Somewhere in the early 2000s, professionals in human resources began referring to a collection of standalone HR practices as a new function called “talent management.” This gave rise to a software category delivering applications such as recruiting, learning, and performance management. These systems were designed primarily to streamline the work of HR administration and redesign talent processes. They were built primarily to benefit the organization and, to some extent, the HR professional. Employees and candidates had to use these systems, but typically did so begrudgingly and as little as possible because they were cumbersome and difficult to use, having not been designed to provide much value to users. If you’ve ever tried to apply for a job through one of these early applicant-tracking systems, you know what I mean.
But the workforce of today has evolved, and so too must our talent management systems.
The Workforce of Today
Let’s start with the evolution of the modern workforce.
The combined effect of these trends is forcing organizations to start thinking of their employees as consumers and realize they can always go elsewhere. The workforce of today is made up of independent free agents who, like consumers, can make a choice every day to stay or leave. This is forcing the evolution of talent management systems. They cannot exist simply to automate and integrate HR processes for the betterment of the company, but rather need to engage and empower each and every employee and provide them value, not just more process. Organizations must have talent management capabilities that meet the needs of today’s workforce.
What’s at stake here? What can organizations expect to gain from recognizing the evolution of talent management and taking action? And what will likely happen to those that don’t?
Let’s take a look at two key trends:
Talent Shortages and Mobility Will Increase
In less than five years, there is a projected shortage of 30 million to 40 million college-educated workers. With the war for talent already well underway, expect talent shortages to get worse. Plus, the increasing number of millennials (those born in the 1980s and 1990s) in the workplace and the relative ease with which employees can find new opportunities are expected to dramatically increase job mobility. While baby boomers were likely to stay with a company for longer periods of time, millennials have no problem moving from job to job much more frequently.
Talent-Centric Organizations Will Have an Advantage
Candidates are shopping for their next employer like they shop for consumer goods. We are witnessing the consumerization of the hiring experience. With full transparency available through social networks and sites like Glassdoor, candidates can learn about a company’s reputation the same way they do as consumers. And if that reputation is poor, most will not work there. Glassdoor found that 69% of people would not take a job with a company that had a bad employee reputation, even if they were unemployed! Likely in a response to this shift, Deloitte found that 66% of HR teams are updating employee engagement and retention strategies to advance perception and satisfaction.
With a shortage of talent and more people moving jobs more frequently, organizations that invest in a talent-centric culture and systems that emphasize empowerment and engagement will have a significant advantage in attracting and retaining the best talent.
Organizations that do not will be at a disadvantage. They will struggle to innovate and grow their businesses without having top talent in place.