ever seen – there is a demand for skills at record highs in many markets as you can see on the screen here and unemployment levels remain high. And Uneven economic growth continues, with some markets recovering, while others lag, hampered by Covid variants, lockdowns and supply chain challenges, and im sure we've all seen and experienced this over the last couple of years.
- We have seen that more than half of businesses across Europe are experiencing skill shortages that can potentially cause a threat to their growth.
- 78% of employers are having difficulty filling jobs due to lack of skilled talent, now that’s a huge number.
- Now id love to throw a question out to the audience, by way of hands in your industry are you experiencing a skills shortage, (response:: Interesting, thank you, and this is exactly what the data is telling us) If anyone is willing to add a comment, id love to hear what skills are you seeing that are in high demand right now?
- what we are also hearing is that 65% of L&D leaders are conerncered about their ability to meet the skills demands of their organisation.
- With a lack of career development bei g one of the key factors that their employees have stated for leaving.
- And offering skills and education is one way for organisations to mitigate that risk.
- Another question to the audience with a show of hands, are your employees asking for more opportunities to reskill for the future? something to think about within your own organisation, How ready is your organization for the skills you need in 5 years’ time? And How are you preparing your workforce for the future?
- We are entering the era of talent optimisation, and there is going to be 3 driving imperatives for the next 5 years, which is reskilling, we need resilient workforces and retention is going to remain top of mind, how do we retain and grow our talent. Whilst retention is a focus for many organisations, resilience is a huge topic and focus area taking what we have learnt from the pandemic, how do we build a more resilient workforce, how do we support the wellbeing of our employees.
- So what we are seeing as the key risks today in these four interrelated topics that combined create kind of a perfect storm for talent risk Reskilling,, this is the current talent risk that we are all seeing today. Succession planning risk – we are still all facing that we are experiencing increased costs associated with people leaving and new hiring And employees demanding better health and wellbeing
- But then when we look forward 5 years, What do we also need to anticipate when we look to future proof our workforce, the rate of innovation will continue to accelerate, its been accelerating for decades but with this level of innovation that we haven’t seen before is accelerating. Just as an example if we think about the tools that we use at work daily, we are getting new tools all the time, using slack as an example, some people love slack, some people are hating it and have trouble to adapting to it. And With the increase in these new tools and digital adoption, we all need more digital skills and these skill gaps are getting bigger and faster the more we implement As I have already mentioned around retention, this has got to remain top of mind and talent is going to be the key competitive differentiator as we go into the next 5 years, its your people, its your talent that are going to allow you to compete and win and grow a successful business and maintain a successful business. And we are experiencing a compressed economic environment, and with this current climate there is a degree of uncertainty that we are having, so we absolutely need to take care of our talent because our talent is uncertain about their future.
- I am sure many of you follow Josh Bersin, one of the leading industry analysts and what Josh has told us is that there are 5 imperatives for the future of talent. It has to be a personalized experience in an experience-centric HR system, skills have got to be at the core because reskilling is so important, you need to have data to help you make great talent decisions powered by AI. We need to remain agile and resilient as we have talked already. So we really need to build this into our business and operating methodologies and our hr practices so we remain agile, and that goes right down to your career framework and your skills architecture that needs to remain agile. And we have learnt in the last five years that transparency around our decision-making is so important, we need robust data to help us make great decisions about talent because DE&I is important, so now more than ever our decisions about our people need to be robust, they need to be based on good skills, intelligence and they need to be defensible.
- In terms of our talent strategies we have got 4 key areas that have always been a key part of our thinking The first is buying externally, now the challenge here is it costs at least twice as much to hire externally, and actually from what I am hearing all the time is that this is underestimated and more likely 3 X or 4X. Some other interesting facts that you may or may not know, an external hire is 61% more likely to be fired, they take twice as long to get up to speed and our own internal data is showing us that internal mobility and internal hires have much faster times to productivity because they know their way around the organisation, they know whats what, they have got that institutional knowledge, they are useful to you from day 1 as opposed to an external that has got all that learning to do, so buying is possiblly your least investable strategy right now Building your talent is probably your best strategy and im going to talk to this in more detail shortly. We are also entering the era where you can borrow talent, the gig mentality has been well and truly established now (by Gig I mean short term projects and secondments), we first saw this back in 2018 with Abbott Laboratories, it supported internal talent mobility there, when the covid outbreak hit, they had to rapidly redeploy people to those projects to solve the problem of a global covid 19 test, and they wwere the first to market, but they were using gigs to get the right people into those project teams as fast as possible. So a fantastic example of why borrowing talent internally is so important. And then creating a bridge strategy where you have got a really engaged approach to your talent community which is part of our work today. So when you are thinking about your talent pool, can they see a future path to opportunities? Can they see if they were to start here as an account manager that they could become Director or VP as an example in their future and see a roadmap of this? Can you engage your talent pools in these learnings so that they are starting faster and that they are ready, so that we are connecting them to the right kind of learnings pre-hire so you have an informed, engaged and motivated talent pool.
- If we look at bench strength, We all have to build our bench strength, using a sporting analogy – Man united for example have got incredible bench strength, they have paid a lot for their talent but its not only about having the right players on the bench Its about playing the right people at the right time with the right focus in the right place. One story I love about benchstrength from the work Fuel50 has done, is at Allied Irish bank, Brujeen walsh, is the strategic workforce planning manager and the way that she describes it is that 5 years ago, she had the luxury of doing succession planning for the top 100 people across the bank, but as a result of the pandemic, she now has to rtovide continguency planning and have a talent pipe for every single person across the business because all of a sudden there may be a branch closing. Five years ago they didn’t have to think about that kind of contiguency planning, and yes they are post pandemic but they seeing all sorts of other things happening, so it’s a continuous way of having to do agile workforce planning. .
