Insights from the AMS x JBC Innovation Board Meeting, October 2023

Every quarter, the AMS x JBC Innovation Board meets to discuss the key topics and trends in HR and talent acquisition. This quarter’s session was made up of senior talent professionals from the world’s leading businesses and led by Jim Sykes, Global Managing Director – Client Operations at AMS, and Josh Bersin, Global Analyst and CEO of The Josh Bersin Company.

Systemic HR and the future of talent acquisition

Josh Bersin began by highlighting the key takeaways from the recent Talent Connect and HR Tech conferences. He emphasised that the job market is under significant stress – with labour, talent and skills shortages, plus an aging global workforce coinciding with constant innovations in technology.

He explained that HR has seen many transformations over the years to re-organise and streamline staff numbers, centralise centres of excellence, and integrate technology to achieve better data insights to improve employee service. But, despite millions of pounds of investment, these transformations have been tactical and not necessarily strategic.

Recent research shows that companies now realise their HR efforts need to be more creative, innovative and solution focused. This is because so many new problems – including hybrid working and skills shortages – didn’t exist five years ago.

HR might in future be built around a consulting operating model rather than a rationalised service delivery function. It could then build and evolve products and services over time, supporting new onboarding programmes, reward programmes and much more.

To be effective, HR staff must know what each other is doing and work together. And a highly systemic HR organisation must have the right technology to harness up-to-date and accurate data. Through a more detailed understanding of what’s happening, better systems can be created to support HR efforts.

Bersin added that high-performing HR teams tend to move people around a lot within the business. This familiarises them with what adjacent teams are doing, so they can call the right people when they have specific roles to fill. This healthy process helps HR teams stay informed and respected, attracting more people to work in the field.

Lastly, Bersin spoke about the new ‘Welcome to the Post-Industrial Age’ report, which offers a view on where we are and where we’re going. The report looks at new approaches relating to the economy, the workforce, demographics and culture, and helps to put into perspective the changing needs of managing teams. It also covers the talent shortage and its impact on productivity, job design and agility.

Internal hiring rates have fallen

The discussion moved to internal hiring (the focus of the latest Talent Climate Series report, created by AMS and the Josh Bersin Company).

Year-on-year internal hiring rates have fallen significantly. After COVID, hiring went through the roof and companies couldn’t rely on internal hiring alone to provide talent. A drop in internal hiring rates was expected. However, this has not picked up in 2023. Many companies have reduced their hiring overall, but the lack of internal hiring is marked. The assumption is that, despite innovation in talent acquisition – such as automation and digital processing – it’s becoming harder to hire, not only internally, but in the general market.

HR is working on this, but the problem stems from management culture. Another research piece highlighted by Bersin suggested that many companies struggle to operate in a dynamic way. Large companies grow along certain lines: product area, business unit, function etc. People move up, not around, and a change in mindset is needed.

Senior leaders should also stop thinking that more people equals more revenue. Large companies are so used to simply hiring more employees; it’s in their DNA. But this approach might be slowing things down. Organisations need to think about retaining their way out of the talent scarcity problem. Just one career move internally is likely to extend the duration of an employee’s tenure by 60%.

One of the meeting attendees raised the issue of professional development and internal mobility. Employees felt that their careers could stall and it was easier to get a job externally than a new one inside the organisation.

However, another attendee did say that internal mobility in their organisation was increasing, although there was more they could do. They were supporting their employees to think about their future careers, but they lagged behind on how to implement that sense of professional development effectively.

The impact of AI

A key question raised by one of the panellists was how AI would affect job growth and talent acquisition.

Using a publishing business as an example to address this, Bersin explained that the speed of collecting data, assimilating content, writing and editing would increase and become more efficient with AI. However, he emphasised that businesses would still need professionals to interpret the information.

He also talked about engineering firms. These are overwhelmingly saying they no longer write their own code, but simply review it. AI tools are writing the code for them, so there’ll be fewer lower-level jobs for those who would previously have performed this task.

HR and TA can’t ignore AI. It’s a game-changer. Generative AI can be applied to business and create products and services that no one could create before. AI will continue to become a powerful tool for revenue generation, productivity and growth.

