Gartner for HR

Reinvent
Talent
Strategies
The digital-age mandate for HR

EDITED BY
Brian Kropp, Group Vice President, Gartner

© 2019 Gartner, Inc. and/or its affiliates. All rights reserved. CM_567207
Introduction
How to reinvent talent strategy to support
digitalization
Eighty-seven percent of senior business leaders say digitalization is
a priority, and they are looking to human resources (HR) leaders to
develop the digital expertise they need to drive enterprise ambitions.
But as heads of HR try to realize the promise of digitalization, many are

87%
confronting skills gaps in their workforce today — and a run-of-the-mill
needs analysis won’t begin to address the skills gaps of tomorrow.
The tactics that HR has long used to build and buy talent are
faltering. Only 21% of HR leaders agree that current build-and-buy
approaches are helping them adjust to the demands they are facing.
As HR leaders spend more money, time and effort on seemingly
ineffective strategies, skills gaps continue to widen, and hiring costs
and time to fill are rising. of senior business leaders
HR needs a more effective way to develop employees and a talent say digitalization is a priority
acquisition strategy that is responsive to the rapidly evolving needs
of digital business. Also needed is a deliberate plan to foster innovation
to drive digital business performance.
Gartner research reveals new and more effective ways to build
and buy talent and foster innovation. Those strategies together

21%
form an approach that is agile and scalable for the digital age —
creating enterprise value today while positioning the organization
for tomorrow.
For most organizations, talent is the single biggest overhead expense
and the biggest competitive advantage, so optimizing talent strategy
is critical. To do so, HR must also leverage analytics.
Many in HR already use labor market intelligence to inform talent
strategy and tactics, but there’s the potential to go even further — Only 21% of HR leaders say that current
to educate the business about what it needs and use data to compel build-and-buy approaches are helping them
action on key issues, including whether to buy or build talent and adjust to the demands they are facing
where best to find and situate that talent.
Contents

CHAPTER 1 CHAPTER 2 CHAPTER 3 CHAPTER 4

4 9 14 19
Reskill the Adopt an Agile Foster Leverage
Workforce Recruiting Model Innovation Analytics
CHAPTER 1

Reskill the
Workforce

Reinvent Talent Strategies 4


Imperative: Keep pace with shifting
skill needs
Do your employees have the skills they need for their
current roles and their future careers?
One in five employees say they don’t
70% say they haven’t even mastered the
skills they need for their jobs today
20% On a more macro level, 20% of skills
will be irrelevant in 3 years
Reinvent Talent Strategies
Reskill the Workforce
Two of three HR executives agree they are less certain now than in the
past about which skills employees need.
Skill gaps persist despite HR’s extensive commitment to continuous
learning and upskilling that is being driven by the demands of the
business. In fact, our research shows that the current approach to
building continuous learners is actually decreasing skills preparedness —
by as much as 22%, thus hindering employees’ ability to keep pace.
The approach that most organizations are taking to create continuous
learners is, in fact, creating disconnected learners — disconnected
from the market skills required for success, from the organization’s
needs and from the skill development opportunities they require.
How can HR instead develop learners who are more connected to
their own skill needs and development opportunities — and those
of the organization?
5

Action: Champion a “connected” learner approach
To build connected learners:
Take a market-driven, predictive
approach to skills identification.
Don’t: Just rely on conversations with
business leaders, who look internally
but often lack the big picture.
Do: Gather more objective, expansive
and ongoing data on shifting skill needs
by diversifying the inputs used for
needs analysis.
Tip: Determine the most pressing skill
needs in a broader way to forge a closer
connection between employees and the
market. (For information on how analytics
can help determine market-based needs,
see Chapter 4.)
Reinvent Talent Strategies
Challenge employees to be more.
Don’t: Let employees become disconnected
from the organization’s development
needs as they focus on their own career
development.
Do: Demonstrate to employees how they
will grow personally by developing the skills
that the organization and the market need.
Tip: Continue to heavily communicate
business needs, but target 70% of
your communications to employees
as individuals.
Reskill the Workforce
Connect employees to skill-building
opportunities beyond their roles.
Don’t: Just curate new learning content
and provide self-service development
options, which can be overwhelming
and unfocused.
Do: Broker learning experiences to
accelerate new skill development and
connect employees to cross-organizational
and even extra-organizational skill-building
opportunities.
Tip: You can also encourage employees to
use real-life applications to develop the skills
they need.
6
 Reskill the Workforce

Benefits: Greater skills preparedness,

higher performance and engagement
Gartner research shows that building connected learners boosts
different elements of skills preparedness by 28% – 39%, and delivers
other benefits to employees and the organization.

