Preparing for the impact of the new talent economy in the digital age
The biggest challenge of the growing digital economy is building a digital-ready workforce in an ever-evolving business environment. To do so, any organization must start by filling the talent gap in technological skills, which is vital to digital strategy. Successfully acquiring, developing and deploying talent starts with a strategy that dictates what work will be done, how it will be done, and by whom.
Organizations need to create a compelling value proposition for talent, which includes training in acquiring new skills, development opportunities, as well as rewards. For leaders, retaining the human part in a growing digital world is vital for future success. It is clear that the digital age requires a range of different qualities from business leaders. The leaders who understand well enough how technology and people complement each other and create value will definitely be at the forefront of the digital transformation.
Today, leaders should be able to set a well-defined purpose and to inspire their workforce to efficiently aim at this common purpose and give them the independence to create more value. When the workforce has a clear, well-established purpose to deliver when they are motivated and inspired by leaders, they respond with higher levels of engagement and commitment, and they bring more creativity to work, shaping themselves and their organizations in ways that allow the latter to flourish in a digital age. All the aforementioned characteristics are rapidly becoming a vital aspect of the growing new talent economy.
The new talent economy
The fourth industrial revolution has a significant impact on socio-economic and demographic aspects, as it disrupts business models in almost all industries, which in turn creates major changes in the labor markets, leading to the emergence of new jobs, while partly or even entirely displacing others. Similarly, the skills demand required in both old and new jobs is also changing most industries and transforming the way people work.
This shift in job characteristics and the change in the skills demanded are growing at a fast rate, dramatically impacting the nature of work. The emerging different patterns of work, the diverse structure of employment contracts (including payment structures), and an increasing passion for flexibility are also transforming the current working relationships. As the world of work continues to transition, a new economy has been derived, the gig economy emerging as the main driver of this change.
Gigs are by definition not full-time and imply a workforce that lacks long-term commitment from the organizations. Working hours are unpredictable, with arrangements usually being highly-flexible and entirely dependent on the demand at any given time. The gig economy or freelance work has gained traction over the past years, especially within the young workforce, dramatically changing the traditional work dynamics.
Organizations operating in the gig economy usually use new online digital platforms that connect users directly, providing services by a more independent workforce, as opposed to more traditional employees. Gig workers, typically paid per individual task completed, are looking for high flexibility, more control over their own work, and like to work remotely in most cases, with minimal commitment to organizations.
Many gig workers, who earn income through online digital platforms, only do so for a few months a year. A common reason for this is the fact that a certain proportion of the workforce that has experimented with the gig work typically lands on conventional jobs given the fact that the economy tends to shift from time to time. In turn, this leads to the growth of the other new economies, such as the platform- and the sharing economies, even though the characteristics of these exhibit quite a significant overlap with those of the gig economy.
On top of this, the changing population dynamics in emerging and developed countries have led to a surge in the proportion of the young population entering the labor market. In turn, this contributes to urbanization and international migration, as many young people are starting their working lives in less secure and stable forms of employment.
Typically, young respondents prefer flexible work hours and find value in owning their work and getting paid for their completed tasks rather than the typical benefits of conventional forms of employment, such as stable incomes, upward mobility, and social benefits. As their participation in the gig economy and startup ecosystems continues to grow, many organizations are starting to turn towards the growing alternative workforce segment and to hire more of these workers.
One common aspect, irrespective of generations and workers type (i.e., whether independent or traditional jobholders or part of any demographic diversity), is the fact that the current and future workforce will have to become more proactive about managing their skills. This is so given the fact that expansive technological growth, interconnectivity, collaboration, and increased individual responsibility have started to transform the way we live and work.
The impact of and preparation for the new talent
The digital revolution is having a very significant impact on the workforce and on HR organization. Major changes include ongoing demographic, technological, sociological and cultural transformations. In this digital era, where technology is changing at rates faster than ever before, HR and business leaders should start streamlining business processes by collaborating and considering the best-suited work models for the workforces in respect to that.
