It’s Time to Rethink Talent Strategy

THE PACE and evolution of Artificial Intelligence (AI) and digital trends in the past few years has taken the business leaders by surprise. A recent global CEO survey by PWC finds that 70 per cent of CEOs expect their business models to be disrupted in the next decade. If business models evolve at such rapid pace in unprecedented ways, it’s high time that the CEOs and business leaders need to rethink their talent strategy to ensure that their employees can manage the complex maze of the skills transformation.

Unlike the past, where the expiry of a technical skill was at least a decade, in today’s age of AI, technical skills can change or become irrelevant in a matter of months and years. A highly-skilled professional could possibly become redundant in no time. Organisations cannot solve this issue by hiring new talent with new skills every time, creating a productivity conundrum, drop in engagements, cultural misalignments, risks, and an obvious impact on the bottom line.

The boards, CEOs, HR, and business leadership need to now treat talent strategy as a key business problem than look at it through the traditional lens of an issue in a support function. If not, it is likely that the organisation will have a demotivated, highly anxious, and unproductive workforce at a time closer than anyone would expect. A solution to this problem is the need for a futuristic talent strategy focused on twin pillars of reskilling and cross skilling.

Reskilling refers to transitioning employees to a new role different from what they have been doing while cross skilling is adding an extra functional skillset to an employee in a new complimentary area which could be relevant for the organisation.

Many business leaders are often reluctant or slow to make major investments in reskilling projects as they don’t realise the business case in this regard and view it from the prism of costs. While they acknowledge the skills challenge, many feel it could be a better option to let go of the redundant talent and hire new talent with the relevant skills. However, this is not a sustainable business strategy as the new employees can also have such skills issues in no time and your organization gets trapped in a vicious cycle of hiring and firing apart from facing a drop in productivity and bottom-line impact.

A study by the UK Financial Services Sector Commission (FSSC) finds that the organisation can save around GBP50,000 pounds per person reskilled when compared to costs and impact of letting them go and hiring a new talent. The costs of exit package for existing employees, cost of hiring, onboarding, productivity loss in the meantime and organisational culture alignment create far bigger financial and organisational issues.

— Dr Allen Baby is a HR thought leader and Chief Learning Officer at Emirates Institute of Finance. Views expressed are his own and do not reflect the magazine’s policy.

• Business Technology Review