How Connected Learners Outperform

… are 8 times more likely

to be high performers

… are 4.2 times more likely

to stay in the company

… are 66% more engaged

… learn skills 25% faster

n = 7,101 employees
Source: Gartner 2018 Shifting Skills Survey

Reinvent Talent Strategies 7

 Reskill the Workforce

Example: Citi uses micro actions to

nudge self-improvement
Citi developed a comprehensive #BeMore campaign, designed to
more closely connect its employees to the purpose and value
proposition of the global financial institution. A key plank of the
campaign is highlighting the personal benefits of upskilling — framing
development messaging to relate to employees’ environments and Daily 10 minute
experiences while focusing on career and personal growth.
“micro-actions”
Citi then goes one step further and activates employee
development via daily, 10-minute “micro-actions” geared
toward specific self-improvement. For example, the company
initiated a 30-day development challenge that prompts
employees to reflect on aspects of their career while seeking 30-day development
feedback from colleagues. These micro-actions are effective
because they act as quick wins for employees.
challenge
The company also incorporates peer-to-peer connection in most
of its development actions, using community connectivity to
heighten employee accountability as well as value.

Reinvent Talent Strategies 8

CHAPTER 2

Adopt an Agile
Recruiting Model

Reinvent Talent Strategies 9

 Adopt an Agile Recruiting Model

Imperative: Be more than a hiring service

When entire industries and business models are being disrupted, and every organization is in a race
to compete, business planning no longer happens on a regular cadence — and business leaders don’t
always know what their talent needs will be.

Among today’s recruitment challenges ...

More volatility in hiring volumes: Sharper peaks and valleys in the
number of new requisitions opened per month
Rapidly evolving needs: In marketing, for example, yesterday’s web
analyst is today’s digital strategist is tomorrow’s … what ...?
Median time to fill is rising:
Recruiters have to handle a more complex mix of requisitions:
More specialized and unfamiliar requirements than ever before
20%
of current requisitions are for roles with which
recruiters are unfamiliar

72 days in 2018
38% longer to fill unfamiliar roles
67 days in 2017

58%
of heads of recruiting have difficulty acquiring
61 days in 2015 talent to maintain current business activities
How can HR be more than a responsive hiring service for
business leaders?
64%
of heads of recruiting have difficulty acquiring
Offer them guidance and agile leadership that’s highly attuned talent to support a change in strategy
to the changing needs of the business and industry.

71%
of recruiting organizations recruit for more
specialized roles than they did five years ago

Reinvent Talent Strategies 10

 Adopt an Agile Recruiting Model

Action: Lead talent acquisition for

the enterprise
Your function may have become best in class at delivering a hiring
service to the business, but that recruiting service model isn’t
responsive enough to the fast-changing needs of digital business.

Instead, adopt an agile recruiting operating model:

Move away from fixed planning
and resourcing.
Regularly source bottom-up hiring
projections, and adjust service or redeploy
staff as needs change. This is a shift from
today’s approach of planning and allocating
recruiting resources based on point-in-time,
top-down forecasts from the business.
Focus on talent trends, not current
business needs.
Organize recruiting staff to create enterprise
value through task and talent-segment
specialization. Don’t be tied only to the
internal needs of the business.
Develop more sophisticated
predictive talent analytics.
Identify what you need, where best to find
it and what it will cost. Use those insights to
demonstrate to the business what it needs,
instead of just going to the labor market with
the business’s requests. (See Chapter 4
for more on predictive analytics).

Reinvent Talent Strategies 11

 Adopt an Agile Recruiting Model

Benefits: Lower hiring costs and time to

fill, higher recruiter productivity

Agile recruiting response meets today’s key acquisition challenges

Accelerating Fast-Evolving Expanding

Volatility Hiring Needs Requisition Mix

Continuous Planning Predictive Hiring Process Talent-Focused Design

• Recruiting-led, bottom-up • Candidate-centric, not business- • Staff aligned to talent segments,
hiring forecasts defined, opportunities not business units
• Flexibility through pooling, • Market-driven, not requisition- • Specialized roles, not end-to-end
not contracting triggered, recruiting process recruiter ownership