In this digital era, the demand for talent is not just driven by the technological need; many organizations are transforming their business models, focusing on more customer-centric approaches, and proceeding with integrated digital operations, for which they need talent not only with the right digital skills but also with the ability to facilitate these changes and collaborate in more agile ways.
Today, the new workforce generation poses more challenges to organizations, in that their expectations of their employers and jobs are quite different from those of previous generations. Specifically, while the previous generations tend to place more value on security and tradition, new generations are more motivated by personal happiness, attaining aspirations, and recognition. Similarly, new generations expect higher flexibility, more adaptable career paths, a clear work-life balance, and a well-defined purpose.
The changing demographics and skill requirements in the talent markets make top talent virtually insufficient for organizations, and hence, many organizations are on the lookout for innovative ways to access talent. Many organizations are becoming more experimental, taking advantage of the increasingly complex and diverse talent ecosystem.
Organizations should establish a more successful, much wider and higher-quality talent pipeline by enlarging the existing talent pool, and by establishing paths of collaboration among themselves, which allow them to leverage talent ecosystems by sharing talent more effectively within and across organizations. This is similar to all fronts of talent management, such as talent acquisition, development, and retention. These communities are driven by collaborations, learning, networking, partnership, and many other factors.
Leveraging knowledge and personalization, aligning the employee value proposition, and syncing the employee’s purpose with the company’s vision, business strategy, and operating model are some crucial factors for the organizations to succeed in their transformative journey. Other than the value propositions, many agile and innovative organizations are developing new talent acquisition models that can reflect the current digital age by winning the talent war and progress towards success.
A successful talent acquisition model should be built on collaboration, sharing, and community-building strategy. The war for talent can only be won by adopting this new, collaborative mindset and embracing and leveraging the competitive advantage offered by the open-source talent ecosystem. Many organizations are already investing in their workforces when there is a matter of talent, and this investment becomes more effective once the organization has begun to understand the importance of human and social capital within that ecosystem.
The HR readiness for the future
In the new talent economy, HR leaders and professionals need to focus on helping the business understand the skills demand and preparation for the future and ensure to provide an astonishing experience for these workforces, so that they can to learn the new ways of engaging, continuous learning and development techniques, and encouraging collaboration with other people and machines. And all these need a new environment in which they can work, learn, motivate and grow.
Workforces are becoming more geographically diverse as younger generations of workers are moving to bigger cities and more developed countries for their work. In addition, we notice the rise of remote workers in the workforce landscape as well. All these certainly demand a well-articulated approach and framework for HR that facilitates its readiness for the new talent economy and future of work.
The above figure also describes the four main elements of the HR readiness to help organizations to prepare for:
- Providing a continuous learning and development opportunity to the employees in the organizations, by investing in different employee learning and development, cross-training, lateral moves, and internship programs.
- Adopting new mindsets, technologies, and skills to lead the way in the world of work, as the future requires both technical and social skills of the workforce.
- The demand for redesigning both business processes and ways of working, which need a sense of urgency throughout the job transformation and career development for the workforces.
- Start building a collaborative work environment for two different segments of workforces, humans, and machines, due to the high increase in the automation and augmentation of the human tasks and activities performed by machines.
HR organizations should expect these changes across the globe sooner or later and that should trigger more expectations for increased benefits, mobility, flexible work hours, and novel work possibilities. Due to the shift of changing skills and job transformation, the number of workers with different levels of skills is also going to change. And that needs some set of preparation and balance so that there can be a constant increase in employee engagement, retention and productivity.
New skill shortages are on the rise due to the rapid changes in technology and business landscapes, which prompts many challenges in terms of finding the right skilled worker for the organization. In turn, this creates instability in the labor market, especially if we include the job transformation landscape. The mitigation efforts that HR can do are largely dependent on the business leaders, as they are the ones responsible for their workforces.
There is a need for more partnering opportunities with learning institutions, to uplift more education and training for the needed skills. On top of this, offering more internship programs, getting stronger with the talent pools and contributing to workforce developments are also important factors for HR to consider.
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