Technology and Job Creation
At Grayline, we have long been focused on the changing nature of work, with a specific focus on how emerging technologies are creating labor displacement in various sectors. There are many dynamics to this discussion, but most of the attention-grabbing headlines have focused on how to solve problems associated with large bodies of out of work individuals–think truck drivers in a world of autonomous long-haul trucking. This is the root of universal basic income, robotics taxes, and a variety of other concepts designed to solve for excess labor capacity.
It is fascinating to see that the inverse is happening–unemployment rates are near historical lows and technology is creating more jobs than can be filled. If the recent Gartner’s Emerging Risks Survey is anything to go by, organizations around the world may have to brace up for the challenges ahead with global talent shortage now a top emerging risk. The latest Job Market Report by Glassdoor also echoes the same thing. According to that report, employers are finding it increasingly difficult to find qualified talents to fill open roles. And this is despite a 3.5% increase in job openings.
This dynamic is driving organizations to think about human capital management and employee training programs differently. The recent 2020 Global Talent Trends study by LinkedIn revealed that about 70% of organizations are already putting programs in place to boost internal recruiting. The old model of ‘prehire to retire’ is being phased out gradually. More companies are now looking inwards for their talent and skill needs. The future of work, as it seems, may be based on the facilitation and development of internal mobility.
The $8.5 Trillion Talent Shortage
A recent Korn Ferry report that involved an extensive analysis of the global talent market revealed that by 2030, 85 million jobs will be unfilled. And this is not because robots will take them away; but because there won’t be enough skilled people to perform these roles. The authors of this report anticipate that this could cost the global economy as much as $8.5 trillion in unrealized revenue if left unchecked. According to this recent Korn Ferry’s ‘Future of Work’ series, Future of Work: The Global Talent Crunch, much of this shortage has been attributed to simple demography, among other things.
The Wall Street Journal reported that there were about 918,000 unfilled IT roles in the US within the three month period before October 2019. The US, for instance, may lose its position as the topmost leader in the tech industry by 2030, according to other reports. This could also cause as much as $162 billion in revenue loss unless businesses in this industry find a way to fill the high-skilled tech roles that would be opened up with equally high-skilled tech workers. The recent iCIMS report revealed that it took about 66 days on average for companies to fill a tech role in 2019, compared to just 55 days in 2016. That report puts the daily revenue loss of each day of vacancy at about $680.
Training and Internal Mobility
Internal mobility is one approach that many organizations are taking to fill these talent needs. While employers continue to compete for scarce but similar talents in today’s hyper-competitive labor market, rethinking your approach to talent management should be a priority. A cost-efficient way to go about this is to solve the problem from the inside, and in many cases, companies are finding that the best way to fill these gaps is from within the organization.
Prof. Matthew Bidwell of the Wharton School of the University of Pennsylvania published “Paying More to Get Less: The Effects of External Hiring Versus Internal Mobility”, a research work on career mobility, sometimes in 2011. Although a lot has happened since then, four key benefits were identified with career mobility. These include;
- A significantly reduced cost of hiring.
- A higher guarantee of a better initial performance of internal hires compared to external hires.
- The reduced possibility of internal hires to get fired or leave the job voluntarily, compared to external hires, and;
- The possibility of internal hires to get better performance ratings, compared to external hires.
The case for internal mobility has always been strong and still is. In the face of today’s global talent crunch, career mobility will help organizations find qualified talents to fill open roles in a less expensive way that still guarantees better performance. Fortunately, many organizations are already taking advantage of this.
Developing a winning talent mobility strategy can help provide a competitive advantage for your workforce. According to a publication by Delloite on The Organization of the Future, having the right job architecture can help you drive transformation as far as recruiting, structuring, developing, engaging, rewarding, and retaining top talent in the modern workplace, are all concerned. By simplifying complex and outdated job architecture frameworks, organizations will find it much easier to spot the next opportunities within the company.
In addition, there’s also a need to create a set of skills assessment and development planning tools and programs for employees and managers within the organization. There should also be an emphasis on instilling a culture of internal growth and mobility within the organization. According to Rado Nikolov of IBM, achieving a win-win for your organization and employees with internal mobility starts with setting the right foundation. This involves allocating resources, communicating the purpose of the program to both employees and managers, as well as assigning someone or a team to take ownership of the program.
Furthermore, there should be a critical assessment of talent and skill areas of need, along with the identification of possible opportunities for internal career growth. There should also be a skills audit so you can understand the gap that will need to be bridged with new hires and upskilling.
Additionally, employees also have to be aware of internal career advancement opportunities open to them. They should be able to get access to personalized coaching as well as learning and development resources. The approach to internal mobility programs should be long-term rather than short term plans to fill certain currently open roles. Such a program should also be regularly reviewed to ensure the program yields results that are in line with the company’s goals in relation to internal mobility.
There are many ways that building an internal mobility program will benefit your organization. On the one hand, these programs help your workforce build its capability and productivity for the challenges ahead. On the other hand, they help create a win-win for the employer and employees as it will help employees remain happy while helping organizations remain competitive in an increasingly competitive job market. This, as it turns out, will prove vital for not just the current recruiting challenges but even more for what lies ahead.