37% 22% 31%

Decrease in cost per hire Reduction in time to fill for Increase in recruiter productivity
new-to-firm roles

n = 1,207 recruiters (productivity); 48 organizations (cost); 193 new roles (time)

Source: Gartner 2017 Recruiting Team Optimization Diagnostic

Reinvent Talent Strategies 12

 Adopt an Agile Recruiting Model

Example: Philips advises the

business based on talent analytics
The recruiting team at billion-dollar health technology company
Royal Philips sources more than 10,000 new hires every year. It
generates unique insight into labor market dynamics to advise
the business on new and unfamiliar talent demand and labor
market risks, and suggests steps to mitigate these risks.
Philips built a team of three researchers, but the entire recruiting
team is expected to constantly collect and use labor market
intelligence for requisitions.
During disruptive and volatile times, “There is growing demand,
importance and value that external intelligence teams provide
in determining organizations’ buy-versus-build talent attraction
and location strategies, as well as affecting organizations’ overall
strategy and M&A activities,” said a senior talent analytics executive
at the company.

This enables the team to:

Understand the new market.

1
Philips uses labor market insight to
understand the new positions for which
it is hiring.

Anticipate changes in supply.

2
Philips forecasts labor market changes
that may disrupt future strategic business
decisions.

Mitigate talent supply risks.

3
Based on the labor market data gathered,
the analytics team helps the business
mitigate talent supply risks.

Reinvent Talent Strategies 13

CHAPTER 3

Foster
Innovation

Reinvent Talent Strategies 14

 Foster Innovation

Imperative: Use networks to

innovate at scale
Where is your organization on the innovation effectiveness (IE) scale?
In other words, how good is it at identifying new opportunities,
determining which opportunities to pursue and adjusting business
processes to act on those opportunities?
IE drives digital business performance. Compared to organizations
with low IE, those with high IE are:

4.49x 1.64x
more likely to be ahead of peers more likely to have successful
in using data and technology digital transformation efforts

HR has long championed individual and team innovator strategies,

but the impact on IE is limited.
The network approach — building and drawing on a network of
expertise, including leaders and employees to innovate at scale —
increases IE by 23%, regardless of the digital acumen in the
organization’s workforce.

Reinvent Talent Strategies 15


Action: Use network-based strategies to
build your innovation effectiveness
Involve employees in filtering, not just
generating, ideas so they are responsible
for choosing which innovative ideas the
organization pursues. This approach builds
engagement and commitment.
Reinvent Talent Strategies
Equip leaders for shared, not individual, risk
taking so leaders work together to accept
joint responsibility for the risks that inevitably
accompany innovation.
Foster Innovation
Guide employees on using networks to
innovate so they know who to work with
and how to push ideas forward.
16
Benefits: Greater innovation effectiveness, Foster Innovation

better digital business performance

Impact of IE on overall and digital business performance

Overall Business Performance Digital Business Performance

Compared to organizations with low innovation effectiveness, those with high IE are …

… 1.35x … 4.49x
more likely to be ahead of peer
more likely to meet their organizations in their ability to
employee performance goals use data and technology

... 1.31x more likely to meet their

customer satisfaction goals … 1.64x more likely to have successful
digital transformation efforts

... 1.33x more likely to meet their

profit goals

Number of respondents = 6,829 business leaders

Source: Gartner 2018 Strategy in the Digital Era Survey

Reinvent Talent Strategies 17

 Foster Innovation

Example: IBM uses crowdsourcing

to foster innovative thinking
IBM actively involves its employees in ideating, but creates a sort of
self-filtering mechanism to make sure participants focus on and share
the most productive kinds of ideas. The company requires teams
wanting to participate in crowdsourcing to attend training on complex
digital solutions to improve the feasibility and relevance of their ideas.
Before this training, teams were developing concepts for applying
digital solutions like cognitive computing based on limited knowledge
of these solutions — which hindered the applicability of their ideas. IBM
also provides guidelines for idea generation, asking employees to filter
their ideas for feasibility, business impact, timeline (e.g., can it be done
in a year?), scalability and complexity.
IBM also involves its employees in evaluating the ideas. To do that,
IBM simulates an equity investment market, where all employees can
act as investors who fund ideas with virtual money. This enables the
workforce to play a pivotal role in prioritizing idea submissions and
remain engaged throughout the crowdsourcing process.