- So how are we responding as an industry to help solve for the immediate need of creating a reskilled, resilient, retained and engaged workforce. Josh bersin has described the talent marketplace as being the most significant in how we are helping solve this.
- Last year Fuel50 conducted some research, we went to around 250 Global HR Practitioners and we had a really good spread of company sizes and a good geographic response, and we found some really good indicators. and actually I Really encourage you to pickup our research after this session, this can be found on our website or pick them up at our booth, because there is some gold dust there in terms of the best strategies that are going to help you with your DE&I imperatives, your internal mobility and how to create an engaged and retained workforce.
- One of the key findings from our research was that if an employee believes that the organization is prioritizing values and rewarding learning, they will stay. So if you can provide that learning for them, make it easy for them to access that learning. and if that learning involves stretch assignments and projects and experiences and coaches and access to mentors that fit the skills they want to build, its going to be even more valuable to them. and then they are likely to stay.
- So what does career development need to look like in this new era of talent optimization?
- Now, in the olden days, people had a staircase to their future, what I mean by this is they joined an organisation, and every two years they got a promotion. An example of this is my grandfather, He joined straight from school and stayed with the one organization for his entire career, he moved up until he was running the entire operation over a 40 or 50 year career. But that doesn’t really exist anymore. It went out last decade, it went out last century. It's gone. That staircase mentality where people could have promotions regularly just does not happen anymore. In today's reality. Today's career path is really characterized by what we call longer runs and steeper rises. So there's longer runs, there's no promotion. There's a long time you're at the same level, you might get a parallel move if you're lucky but there's no vertical move. You've got to do a longer service before you can have an opportunity and that's why the younger generation today are more likely to move jobs because there is no opportunity and when there is a promotion people often have that step rise and don't have the skills that they would have learnt in the old staircase model, instead, we've got this massive rise. Our challenge today is how do we create learning and growth and career momentum and a sense of career acceleration through those longer runs. So we've got to do that through projects and stretch assignments and mentors and coaches and learning to create that sense of career growth. It's going to give them the learning experiences to prepare them for the future.
- So in todays career, the ladder is gone, the staircase is gone, todays career is much more like a lattice. It's like a climbing wall. You've got to be agile. You've got to move left and right and make connections.
- todays career approach has got to be about a networked organization where people are working cross functional, knowledge sharing, and internal opportunities, assignments, project work becomes as critical to building your network more broadly.
- This is what that looks like with a talent marketplace. And this is a relatively new concept in HR technology These marketplaces have been used by Amazon and Ebay, connecting you to stuff you want to buy, and it's used by LinkedIn, Facebook, and even Tinder connecting you with with people you want to meet By TripAdvisor Air bnb and Uber connect you with places you want to go. So the kind of talent marketplace today is connecting people with opportunities for growth and learning and creating those connections for a Lattice type career development experience in their business.
- And the reality is today it's easier to find a job on LinkedIn. it's so easy for people to see, and they often don't see opportunities within their own business. As I mentioned previously hiring external is not a great idea, They cost more. You've got to look at your internal talent as your first strategy, some of the customers we work with have shifted their recruitment metrics from 35% of positions being filled internally to 55% with a talent marketplace and if we think about the recruitment savings of this shift alone – it’s massive, plus you’ve got more productive, more engaged employees that are more likely to be retained.
- We also found that talent mobility has a positive impact on retention, with 60% reduction in attrition. And this data is across our customer base of 90+ organisations including the likes of Johnson and Johnson and Facebook. But what we see across those organizations is that they deploy a Marketplace and they're getting a significant reduction in Attrition. So the average attrition rate before a marketplace is deployed is 24%, and this drops to 15% when you provide internal talent mobility opportunities. So a huge impact.
- Optimization is the new era. Best people, best fit, getting a high performance culture, making sure that you've got people that are really optimized to be able to fulfill their job. and optimized to me means they've got the learning they need, they've got the skills that they need. They are connected to that learning. They connected to mentors, connected to coaches. Everything that they need to be high performing.
- Talent technologies have shifted. We can't use the old talent management systems that were okay for last decade. And really we've been on a trajectory where talent technologies used to be all about employee records and then the workdays and the oracles and Successfactors's of this world, automated it and took it to the cloud. But really, we are entering the era of real time employee enablement, enabling them. So to be optimized to do their best work. When considering any talent system the key things to think about on the left ROI axis that you see on the slide, is how will it deliver you a bottom line benefit. How is it affecting your retention? How is it affecting your engagement? How is it impacting your workforce being reskilled for the future? How's it impacting the learning and resilience of your people. These really are key.
- And coming back to where we started where Josh bersin told us about the five imperatives, our talent marketplace at Fuel50 is personalized, human-centric, skills at its core that matches to those five imperatives.
- And We are changing the economics of talent in businesses by reforming the talent supply-demand chain Transforming the rate of attrition, with a 60% reduction in employee churn where Fuel50 is being used; While enhancing the value of talent, with organisations like Abbot as we have mentioned, being first to release a Covid 19 test, reskilling their global workforce of 110,000 employees at scale, with 375000 reskilling actions taken through Fuel50 in the prior 6 months to the release of the test. Our talent marketplace solution, Transforms the talent dynamics in organisations, changing the internal talent supply So this impact on our clients bottom line is also translated into business results.
- Thank you all for listening, I hope this gave you some valuable information to take away, please feel free to come by our booth today and feel free to connect with directly on Linkedin. Thank you very much