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Welcome to the talent crunch jungle

Welcome to the talent crunch jungle

IDC research consistently finds businesses that excel in a digital economy have made their talent pipeline a key competitive weapon. So why is talent management not a priority investment for Kiwi organisations?

Too often, talent pipelines are developed with a short-term tactical focus instead of incorporating the strategic long- term vision of the organisation

Louise Francis, IDC New Zealand

Everyone agrees, an organisation’s talent is its crown jewels. But dark clouds are looming on the horizon.

IDC’s surveys consistently reveal New Zealand organisations face a talent crunch, a dearth of skills for emerging technologies and a fight for talent retention on a global scale. Skill gaps delay projects, reduce productivity and inhibit innovation.

IDC’s 2016 C-Suite Barometer (in which 225 New Zealand organisations were polled) finds 34 per cent of the respondents identified a lack of relevant skill sets and managing talent was a top three concern for their CEO.

This is particularly acute in small companies (with fewer than 100 employees), where the rate rises to 40 per cent.

Yet, many organisations now see these challenges as the norm. In the same survey these organisations also indicated it was a low business priority, barely ranking within the top 10 and it is this complacency that is hindering them from addressing the issue.

Roadblocks ahead

So why are so many organisations telling IDC that this is not priority area of investment and that little time is dedicated to developing a pipeline for future digital talent?

While the challenges are too complex to untangle in this forum, here are five immediate roadblocks that are holding organisations back from addressing the looming talent crunch.

Organisations that focus on short-term skills requirements are being left behind by market leaders who have an eye on the skills of the future.

Louise Francis, IDC New Zealand

Inadequate talent metrics

Workforce talent metrics are still very rudimentary in New Zealand organisations. Over half are using only simple talent metrics based on traditional employee output metrics and less than a quarter are using a balanced scorecard approach. Focusing on employee outputs is no longer adequate in a hypercompetitive talent environment. Digital transformation is around business outcomes and impacting the external business environment. With talent now seen as a critical component of that ecosystem, HR metrics must reflect that status.

Workforce talent metrics are still very rudimentary in New Zealand organisations.
Workforce talent metrics are still very rudimentary in New Zealand organisations.

A myopic vision of the talent pipeline

Too often, talent pipelines are developed with a short-term tactical focus instead of incorporating the strategic long-term vision of the organisation. There is too much focus on the maintenance and incremental changes of current skills and roles instead of the workforce of the future.

Talent curation can be likened to tackling a bushfire. In a bushfire, burning bark and embers are sucked up by a convection column and carried by the wind to ignite new fires (spotting) far ahead of the fire, up to 20 to 30 kilometres away. Many bushfire 'spotting' models have now been developed to predict how fires will act under different conditions. With the current rate of change, technological ‘spotting’ will see organisations that focus on short-term skills requirements being left behind by market leaders who have an eye on the skills of the future.

Read more: ​'Digital journey is a team sport': IDC

The ‘ostrich syndrome’

Some organisations and employees prefer to 'stick their heads in the sand', rather than accept that the disruptions to the workforce will affect their role.

In 2016, the Pew Research Center conducted a study which found that two-thirds of people surveyed said that they believed that robots and computers will eventually do most of today’s jobs. But 80 per cent think this will not apply to their own job.

In previous technological shifts, such as automation in manufacturing and agriculture, it was blue collar roles that disappeared. This time around we are looking at white collar roles such as lawyers, financial advisors and analysts.

Some organisations and employees prefer to 'stick their heads in the sand', rather than accept that the disruptions to the workforce will affect their role.

Playing the ‘blame it on the brain drain’ game

Once upon a time working overseas was an adventure, a way to hone your skills and if you were lucky, make more money that you could back home. Now, the digital economy is a global phenomenon and within this market digital talent is the universal currency.

Those people with skills in hot demand are being bombarded with offers and opportunities to work with the best in the world – it is not so much a brain drain, but rather a suction pump.

The talent crunch goes beyond the organisation. New Zealand’s status as a leader in the digital economy is dependent on its ability to position itself as a lead player in the digital economy.

The chicken and the egg scenario

Many emerging technologies are not yet mature enough for organisations to commit permanent investment in skills or talent. The changing nature of technology means that it is all too easy to invest in skills prematurely, only to find that the second or third generation in the evolution of a particular competency requires an entirely different skill set or significant retraining.

IDC’s research consistently finds that businesses that excel in a digital economy have made their talent pipeline a key competitive weapon. If an organisation, and by extension New Zealand as a whole, is able to embrace this approach, attracting the right talent will become easier, customer interactions will be improved, and top talent is less likely to decamp for the competition.

To navigate the talent crunch jungle organisations must take steps to address the roadblocks listed above.

In previous technological shifts, such as automation in manufacturing and agriculture, it was blue collar roles that disappeared. This time around we are looking at white collar roles such as lawyers, financial advisors and analysts.

Implement metrics that matter, which can best leverage talent and improve organisational performance across the business ecosystem should be a priority. But equally important is the need to create talent spot fires by building a talent pipeline with right resources required to achieve long-term business objectives and the strategic vision of the organisation.

Ultimately, an organisation must facilitate a digital transformation mindset approach to talent curation for their future workforce.

Albert Einstein once said, “I have no special talents. I am only passionately curious.”

A digital transformation mindset is characterised by curiosity, risk taking, failure management, and the ability to deal with ambiguity. Ultimately it is this approach to skills curation that will help guide organisations through the talent crunch jungle, not a constant race to maintain the skillset status quo.

Louise Francis (lfrancis@idc.com), is Senior Research Manager, IDC New Zealand.

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Tags change managementskills shortageIDC New ZealandLouise Francistalent management

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