World Economic Forum

Building a Workforce for Digital

Building a Workforce for Digital

Increasingly, companies must understand that the needs of employees are not all the same.

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Building a Workforce for Digital

At a recent World Economic Forum workshop on the topic of successful digital transformations, a group of executives passionately debated the challenges of managing their most important resource, human capital. The participants ranged from major global retailers employing everyone from store clerks to AI gurus, to Silicon Valley tech companies, and even a start-up about to open its European headquarters.

All face the challenge of building a digital-ready workforce in an ever-evolving business environment. To do that, they agreed, any company must get two things right. First, they have to fill a clear talent gap in technological skills vital to digital strategy. Second, they must develop the 80% of their workforce already in place today who will still be there tomorrow.

The war for talent is not new, but the workplace is changing (see Figure 1). Employees today increasingly demand more than a paycheck. They want to believe that their work matters, to be part of a culture that fits their values, and to be engaged and inspired by their jobs. At the same time, companies have changing needs as well. They want to operate in a nimbler fashion with a more fluid, flexible workforce, and they need employees with contemporary skills. Talent strategy needs to balance the needs of both the employees and the employers.

Figure 1

Digital technologies have changed the needs of both employers and employees

Digital technologies have changed the needs of both employers and employees

Successfully acquiring, developing and deploying talent starts with a strategy that dictates what work will be done in-house (rather than by partners), how it will get done (by people or technology) and by whom (full-time employees, contractors or partners). Next, companies need to create a compelling value proposition for talent that includes training in new skills as well as development opportunities—a New Deal for Talent. This new deal isn’t just about training and development, but also about rewards: financial, developmental, and tied to mission and purpose. From there, firms can design modern talent management systems that smartly integrate digital tools to identify, recruit, engage, compensate, deploy and develop talent.

The group had a robust discussion about what motivates modern employees and what type of “deal” is required to attract and retain them. To appeal to the best and brightest, do you need to offer nap rooms, free lunches, a Foosball table and a corporate mission to save the world, or will a steady paycheck suffice? The answer likely varies significantly by sector, generation and skill set, but some themes are emerging.

Today’s employee still values security, predictability and status, but the form those attributes take is changing. Security becomes less about lifelong employment and more about lifelong employability, achieved through constant acquisition of new and relevant skills. Employees are not giving up predictability, but their timelines are shortening and their willingness to experiment in different roles and functions is growing. They do still value status in the form of fair compensation, benefits and rewards for outperformance, but in today’s flatter organizations, that status often comes from increasing responsibility and impact, rather than a march through a hierarchy of job titles.

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These changes create a new set of challenges and opportunities for employers. A renewed emphasis on development will likely entail investments in training, apprenticeship and cross-functional rotations. Employers will benefit from creating strong, clear links between employees’ work and the purpose it serves. New systems reflecting these changes will need to be developed. Pay, for example, was historically keyed to things like revenue growth and profitability targets, both based on what an individual or team had accomplished. Now, different metrics must capture an individual’s contribution to a cross-functional group, or, in some cases, to nonquantifiable goals that span the entire company.

A big idea emerged from the conversation, that increasingly, companies must understand that the needs of employees are not all the same. Employee “segments” likely exist in the same way that customer segments do.

In the customer realm, we have moved to mass personalization down to the individual “segment of one." We anticipate customer needs, rather than simply react to them. Why can’t we apply the same logic to our employees? Can we identify unique needs among our employees and differentially serve them—offer individualized learning plans, tailored recruiting messages, even personalized rewards? Can we apply the same types of data and tools we use with our customers to our internal talent?

HR executives have already begun moving toward this nuanced approach. Recent research led by our Bain colleague Michael Heric found this group using sophisticated digital tools to fine-tune their understanding of each employee and improve career management, career planning and performance measurement. 

Greg Caimi, who leads Bain's Digital practice in the Americas, explains why businesses should focus on getting current personnel to reach their full potential rather than just hiring talent from outside the organization. 

In talent acquisition, digital technologies can personalize the experience of recruiters and candidates while expanding the talent pool, filtering for candidates with the right skills more effectively and helping identify future talent needs earlier. In workforce planning, it helps identify ideal team compositions and enhance collaboration among team members. In performance management and motivation, technology helps identify the metrics that truly matter for performance, and supports continuous feedback among employees, their peers and supervisors. In the realm of learning, it pinpoints training needs earlier, and improves reach, engagement and information retention through hands-on, accessible methods.

Early results of applying data-driven insights to talent management are strong. Studies have found machine learning can be up to 17 times more accurate than other methods at predicting who will resign, for example. Natural-language processing has helped recruiters at Johnson & Johnson, Atlassian, Twitter and other companies improve the quality of their job listings in order to enhance the inclusivity of their workplaces. Google’s dedicated People Analytics team is working on a wide range of challenges, from determining the best size and shape of a given department to reducing defections after maternity leave.

Companies creating a digital-ready workforce may find that the digital technologies that have forced them to consider new approaches to talent management become an important part of how they solve the talent challenge. We have only scratched the surface of what is possible.

Greg Caimi leads Bain & Company’s Digital practice in the Americas and is a partner in the firm’s San Francisco office. Ouriel Lancry coleads Bain’s Global Digital practice and is a partner in the Chicago office.


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