Generative AI is increasing volatility in business, making it more difficult to understand and enhance employee performance. In this article, I'll offer guidance on developing a skill-based workforce strategy that aligns talent to value, anticipates the impact of generative AI, and supports dynamic talent allocation.
The impact of AI will vary in roles, teams, workgroups, departments, and strategic goals within a company. When planning a workforce strategy, you must consider your company's unique situation. However, AI also provides better tools to understand the workforce, its development needs, and how you can align the resources you have.
AI can analyze your current skills inventory and compare them to the capabilities you need to execute your strategic plan.
As technology advances, AI and machine learning will replace some tasks. New, more skilled work will increase, driving more efficient allocation of human resources, where employees can focus on tasks that require human intelligence and creativity. We recommend considering a flow-to-work model with dynamic talent allocation, where you form skill pools to redeploy skills based on priorities.
Changing your talent strategy is a big step, so we recommend you investigate the process with your team..
AI will identify the skills gaps in your company and suggest upskilling and digital retraining programs. This helps your people prepare for the changing job requirements brought on by AI integration. It requires a commitment to development, which too often falls short. The MIT Sloan Management Review and Deloitte 2020 Future of the Workforce Global Executive Study found that only 34% of surveyed workers were satisfied with the investment in skills their employers provided.
AI can support new educational models that foster lifelong learning—critical when job skill needs constantly change.
You can build a future-ready work environment by identifying areas where AI and people can work together.
Generative AI, with its advanced natural language capabilities, extends the possibilities for automation to a much more comprehensive set of occupations. University of Pennsylvania researchers estimated that 80% of jobs can bring generative AI technology into work activities today. Roles and teams must adapt to changing job descriptions, skill requirements, and team structures.
Sandy Ogg, a former operating partner of the Blackstone Group, built his CEO.works consulting firm with the Talent to Value concept. McKinsey & Co. adopted the strategy and helps clients do the same.
The first principle is that workforce strategy aligns your talent where they will produce the most value. Most companies confuse this with succession planning, where they maintain a program to groom successors for the CEO and perhaps three or four levels down.
But you have critical positions and critical people throughout your organization. When you align them, your workforce isn't only skilled but serves in the roles that contribute to your company's strategic goals.
Dynamic talent allocation, often called rapid talent allocation, uses the flow-to-work principle to overcome talent gaps. It's the "rapid movement of talent among strategic projects as priorities arise and dissolve."
In the flow-to-work model, resource pool leaders match and deploy workers to projects based on priorities and the combination of skills required. This approach helps companies avoid inefficiencies caused by hoarding skills in specific parts of the organization.
By creating mechanisms to reallocate and redeploy talent based on developing priorities, you can rapidly respond to external changes, including shifts in customer or business demands. Forming flexible teams allows your people to tailor roles to match the required skills, with individuals playing different roles on different teams as necessary.
Changing the operating model this way isn't an overnight task. It requires mindset shifts and process changes. But this way of allocating talent has several benefits:
Note that this approach isn't best for stable teams like Finance and HR.
Think of the automation-first approach as allowing machines to handle repetitive tasks, freeing humans to concentrate on the creative aspects. So, let the machines take the grunt work, while you unleash creative potential.
According to McKinsey, a successful talent management strategy involves three elements:
By understanding these principles and anticipating the impact of generative AI, you can create a robust, skill-based recruiting strategy that ensures your company is ready for the future. Each company's journey will be unique—there's no one-size-fits-all approach to workforce planning in the age of AI.
If you choose to follow this journey, you can expect an exciting and challenging period of growth. By building your AI capabilities, you can reap the rewards of organizational speed and responsiveness, better talent development, and a fresh path to competitive advantage. In fact, "fast" talent re-allocators were 2.2 times more likely to outperform their competitors on total returns to shareholders (TRS) than were slow talent re-allocators.
It will mean changes to how you approach talent management and a new mindset about how your talent delivers value to the business. And it will deliver outsized rewards.
A company that creates a skill-based workforce strategy and institutes dynamic talent allocation, using the talent-to-value concept, should expect several positive outcomes:
Accelerate Organization Agility with Dynamic Talent Allocation
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