The right technology

Another key topic was technology. Businesses don’t have the technology to run internal, dynamic talent marketplaces. They may have talent, but the technology isn’t there to surface it. Subsequently, old habits kick in and business leaders hold on to their talent rather than moving it around, for fear they won’t get the right replacements.

One attendee did say that, by dedicating TA to internal recruitment, for the first time they now have more internal hires than external hires. Plus, they’re now working with a skills-based approach, so candidates that might not previously have been considered for certain roles are being put forward.

More focus on internal skills

Data shows that recruiters are spending more time looking for internal talent through the lens of skills than they have done. But, although everyone is evangelising about how a focus on skills can mobilise talent, businesses are struggling with this internally. Many are still trying to source talent based on job titles rather than understanding the skills they have in the business.

As one attendee said, “we’re in a scarcity environment, so people need to look at skills and tasks and assign people to those.” The danger is that recruiters are looking more and more at skills, but internal systems and processes are not ready to support a skills-based hiring approach.

The rise of adjacent skills

One of the biggest catalysts for mobilisation discussed was ‘adjacent’ skills.

For example, during the pandemic, there was an increase in contact-centre staff because people were returning so many of their purchases that there was a need for customer support. But the retail industry faced a significant skills shortage – until an AI tool revealed a 96% match with hospitality talent profiles. While this may seem an obvious choice as hospitality people are typically customer facing, nobody was connecting the dots.

Businesses need to look at adjacent skills not just across function, but across industries.

A change in management perspectives

Even with the introduction of new AI tools and skills-based approaches, management structures need to change. As one attendee put it, “it needs to be blown up, so everyone is talking horizontally.”

Attendees agreed that it’s impossible for an organisation to move into a skills-based talent marketplace or adjacent skills if the internal structure of HR remains siloed.

Be ‘problem first’

Talking about skills is simple, but implementing a skills-based approach is another matter. As one attendee said, “the trouble now is that there’s way too much focus on buying tools for skills. First you need to tackle the business problem.”

The solution is to arrange a management meeting in which key stakeholders can discuss their most significant business problems. Every skills problem is different and each one will have specialised needs and data sources.

The idea that a business can build a ‘global skills database’ is not really the answer. Addressing the problem first is essential.

Another panellist said that barriers to internal mobility can’t be narrowed down to culture, tech or process. All these things inhibit the ability to move people around. Businesses need to tackle all these areas, targeting one problem but not expecting to find one solution.

Mandating that team leaders have to let go of their best people and move them around is also crucial.

In attendance:

• Adam Hawkins – Head of Search & Staffing, LinkedIn for EMEA & LATAM
• Beatriz Rodriguez – Chief Talent and Diversity, Equity and Inclusion Officer, Bayer
• Emma Shuttleworth – Group Vice President Talent Acquisition, L'Oréal
• Jacqueline Welch – Executive Vice President and Chief Human Resources Officer, The New York Times
• Jim Sykes – Global Managing Director – Client Operations, AMS
• Josh Bersin – Global Industry Analyst and CEO, The Josh Bersin Company
• Juliana Nunes – SVP, Global Talent Acquisition and Global Services, Johnson & Johnson
• Martin Vergara – Managing Director, Global Head of Talent Acquisition, Morgan Stanley
• Mary-Anne Russell – Managing Director, Marketing & Sales Enablement, AMS
• Vicky Gallagher Brown – HR Lead, Deloitte

AMS x JBC: Innovation Board

The Innovation Board is co-chaired by Jo-Ann Feely, Global Managing Director for Innovation at AMS and Josh Bersin, Global Analyst and CEO of The Josh Bersin Company. The Innovation Board comprises of senior talent leaders from a variety of industries who gather to discuss key trends impacting the global TA landscape; identify the disruptions and potential innovations that can bring success to businesses and to individual’s careers. Using timely data, inputs from the latest market developments, and AMS proprietary data from the Talent Climate reports, the Board will gain insights from one another’s experiences and share solutions to critical talent gaps.