Market and technology trends, along with business processes, change the way organizations work, as well as the skills employees need to get work done. Never has the inability to react to those changes been so obvious as during the pandemic. Employees are asked to work in a more agile fashion, leverage new technologies and innovate while remaining focused on getting the job done.
But even before the pandemic, there was a need to fill existing and expected skill gaps in organizations’ workforces to stay competitive. A McKinsey survey found that roughly nine in 10 executives and managers say their organizations already face skill gaps or expect gaps to develop within the next five years. According to Deloitte’s Human Capital Trend Report, an estimated 90% of organizations will redesign jobs, and 54% of the workforce will require reskilling. These numbers suggest that organizations don’t have the talent they’ll need in the near future.
Mind the Gap
According to the McKinsey survey, the most common tactic to address skills gaps is still hiring new talent. This means, while already facing massive disruption, organizations are bringing new talent in to fill skills gaps. This approach is far from practical. Instead, organizations should focus their investments on workforce transformation infrastructure and identify ways to upskill and reskill existing talent.
Reskilling existing talent means retaining years of company culture, institutional knowledge and existing relationships within and outside of the business. If skills gaps are constantly filled with new hires, the power of a connected organization is lost in the shuffle.
Investing in reskilling is also more cost-efficient and results in greater business impact. The McKinsey study shows that reskilling is used as a tactic by 56% of respondents of a global survey. The seven out of 10 organizations that focus on reskilling report that the business impact has been greater than or equal to their investments. They also report increased employee satisfaction and customer experience.
Therefore, it is time to rethink how organizations handle disruption. Instead of hiring new people, they should focus on transforming the talent they have into talent they need. But, how can organizations transform their workforce and reskill their talent?
Let’s first define what workforce transformation means. Transformation is about people and processes. There are many definitions, but – at its core – workforce transformation is the shifting of a workforce’s talent, roles and functions — through its knowledge, skills and mindsets — to align with an organization’s changing strategic initiatives.
Transformational work is exciting, but it’s also disruptive. To be successful, it requires a systemic transformation framework and processes, such as collaborative design thinking. After all, while pushing boundaries and creating the workforce of the future, day-to-day business must continue. What might a transformation framework look like?
Building Your Transformation Framework
Transformation frameworks provide a systemic look at your organization. To strategically approach any transformation effort, first identify the areas of focus within your organization that will drive transformation. Examples include organizational effectiveness and processes, business and partner alignment, leadership development, talent management, and measurement and analytics.
Although you may choose only one or two dimensions, it affords you the opportunity to capture related issues. For example, an organization may focus on business and partner alignment and realize that they have related governance issues. Additionally, the work done by performance consultants directly impacts the learner experience; however, it is crucial to understand the fluid boundaries between the areas.
All transformation efforts should start with an in-depth intake process before diving into a current- and future-state analysis to create a transformation blueprint. With the blueprint in hand, you can start executing on it. You will systematically work through each phase, collaborating with key stakeholders and develop necessary outcomes in an agile manner. Let’s look at each of the phases in more detail.
It is crucial that organizations identify the overall goal of workforce transformation and align activities accordingly. At this stage, you are level-setting to understand the main players, identify objectives and possible obstacles, and create a document detailing areas of focus to complete in each phase in order to move forward in the framework.
Start this phase with an intent and clarity workshop to answer the following questions:
- What are you hoping to achieve with this transformation?
- What current challenges are you facing daily?
- From your perspective, why are we embarking upon this transformation?
- What are the consequences if we continue with the way we work today?
- What industry changes are impacting employees?
- What does success look like?
Ensure you align all internal stakeholders not only to get their buy-in but also to confirm that everyone is clear about which elements will be prioritized, what the initiative is all about and how to support the effort along the way.
Once equipped with the strategic direction, shift your focus to the current state of your workforce. During collaborative working sessions, take stock of the current state of your areas of focus. Returning to the performance consulting example, identify the current processes and documents used and uncover what works and what doesn’t. You can also leverage data sources to tell you more about the current state of your workforce. This could be as simple as human resources information and engagement data from technology platforms to understand where employees spend time or struggle.
Aside from a detailed current-state map emphasizing focus areas, another output of this phase is often several learner personas to better understand the worker and create a human-centric experience. Personas allow you to create a learner profile – including demographic information as well as offering a deep dive into what learners see, hear, feel, do and think. From there, you can identify pain points and learner needs.
During this phase, the emphasis is on the desired state you would like to achieve in your focus areas. It’s a continuation of the current-state map, and you start to envision the future. Continuing with the previous example, in a perfect world, what would your performance consulting function look like? And how would that affect the overall learner experience?
The output from this stage is a current-to-future-state map detailing gaps identified and high-level ideas of how to close these gaps for your focus areas. These high-level ideas will be developed further later.
Collaborative design thinking workshops are one of the best ways to envision the future. Start with your learner personas, and define the problem you want to solve for them. This is derived from the current-state map and is further defined with problem statements. These statements build the foundation for ideating possible solutions to help close gaps.
This stage is all about summarizing your findings and making recommendations to produce a blueprint for executing transformation. Take high-level ideas from the current-to-future-state map, and develop them further during collaborative reimagining workshops with appropriate stakeholders. Ideally, you also bring in employees directly affected by the upcoming changes.
It is crucial at this stage to bring in all stakeholders again, and present your findings and recommendations from the current- and future-state phases. Getting feedback at this stage will help with planning.
With the transformation blueprint in hand, select and prioritize various projects that you have identified to help your transformation efforts. This phase is highly collaborative, and you will achieve your goals through a set of working meetings and guided consulting conversations to drive decisions within your organization. At all times, you need to ensure that any decision-making is based on your organization’s overall objectives for transformation.
Every transformation initiative is only as good as its change management and communication plan. Disruption is high when it comes to transformational projects. Employees will see and feel changes every day, and they might worry about losing their jobs or being reallocated. A thorough change management effort will help alleviate some of this anxiety. Go back to the learners you have leveraged throughout this process. Make them your advocates, and have them help you communicate changes.
The last step in the framework is to execute your plan. This includes everything from building out training programs to instituting new processes, tools, templates and portals. It often includes a content strategy to identify what content can be bought, borrowed, bent or built. And, of course, it goes together with change management and communication plans to enable a smooth rollout.
Turn Talent You Have Into Talent You Need
Transformation analysis and planning can take up to 120 days or more depending on how many areas of focus you select. The execution can take even longer based on what changes you are trying to bring to your workforce. Nevertheless, the effort and investment can be worth it if it means you can continue building a connected organization. The workforce of the future is more than just people you hire off the street because they might have a skill you need. It is the future of your organization – the deep understanding of your organization and what it represents. Most importantly, it is the right employees that can help you achieve your overall strategic goals and objectives.