Reinvent Talent Strategies 18

CHAPTER 4

Leverage
Analytics

Reinvent Talent Strategies 19


Imperative: Advise the business
on talent
Many in HR aren’t yet in a position to use labor market intelligence to
drive talent strategy and inform the business about what it needs. But
the potential exists to use data to drive key decisions such as whether
to buy or build talent and where best to find and locate talent.
There are myriad sources of labor-market intelligence, from official
government reports to market and organizational resources, including
recruiters, internal SMEs, customers, job boards (LinkedIn), and more.
You can also get insight from your customers about what they value,
which hints at changes that your employees will need to meet.
But in the increasingly competitive talent market, organizations need
analytics that are more global and more granular than those available
from government or one-off sources. They need robust labor market
intelligence that provides deep skill and location-level insights — and
paints a holistic picture of talent market dynamics. For example,
just understanding talent supply is not enough. You also need to
understand talent demand and competition to make decisions about
the sustainability of a location.
Reinvent Talent Strategies
Leverage Analytics
To leverage the predictive power of big data,
you need to do two things:
1
Mature the analytics capability of the HR
function to improve business impact.
2
Equip recruiters to use labor-market analytics
to operate as talent advisors.
But it’s a journey. At the outset, you’ll probably use fairly basic
operational metrics, such as time-to-fill and cost-per-hire data
to track your own processes.
It is only later, at more advanced levels of analytics maturity, that
you can become an advisor to the business — for example, by using
predictive hiring forecasts and business-embedded analytics — to
drive decisions around where to source and locate talent that is and
will be critical to the business.
20
Action: Use this 9-step toolkit to manage labor
market data
It is one thing to surface new realities from labor market intelligence. It is another to demonstrate
what those findings mean for business needs — and for hiring managers.
This toolkit provides you with 9 action steps to collect, interpret and communicate labor market data.
Collect labor market data
Ensure you don’t spend more time than necessary collecting
labor-market insights.
1. Understand which types of data to collect to generate the
insights you need. Examples are occupational outlook trends
for skill set insights, employment rates to predict shortages,
salary benchmarks to understand candidate mindset and
migration patterns to optimize search processes.
2. Find easy ways to gather labor market data. Even without a
big data engine, you can tap into available labor market data by
studying macroeconomic trends, talent competitor insights, skill
set insights and candidate insights.
3. Access publicly available data, including official government
labor-market statistics from, for example, U.S. Bureau of Labor
Statistics, Eurostat and publicly available data engines such as
StateMaster, which provides statistics from individual U.S. states.
Interpret labor market data
Use simple, relevant questions to extract the insights that will affect
your recruiting strategy.
4. Understand the audience to which you will present your insights.
For example, are you trying to inform, convince or drive action?
How educated is the audience on the issues? What business
problems are they trying to solve?
Reinvent Talent Strategies
Leverage Analytics
5. Turn data into insights. Demonstrate what effect the data has on
recruitment strategy. For example, do demographic trends show
the workforce is aging? Do geographic trends show labor is
migrating to the suburbs?
6. Select compelling graphics. Telling a story is often more effective
when done through visuals. Select the right visualization technique
to convey insights in the most engaging way. A simple Venn
diagram, for instance, can demonstrate the overlap between
different dimensions surfaced by data on industry adjacencies.
7. Audit the business relevance of the data representation. Before
you actually present your insights, double-check that your message
is clear, relevant and aligned to business needs, and that you have
chosen the most compelling way to convey your findings.
Influence hiring managers
Having established the best way to portray the labor-market insights,
show what they mean for recruiting strategy in a simple, logical way.
8. Demonstrate the implications of labor-market analysis.
Use your analysis to communicate your competitive position
and talent supply, as well as how these should influence talent
acquisition strategy.
9. Create a tangible action plan. For example, optimize your
search criteria to take into account adjacent skill sets or
alternative locations/industries. Or optimize employment
branding by posting jobs in new or different places.
21
 Leverage Analytics

Benefits: Better talent decisions for the business

Labor-market data can reveal short-term fluctuations in skill demand, identify the skills in
highest demand by geography, indicate skills that transcend function or industry boundaries,
and surface what skills competitors value. Consider some examples of the advanced business
impact on decision making:

Talent supply analysis. Competitor hiring analysis.

What if you are in the market for data science and AI talent? Data can
help you identify the top hubs for both the core role and advanced
skills, like natural language processing, sensors or video processing.
Data enables you to see not only which markets are best overall for
all skills, but which are stronger for certain skills vs. others.
What if you could monitor the roles and skills your competitors are
hiring for, and where, and on which customers they might be focusing?
Such data can help you stay on the cutting edge with your own role
design — and even with your business strategy.

