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Reinventing Talent Strategies

12 February 2024

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Story by
Matt Duncan Managing Director, Protiviti

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Matt Duncan, Managing Director of global business consultants, Protiviti says talent has become a critical element of organisational success in today’s risk environment and needs to be managed as such.

Protiviti and NC State University’s Enterprise Risk Management (ERM) Initiative published their 12th annual report focusing on the top risks directors and senior executives around the world are currently thinking about – and people-related risks were top of mind. 

The report, based on the results of a survey of 1,143 directors and senior executives globally, shares their views on the risks that are most likely to affect their organisations over the next year (2024) and a decade later (2034). Its findings highlight that there are multiple sources of uncertainty for HR leaders to be aware of, with continued economic uncertainty and geopolitical factors driving perceptions of key risks.

Across all survey respondents, the ability to attract, develop and retain top talent, manage shifts in labour expectations and address succession challenges ranked as the second highest risk for 2024. But organisations face a triple-edge sword when it comes to staffing and employment decisions. Economic conditions, including inflationary pressures, are decreasing margins and making hiring approvals come under increased scrutiny. Disruptive technologies such as artificial intelligence (AI) make leaders less sure of what talent and skills they need to attract for future requirements. And initiatives to embrace new technologies necessitate the need to reskill and upskill employees. These issues create a conundrum for employers, who are already facing rising labour costs. 

When looking a decade out, these executives felt this issue remained as the second-highest ranked threat they faced, behind the increasing shadow created by cyber threats. 

Climate change and being sustainable

Organisations also must consider how their labour pool can support the organisation’s need to demonstrate their actions and efforts to address climate change and other sustainability challenges. The growing focus on climate change and other sustainability policies, regulations and expanding disclosure requirements, as well as expectations of key stakeholders, rose from the position of 20th most significant risk in 2023 to 13th in 2024. Securing the skills to address this risk is paramount in leaders’ minds. 

The need to reskill and upskill employees is a challenge now and in the future. The sixth-ranked risk for 2024 is the adoption of digital technologies requiring new skills in short supply. This risk remains an issue over the next decade, ranking as the third most significant risk in 2034. Succession planning challenges also are shining a spotlight on the need to attract and develop the key talent required for an organisation’s strategic success.

Shifting focus on risk

An interesting revelation from this year’s survey is how quickly risks that have been top of mind for HR leaders during the last 18 months have significantly reduced in focus. Return-to-work trends and workplace evolution are less of a concern for HR leaders. Managing workforce demands to work remotely or as part of a hybrid environment fell from the ninth rank in 2023 to 24th in 2024, which may indicate that leaders feel more confident about their ability to address these challenges.

Culture-related risks also fell in relative importance. The perceived risk of organisational resistance to change when adjusting business models fell from the fourth-ranked risk in 2023 to the 14th rank in 2024. This highlights that whilst some risk areas remain consistent (e.g., attracting talent), others can disappear from the priority list quickly. 

Why do people work for you?

So, what should organisations do to address these risks? Initially, this depends on whether you can answer this question: ‘Why do people come and work for you?’ Our experience shows that organisations typically cannot answer this question in a consistent manner. The following strategies can help you be prepared to tackle this challenge now and over the long term.

Adopt a new talent mindset

To succeed in today’s talent marketplace, organisations must reexamine the way they recruit and retain talent. A successful modern talent mindset:

  • Focuses on skills and capabilities, instead of roles or jobs
  • Prioritises the value talent generates over its cost
  • Sources skills from a diverse and flexible talent pool that includes full-time employees, contract and temporary workers, expert external consultants and outsourcing providers
  • Looks beyond the Gen Z workforce, instead seeking talent across all generations to source skills aligned to future strategy
  • Treats leadership development and succession planning as a shared responsibility amongst all leaders, not just those in HR
  • Leverages a resilient and innovative organisational culture as a recruiting and retention advantage 

Understand your organisational starting point and make a plan

As organisational performance becomes increasingly reliant on the quality of people and teams, it is crucial to ensure the talent strategy aligns with the business strategy. 

  • Understand your organisation’s business strategy and develop a plan in that context. 
  • Take an inventory of your existing talent so you have a clear understanding of the skills and experiences you have on your team.
    • Map your existing skills and capabilities resources to the organisation’s short-, medium- and long-term goals. Understand the skills needed in the next six to 12 months and determine any gaps you need to close. This will allow you to develop a plan to address the skill gaps.
  • Implement rolling talent forecasts so there is a constant review. 
    • Understand the financial impact of talent scenarios and model likely surge areas of talent demand. Factor in likely increases in labour costs and strategic investments (such as investment in generative AI). 
    • Measure and report on open positions, skills and risk, and upskilling opportunities
    • Capture and report on DEI & ESG metrics that are relevant to your business objectives. These metrics will help leadership monitor organisational effectiveness, which is the extent to which the workforce is delivering on its organisational objectives.

Become crystal clear why talent should come and work for your organisation

Create a well-documented, well-communicated, widely understood Employee Value Proposition. Most organisations have a well-thought-out value proposition for their customers and clients, but today’s talent environment requires organisations to consider talent as the new customer. Competitive pay and benefits alone are no longer the answer.

Addressing people-related risks is no longer the sole domain of HR. The steps above should be driven at a leadership level within all organisations, with talent and retention and attraction established as a clear strategic priority. 

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