Ever since Adam Smith demonstrated the economic benefits of designating specific roles in the manufacturing of pins in 1776, organizations have evolved, assigning employees specialized tasks within fixed organizational hierarchies. Today, digital technologies are disrupting entire industries and changing the way companies do business on almost every front.
Simultaneously, Millennials (who are becoming the dominant workforce segment) are challenging established relationships between employers and employees at a time when the demand for talent is far outstripping supply and the average age of the working population is increasing.To realize the potential of digitalization, companies must access talent with both the technical and behavioral skills necessary to deliver their digital strategies. (See “Digitization vs. Digitalization.”) This requires managing a redefined workforce that extends beyond traditional boundaries to include external talent.
In this new talent management rubric, managers should first consider skills that directly affect over-all performance. Technology is ever more modular and user-friendly, and it’s replacing basic tasks. To gain a competitive advantage in this digital-centric age, it’s critical that employers develop employees’ human skills.
Consider data scientists: Those in highest demand don’t just have the technical and digital skills to create datasets and build algorithms. They also have the ability to work with — and persuade — colleagues. While people who can identify opportunities are essential, their ideas are wasted if they don’t have the communication skills to make their new ideas broadly compelling. This is especially important given the fast pace of technological innovations and their spread into every corner of an organization.
Employees who interact with customers also need to improve their ability to influence, collaborate and cater to customers. Customer service that once was considered “nice to have” is critical for organizations to prevent their offering from being commoditized. Routine requests are being auto-mated, resulting in more accurate responses. And customers are becoming more hassle-intolerant, well-informed and well-connected. Their expectations will continue rising and jobs that once were delivered on the merit of technical excellence will be irrelevant if the job holder is unable to add a human touch.
These types of agile collaborations work better in flatter organizational structures than in traditional siloed hierarchies. To navigate less formally structured organizations, where roles are less rigidly defined and change rapidly, employees need relationship-building skills and the ability to operate and influence without authority across organizational boundaries.
Extended Talent Ecosystems
In many cases, businesses need to extend their workforces beyond their traditional internal perimeter. Currently, existing internal skills are insufficient for taking advantage of new opportunities: Just 34% of workers possess the advanced cognitive skills required to evaluate problems and find solutions using technology, according to OECD’s 2016 “Survey of Adult Skills.” The competition for digital talent is becoming white-hot.
Tapping digital talent via digital platforms is becoming compelling because of the greater flexibility it affords in the face of fast-paced change. It also increases efficiencies by better aligning human resource costs with business cycles. Extended talent ecosystems provide an opportunity for organizations to acquire key capabilities quickly, and then easily shift from those capabilities when a project is finished. Employment relationships are increasingly being formed and dissolved in a flash.
Because the importance of tapping rare digital talent is critical for success, employers must manage their external talent as systematically as their internal employees. HR strategies must be designed to apply more broadly. The days of first- and second-class corporate citizens and contractors will end. And the distinction between internal employees and the members of the extended talent ecosystem will blur as both share experiences while working together.
These new modes of project-based work may prove more fulfilling for people with digital skills; they can apply their skill sets in multiple settings in short periods of time and have the flexibility to balance work with other life goals. This is especially appealing to Millennials, who are less interested in rising through an organization’s hierarchical system and more interested in demonstrating their con-tributions by taking on increasingly sophisticated challenges, even in project mode.
Sized for Opportunity
As digital technology cuts down on the number of people needed to get existing jobs done, it’s widely assumed that companies will shrink their workforces. But if they’re successfully identifying new opportunities, the result may be a need for just as many — if not more — people. The first task is to build the capacity to create new digital capabilities and train employees to use them to deliver differentiated work.
The recent digitalization of services at several restaurants and fast-food outlets demonstrates a change that’s beginning to occur more broadly. In the restaurant example, digital interfaces take people’s orders and process payments, but the wait staff hasn’t necessarily been eliminated. Rather, they’ve been redeployed to focus on potentially more valuable customer services, such as keeping a closer watch on food readiness and paying closer attention to diners’ needs.
Doomsday prophecies of wholesale techno-logical redundancy have characterized periods of disruptive change since the time of Aristotle and have been famously referenced through the ages by Elizabeth I, Ricardo, Marx and Keynes. And the concerns persist, as evidenced by a 2016 European Parliament motion that states, “(t)he development of robotics and AI may result in a large part of the work now done by humans being taken over by robots, so raising concerns about the future of employment and the viability of social security systems."
Yet, workforces continue increasing: The U.S. workforce has tripled since Keynes first considered the “Economic Possibilities for Our Grandchildren” and forecasted — in 1930 — a 15-hour workweek. For organizations that tackle the head-on designing of modern day workforces,it’s likelier that the abolition of traditional divisions of labor will result in more productive,challenging and rewarding work.