Location favorability for critical roles. Wage inflation forecasts.

What if you could use data to help predict future talent supply
What if you need to make a decision on where to locate your shared
by role, city and wage inflation as well? Imagine how that could
service talent globally? Data provides insights not only on talent supply,
help you plan better to avoid the wrong locations and to better
but also on demand, competition and cost. One location may have
manage your budgets.
great supply and cost, but if it’s also got extremely high demand, it’s
likely to have wage inflation. Many bad and costly location decisions
have been made as a result of looking solely at talent supply.

Reinvent Talent Strategies 22

 Example: Big data drives better strategic talent Leverage Analytics

sourcing
Getting a holistic understanding of labor market data, such as talent supply and demand and salary costs, Key Insights
can help you make better decisions when strategically sourcing in-demand skills. Locations may appear to be
“favorable” from a talent supply perspective, but rising peer competition could increase demand — escalating Bangalore, Beijing and Shanghai are
salary costs and making it challenging for your organization to hire the right talent. At times, the demand for the most favorable locations based on
skills could be “low” and the cost point lucrative, but talent supply is nevertheless limited — so competition the combination of high talent supply,
rises, as does time to fill. Big data can surface “sweet spots” in the global labor market that your organization moderate demand pressure and low
can identify and leverage for various skills. salary cost. Additionally, these locations
have high adoption of AI technologies
What could you glean, for example, by comparing the demand, supply and cost picture for roles in various locations? and an influx of top companies setting
up their AI business operations in these
locations.
Big data drives better strategic talent sourcing
Asian locations have higher talent supply
AI roles (including blockchain, DevOps and related skill sets) and lower (average) median salary cost
Favorable locations as compared to European locations,
30%
making them more favorable locations
for the studied roles.
London
26% Mumbai Delhi NCR
Notes
Bangalore 1. Talent supply is as of 2Q18.

Beijing
2. Median salary cost is the salary
Talent Demand

22%
cost for all the job roles combined
Paris for each location.
Sydney Singapore

3. Demand pressure is defined as

18% Pune Shanghai
talent demand/ talent supply.

14%

Buenos Aires Berlin

Median base salary
(US$)
10%
0 3,000 6,000 9,000 12,000 15,000 18,000 21,000 24,000 27,000 30,000 33,000 36,000

Talent Supply
Source: Gartner TalentNeuron

Reinvent Talent Strategies 23

Conclusion
The digital-age mandate for HR
“Just about every organization in every industry is transforming
through the use of technology,” says Brian Kropp, Group Vice
President, Gartner. “When it comes to how HR reinvents itself
in the digital age, HR’s job is not simply to recruit, retain and
develop digital talent, but also to solve the problem their CEOs
are asking about. What CEOs want to know is how to improve the
innovative effectiveness of their organizations in the digital age.”

To do this, be a value-added partner to the business:

Build skills preparedness, recruit digital talent and foster
innovation — in a sustainable way that drives and supports
the digital ambitions of the enterprise, now and for the future.
If you don’t feel certain enough of your organization’s strategic
direction, don’t just wait for the vision to be clear. Seek out the
visionary leader(s) in your firm and double down on building
the talent strategy with them.
Establish a shared mandate across the organization among
employees, leaders and executives about the importance of
creating a digital strategy and a digital workforce (but don’t wait
for that mandate to be totally formed before pursuing your talent
strategy). Build platforms within your organization that enable your
employees to innovate and succeed in a digital world.
Proactively develop and share insight into modern talent dynamics.
Use predictive analytics and other intelligence to understand the
market and new target talent profiles, to forecast labor-market risks,
and get insight on which critical skills are emerging, evolving and
expiring. For maximum impact, leverage both internal and external
talent data.
Educate the business about the impact of digitalization on talent.
Use external and internal data to show what the broader market is
signaling about skills and competencies. Industries are transforming
so fast that leaders can’t predict as easily what they are going to need.
Your data-driven insights can help inform the business about the skills
it will need given its digital ambitions, and options available to secure
the right talent.

Reinvent Talent Strategies 24

Learn more.
Dig deep.
Stay ahead.
For more information about shaping the workforce
of the future, contact hrleaders@gartner.com.

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© 2019 Gartner, Inc. and/or its affiliates. All rights reserved. CM_567207