Thanks to the drop in oil prices over the past two years, the oil companies have to drop their fixed costs. Low prices force oil and gas companies to merge, declare bankruptcy. Employers have had to trim their workforce. In the state of Texas in United States, which is a hub of oil and gas companies, almost 100,000 direct and indirect jobs have been eliminated in the last two years. That means two out of three people have been impacted by the oil price collapse in the last two years. In such a scenario, people start to look for jobs in other industries where their talent will be portable.That is just what has happened. In Texas, the talent exodus from oil has been lapped up by solar energy. People are trading off the big bucks of oil industry for the stability (and somewhat lower pay of solar power companies). It also impacts future supply of talent because students who wanted to look for careers in the oil industry are now wondering how they can redraft their career plans. The baby boomers are retiring and the fresh engineers are not enrolling in colleges. As soon as oil prices bounce back even a little, the few remaining oil engineers will be auctioned off to the highest bidder. All in all, this seems to be a terrific opportunity for HR to rethink their scenario planning approaches for the talent.This scenario may play out in other scenarios as well. Can HR respond to the uncertain business canvas?
Continuous planning
The talent planning has to mirror the business scenario. If that has a high degree of volatility and impacted continuously by a mix of factors – political, economic, social, technological etc. Planning for talent must mirror the impact of the same set of factors. Business leaders must build in the talent needs for each choice they are betting in favor of. Talent planning in many organizations is an annual or at best bi-annual process. Making talent planning a daily process, there is a need to evaluate the mix of sources of talent. Not all talent must be owned by an organization. With Microsoft buying out LinkedIn, Cortana – the digital assistant will have access to all data from LinkedIn. HR can use Cortana to get information on candidates or even employees and their networks. That may in turn create new employment models and new categories of employees.
Shape demand
Zara has taken the lead on what is now called fast fashion. They turn around their store inventory at a rapid pace. This in turn seems to spur demand. The customer knows that if they do not buy what they like, they may never see that dress in the store again. By taking charge of shaping consumer demand, Zara is building a competitive edge and also building an on demand workforce with a portfolio of skills which they leverage on tap.Chicago-based StyleSeek, has built an online fashion recommendation platform that asks consumers to select from different images in several categories ranging from stylish front doors to beverages. Based on a consumer’s choices, StyleSeek creates a profile and recommends apparel options from more than 200 retail partners, including Macy’s, Nordstrom and J. Crew. StyleSeek feeds the demand data to the suppliers and thus in a symbiotic manner manage the fluctuations and redundancies that fashion houses are famous for.
Talent communities for commoditized skills
Every person has a pyramid of skills that they bring to an employer. At the top of the skills pyramid are niche skills that command a premium in the marketplace. Most of the people are employed based on their marketable skills – which is the middle belt of the pyramid. At the bottom of the skills pyramid are the commoditized skills (say base level coding skills) that literally armies of people have. This is the area that organizations have to periodically have to “rightsize”.What if every fresh entrant into the workforce is employed not by an organization but by an industry body (eg Nasscom employs all software engineers who have base level and undifferentiated skills). The member companies can farm out the work to be done by this pool. Think of it like work being allocated to a secretarial pool.These talent pools are being formed in many cases. Sites like GitHub are places becoming the new talent communities where people learn, teach and showcase their talent. What if GitHub consolidated all the jobs and allocated them to its members? This model could effectively de-risk an individual employer being saddled with employees they need to periodically need to shed fat from.
Conclusion
The business scenarios will need become more predictable. Hence being able to build a dynamic talent planning model (supported by predictive analytics and Big Data) run by an industry body (say CII or NASSCOM) can help build a skills inventory that its members can use. That will also encourage the individuals to upgrade their skills and stay employable. Digital technology throws open new possibilities. We are only limited by our imagination.——–Join me on Twitter @AbhijitBhaduriFirst written for People Matters, July 2016
