The CHROs of the future talk with data, not gut feeling, says Bersin’s SVP of Research
At UNLEASH America 2024, we sat down with Kathi Enderes to get the inside track on the latest skills research from The Josh Bersin Company.
Expert Insight
Leading HR analyst Josh Bersin and his team were on-site in UNLEASH America 2024.
We sat down with SVP of Research Kathi Enderes to unpick The Josh Bersin Copmany's latest skills research.
Read on to discover the key to becoming a skills-first organization - yes, your CHRO is key, but so are the right tech tools.
The era of hire to retire talent management is over.
Skills, not jobs, are the currency in the current world of work – companies are in a war for skills, and are grappling with a very demanding labor market.
For The Josh Bersin Company, the key to success in navigating this new skills-first future of work is to become a so-called ‘dynamic organization’.
These companies are 20 times more likely to have a productive workforce, three times more likely to exceed their financial targets, nine times better at attracting talent, and their retention rate is 31 times higher than average organizations.
At UNLEASH World 2023 in Paris, we had the pleasure of digging into the dynamic organization research with The Josh Bersin Company’s SVP of Research Kathi Enderes.
Just a few weeks ago at UNLEASH America 2024, we caught up with Enderes to dig into a new report that leans into the skills element of dynamic companies.
“When you think about how an organization becomes more dynamic, more agile, people being locked into very narrow roles doesn’t work anymore”, Enderes shares. In reality, job descriptions that people were hired against very quickly become obsolete.
While only 7% of organizations are deemed dynamic by The Josh Bersin Company, “most organizations and HR teams are trying to get their arms around” skills-first approaches – but it is much easier said than done.
According to the data, the secret to success here is technology, and specifically a new breed of AI-powered tools.
From talent management to talent intelligence
A major challenge for organizations, according to The Josh Bersin Company’s research, is that many tech vendors built HR platforms around jobs, job descriptions and recruitment.
This means that in a skills-first era, these tools aren’t always up to scratch – they struggle to support internal mobility and to help organizations close skills gaps.
Instead, organizations need what The Josh Bersin Company calls enterprise talent intelligence platforms.
Examples include Eightfold, Gloat, Lightcast, Seekout, Draup, Fuel50, Degreed and Phenom.
They use AI to capture employees’ skills by “understanding what roles you have been in, what organizations you have been in, and then suggest where a good next move would be for you, or maybe suggest a mentor or suggest a project internally for you”, explains Enderes.
All of this means that rather than always trying to buy in talent to fill skills gaps (which won’t always be possible), organizations can embrace internal mobility and find those skills amongst their existing workforce.
For Enderes, one example of a company succeeding in their dynamism and their use of a talent intelligence platform (Eightfold) is bottling company Coca-Cola Europacific Partners.
“What they’ve done with skills blew my mind” – they focused on just 100 skills for their operational employees and allowed people to add just five to their profile (these were the five most important skills).
This allows them to match supply and demand, and figure out how to transform the jobs and roles that are no longer relevant to skills necessary for the organization’s future success.
Using skills to drive pay equity & leadership development
Internal mobility is one of the case studies for these enterprise talent intelligence platforms, but it is far from the only one.
In her UNLEASH interview, Enderes picks out a few more. The first is “identifying the leaders of the future” and bringing succession planning into the 21st century.
Currently, succession planning can be very biased, and be about who you know (not how competent you are).
But, according to Enderes, if you make it about assessing the skills of people further down in the organization, you’ll make sure that you have the best talent pipelines all the way up to senior level.
A brand that is a doing great work here is American coffeehouse Starbucks.
Enderes shares: “One of their most important roles is store manager, but it is very hard to find good store managers; there’s lots of turnover, it is a very complex job.
“They are using talent intelligence to see the profiles of people further down in the organization”, so they can “place these store managers from within, rather than trying to hire them from another chain or something”.
The final case study, and it’s an important one, is around pay equity. This is a huge topic currently, as there are laws coming into effect in Europe, and other geographies are also getting hot on equitable compensation.
“For pay equity to work best, you’ve got to not just think about the pay side, but equity in the whole organization,” notes Enderes.
If you address pay equity as it stands now, “then next time you hire somebody, the next time you promote somebody, then you can introduce inequity” once more.
According to The Josh Bersin Company, “the best way to think about pay equity is think about the skill sets of people – when you look at skills you’re not being biased based on gender, ethnicity, age” etc.
The golden ticket here is to pay for skills, and to use talent intelligence tools to help here. These technologies can not only help identify skills, but help to benchmark what the wider market pays for certain skills.
One company leading the way here is German tech giant SAP – “they take pay equity very seriously”.
There used to a 10% cap on pay rises linked with internal moves, but SAP got rid of that “because if you’re moving from marketing into data science [for example], and we would pay twice as much in the outside market, you’re going to get twice as much, you’re going to get fair market pay for that job”.
This approach also rewards internal mobility, and ensures organizations remember they’ve already got great talent – remember, your existing employees “already know your organization and your customers; they have relationships, they know how things work, they know your culture”, concludes Enderes.
CHROs need to be business leaders
The Josh Bersin Company’s dynamic organization research talked a lot about the crucial role of the CHRO in this new breed of company.
CHROs take over from CFOs and CIOs as the core C-Suite role, and in many cases become second in command to CEOs.
Enderes shares: “All CEOs see now that everything is transforming rapidly – the labor shortage is severe in every company. Who can solve for that? The CHRO; they’re right in the middle of all of this.”
This new research builds on this and hints at what defines all high-performing CHROs.
They are not just HR leaders, they are business leaders – they measure HR’s success by business outcomes, not just HR metrics like decreasing time to hire.
This links with the interesting profile of these high-performing CHROs – they often don’t come from HR backgrounds, and this gives them “the business savvy that they need to be a business leader”.
In addition, with the help of talent intelligence systems, they are becoming more like CFOs and CIOs in talking with data and insights, not just gut feeling.
In conclusion, Enderes’ top takeaway for HR leaders and employers on becoming dynamic, skills-first places to work is “don’t try to boil the ocean”.
There’s a lot you can do, but focus on your biggest problems, your biggest opportunities, and then build from there.
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Chief Reporter
Allie is an award-winning business journalist and can be reached at alexandra@unleash.ai.
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