“The war for talent is over. In the Fourth Industrial Revolution, organizations will wage a new war – a war for talent development.” These were my concluding remarks when I delivered a keynote in a national congress for human resource management practitioners. I got blank stares as the audience was trying to digest what I said.
The audience’s reaction was not surprising. “War for talent” has been the mantra of many business executives that describes an organization’s drive to fiercely recruit and retain talent. The term was coined by Steven Hankin of McKinsey & Company in 1997, and in a book by Michaels, Handfield-Jones and Axelrod, which referred to it as strategic business challenge and a critical driver of corporate performance.
War for talent became more pronounced during the advent of the internet in the 2000s that gave rise to new business models in outsourcing and information and communications technology. In the Philippines, the rise and growth of the business process outsourcing (BPO) sector two decades ago made recruitment and retention a huge challenge. The dearth in the supply of talent in customer service, information technology support, and software development made recruitment a strategic imperative. Headhunting firms mushroomed, poaching talent from one organization for another. Companies maintained expensive recruitment firms and poured in advertising money in order to be ahead of others.
But in today’s world of rapid digital transformation and accelerating speed of technological advancement, the talent that companies are looking for are not out there. Skills in artificial intelligence, digital transformation, machine learning, data science, among others, are just in short supply. Hence, companies are struggling to keep pace with the global and tech start-up competitors and well as changing consumer preferences brought about by the younger generations.
That’s why we are ushering in a new era of war for talent development. This philosophy is about “build vs buy” approach to critical talent, as revealed by a groundbreaking study of Josh Bersin and commissioned by career transformation firm General Assembly. In his research paper “Rethinking the Build vs Buy Approach to Talent,” it found out that some of the highest performing organizations are internally building talent rather than buy.
Companies like Bloomberg, Guardian and Adobe, as case studies, have been building talent internally through a “capability academy” to develop skills internally. They realized that it’s “more cost-efficient and far more effective to build critical skills from within. And there are many cultural benefits as well.” Buying talent “can cost as much as six times more to hire from the outside than to build from within.” But talent development builds a “stronger learning culture and positive brand of internal development and growth.”
Corporate universities and capability academies are becoming a critical strategic action for many companies. These create customized programs, promote reskilling among employees, and ultimately build a learning culture that is needed in this age of digital transformation.
One local example I often cite is Unionbank. It has received accolades from international bodies on how it digitally transformed. But key to its transformation is talent development through its corporate academy. New ages skills such as blockchain, coding, design thinking, among others, are a common staple for employees to learn and reskill. But apart from learning velocity, i.e. how fast an employee learns, is learning density, that is, how much an employee learns. These has resulted in a learning culture that makes its employees as well as senior executives insatiably hungry for learning.
Technology is playing a crucial role in this war for talent development. Newer learning management systems enable adaptive learning anywhere and anytime, while delivering various content formats, from microlearning to supplementing traditional classroom training.
The war for talent development has begun. Organizations need to embrace this new philosophy in order to stay ahead in this competitive business environment. While recruitment is still an important HR function, talent development and a learning culture will be new sources of competitive advantage for companies in the Fourth Industrial Revolution.
The author is the chief executive officer of Hungry Workhorse Consulting, a digital and culture transformation firm. He teaches strategic management in the MBA Program of De La Salle University. The author may be emailed at email@example.com.