How does candidate experience drive your innovation strategy and why it’s mission-critical?

In this article written by Chris Howard, Head of Global Research at?Gartner, published in the?Harvard Business Review, he discusses the challenges that leaders face innovating in uncertain times. One of the key points he raises is that the labor market threatens innovation. Why are talent and innovation strategies so tightly connected?

Although there's lots of talk about a global recession over the next year or so, the labor market talent shortage is a decades-long trend. Gallup,?McKinsey,?Korn Ferry,?Manpower,?and the?Brookings Institute?have all released reports analyzing the tight?labor market.?It's primarily wage inflation caused by the tight labor market driving the Federal Reserve's monetary policy. The Fed is raising the cost of capital to slow growth, forcing employers to lay people off and increasing the supply of talent in the market.

In his article, Chris Howard points out that this labor market challenges a threat to innovation. Layoffs, resignations, employees leaving roles because of burnout, low job satisfaction, the struggle to hire crucial tech talent, and constantly increasing tech salaries are incompatible with innovation, says Howard.

"Gartner analysts have?predicted?that by 2025, labor volatility will cause 40% of organizations to report a material business loss, forcing a shift in talent strategy from acquisition to resilience. In other words, talent retention is becoming as critical as profit margins or customer retention on the balance sheet."

That's a warning to executives from one of the most respected advisory firms in the world.

Digital technology connects us today like never before, leaving traditional institutions and hierarchies too slow and cumbersome to function effectively. When enterprises move slowly, younger, smaller firms use new digital technologies to create new value. This is happening in every industry, which means creative destruction is accelerating, and enterprise lifespans continue to decline.

In the following chart from strategy and innovation firm Innosight, corporate longevity remains in long-term decline.

Innovation and growth are critical then to survival. But how do you innovate with so much labor market volatility?

Firms must become more effective at attracting and retaining talent. Organizations must create a talent pipeline through a differentiated candidate experience beginning with the first contact and continuing through to how people collaborate and execute projects. The best talent wants employee experiences that lead to their growth and prosperity. The organizations that provide those experiences will attract and retain the best people. But technology is not going to differentiate your organization.

?People are the differentiator. ???

Several weeks ago, I talked with Aaron Sojourner , a labor economist, about the labor market and the challenges that organizations face. Aaron is a senior researcher at the W.E. Upjohn Institute for Employment Research and a former associate professor at the University of Minnesota - Carlson School of Management, where he focused on work and organizations. He's also served as a Senior Economist on The White House Council of Economic Advisors.

He explained to me that the labor market is a complex matching problem.

When you go to buy gas, it's a straightforward match. This is an example of the conversation you would have if you needed to have one.

Driver: Do you have gas?

Gas Attendant: Yes, I have gas. Do you have money?

Driver: Yes.

It's an easy match. It's so easy that it's been automated in many states for years. This type of automation is called self-service. It's very advanced stuff.

When you need to hire someone new for your team, that's a complex match.

Both the candidate and the organization care very deeply about the match. There are many variables that each person in the process will consider. That's why the best way to make the match is through conversations. There's no matching technology sufficient to give employers and candidates the confidence they need to make the right hire for their teams.

Employers are beginning to catch on. Cisco?recently announced that it will train all 84,000 employees to be "talent influencers." Why would Cisco make such a bold move?

There is no innovation without people. What better way to identify and attract the right people for your culture and the teams driving the innovating projects of the future than enabling everyone in the organization to identify and engage them in conversations? That's how you solve the complex matching problem to create a differentiated candidate experience.

When people across the organizations are involved in building the talent pipeline, they are engaged. They are co-creating the future with the guidance of leadership, not at their behest. Firms need committed people to think creatively, collaborate, and innovate to solve our most complex business challenges.

Investing in projects and skills that create an agile workforce means that the people we employ today are more engaged, resilient, and invested in their organizations.

While technology investments must continue, so too must these investments in people that help businesses compete.