During this webinar, the Board Leadership Center was joined by Tania Pittoors, Head of People & Change at KPMG in Belgium, who set the scene for today’s conversation about the talent landscape and its related challenges. We then welcomed Professor Doctor Marion Debruyne, who shared her views and experience on the subject. Marion is the Dean of Vlerick Business School and Board Member at Ackermans & van Haaren, GUBERNA and Kinepolis. This article is a summary of the key takeaways.
The coronavirus pandemic is reshaping organizations and changing the way we work. Against this backdrop, it’s clear that people remain a key priority on organizations’ agendas. In particular, increased importance is placed on staying connected during this period of remote working and implied uncertainties. We have also experienced an acceleration of companies’ transformation journeys with a key focus on, amongst others, digital and automation. These situations create a momentum to think about Human Capital and the role of the Board of Directors.
Human capital – the knowledge, experience and skills of an employee – is a key resource to organizations and can be a source of competitive advantage, especially in a knowledge economy. So while talent management at an operational level is typically the responsibility of HR and the business, there’s a role for the board to play on a strategic level, ensuring that the organization’s human capital strategy is firmly on the agenda and incorporated into their strategic decision making.
According to a recent survey of CEOs, talent risk is the number one threat to long-term growth, rising 11 places from the start of the year. The workforce will continue to change shape fundamentally – with multiple generations on the work floor, increased automation, new skillset requirements, etc. – over the coming years, even beyond the coronavirus pandemic. Losing key employees and attracting specialized talent can have a critical impact on future business performance. Managing talent risk requires that organizations both focus on the now and the long-term future.
There are multiple ways to shape a workforce:
Remote working has widened the available talent pool, but it also poses a challenge. Employees are trying to embrace the new ways of working, while dealing with today’s situation and what the future might hold. Leaders need to keep their people feeling safe, while also keeping them connected, engaged, and productive. They need to maintain a focus on the employee experience and well-being, invest in new leadership skills to support the new ways of (remote) working and invest in their employees, e.g. with new (digital) learning content.
At the same time, the coronavirus pandemic has sped up the need for transformation in many organizations – in particular, digital transformation – as operating models come under pressure and need to be revisited. In turn, new skills will be needed. Upskilling and reskilling are critical for organizations and society to be productive – and ensure people’s employability and effectiveness. In fact, two out of three HR executives are prioritizing upskilling of the workforce to manage the impact of AI.
According to Marion, there will be sustained competition for attracting talent. Long, unchanging careers are nowadays an illusion; so both employer and employee have the responsibility to keep developing their skills.
There’s also an obligation on the employee’s part to demonstrate personal leadership, to take the development opportunities that are offered by management and to have a growth mindset – curiosity, open-mindedness, resilience, and resourcefulness. People’s willingness to learn continuously and their adaptability will be increasingly important attributes.
In a volatile, uncertain, complex and ambiguous (VUCA) world, we expect our human capital to continuously grow and adapt and have a natural curiosity for the new. These will be the skill-sets of the future, along with the courage to challenge the status quo and the ability innovate and ideate. To achieve and nurture this, though, leaders need to create the right context – the right culture – where:
CEOs believe purpose is more powerful and relevant than ever, with 79% having had to re-evaluate their organization’s purpose as a result of COVID-19, in an effort to better address the needs of all stakeholders. Around 1 in 5 go as far as to say that their primary objective is to improve society. They feel the expectation of the public to fill the void in bringing about societal challenges, as confidence and trust in governments decline. Beyond that, purpose also plays a critical role for people when deciding on their future employer.
The economy and society are linked – and as Marion pointed out – this link been brought more into focus by the current crisis. Companies, as economic actors, need to consider: ‘what is it that we bring to society?’
Beyond the known advantages that diversity brings – improved decision making and performance, a better reflection of society and thus better insight in customer needs, etc. – in the current war for talent, it’s a missed opportunity for organizations who do not leverage all of the available talent that there is.
Diversity is more than the measurable or observable characteristics – gender, age, race, socio-economic background, etc. – it’s also background, experience, personality, communication style, etc. Considering the diversity within an organization is only the first step; organizations need to be inclusive if they want to retain the people they hire. Giving people a seat at the table is one thing; ensuring they are heard and have influence is another.
There’s no one ideal board composition. Each board needs to prioritize the expertise and experience they need around the table. Here in lies the benefit of “T-shaped” people, i.e. individuals that have broad knowledge on a range of issues and in-depth expertise in one domain. Additionally, boards need to consider mindset; they need people who can manage uncertainty and balance flexibility and agility with resilience and risk management.
For Marion, three top areas of focus for board members’ continuing professional development are: digital strategy, strategy formulation under uncertainty, and “anything you’re interested in. Learning should be fun.”
Boards should regularly evaluate themselves – via self-assessment but also by looking at themselves through an external mirror. The discussion of board composition and succession – answering questions such as “do we have the right talent?” and “who else should we bring in?” – are then part of such an evaluation.
As for disclosures (of Human Capital Strategy), there’s recently been a greater general interest in more non-financial information, and for the standardization of this information to enhance the comparability and benchmarking of companies. What gets measured, gets done – it increases transparency and places issues of human capital higher on the board’s agenda.
The Board Leadership Center offers non-executive and executive board members and those working closely with them (including CROs and Heads of Internal Audit) a place within a community of board-level peers. It also offers access to topical seminars and more technical Board Academy sessions, invaluable resources, thought leadership and lively and engaging networking opportunities.