Why Skills could be Talent Acquisition's lifeline.

October has been a hectic month - I have been fortunate enough to attend and speak at several conferences and TQ client strategy workshops. The conferences included SmartRecruiters Hiring Success in Melbourne, followed by UNLEASH World in Paris and the Future Talent Council event, once again in Paris. My skills research continued and connected me with a couple of global Talent Acquisition leaders for skills-based organisations in the financial services and telecommunications sectors.

All this got me thinking about the future of Talent Acquisition (TA) in a skills-centric (and increasingly AI driven) world, particularly the change it will involve, the new capabilities it will need and whether it will be good or bad news for TA practitioners overall.

Where the CHRO spends their time, attention and money:

First, an important backdrop to the discussion.

The CHRO of a large enterprise is responsible for the total workforce. Assuming there is a 10% vacancy rate at any given time, the CHRO is highly likely to be more focused on the health and vitality of the existing workforce (90%) than external hiring (10%). This is one of the reasons why TA teams are often underfunded and underdeveloped, the ROI on the ‘10%’ is significantly less than the ROI on the ‘90%’.

Coupled with the fact that in many companies the FTE of the recruiting function is quite sizeable relative to populations of HRBP’s or other HR SMEs. It is often the single largest team and therefore has one of the highest HR cost bases.

Poor technology enablement is often the driver of this heavy headcount due to the manual work and administrative burden of TA teams.? It’s not therefore surprising that CHRO’s reduce TA FTE at the slightest hint of a downturn or reduction in hiring volumes. They can move this FTE or budget towards ‘higher value’ activity focused on the 90% - the existing workforce.

If I was a CHRO in a large enterprise I would be welcoming the advent of automation and dawn of Ai agents as an opportunity to either reduce TA headcount or cost, or hopefully to repurpose this headcount and cost elsewhere in the people function. Reflecting on the actual work of current TA teams, it is clear much of it is ripe for automation which is why there is so much vendor development in this space.

For a rather dystopian view on the future of Talent Acquisition read this article titled 'The Last Recruiter' by Kevin Wheeler that was released earlier today and signposts the ‘end of the professional recruiter’ as it trains and is ultimately replaced by a ‘RecruiterGPT’ type service.

I don’t necessarily buy-in to this view (and Kevin admits his article is meant to be ‘humourous’ and only a possible scenario) but I do think TA as it exists today faces an existential crisis and without change and transformation it will resemble a colony of penguins on an iceberg gradually drifting to warmer climes.

Future Talent Professional DNA

For me, the movement to Skills and the increased focus on workforce intelligence, mobility, development and career fluidity will act as a lifeline to many in the current TA industry but only if these professionals are prepared to radically reskill and upskill themselves.

As part of TQ’s Skills Research efforts we have been thinking about the core capabilities of Talent Professionals in skills-based organisations and have summarised the newer capability requirements into the following five buckets. These are on top of some pre-existing skills such as curiosity, empathy, relationship management and influencing skills etc. ?

Those that understand the TA industry will realise that many of the capabilities, skills and activities detailed above are not core to the existing industry DNA. ?The move towards data, analytics, storytelling and business commerciality will be new to many, as will the adoption of new techniques, tools and Ai.

Even if your business is not ‘skills-centric’ the future DNA of TA professionals will need to change and reflect significant uplift in Demand Planning, Analytics, Influencing, Commercial Acumen, Engagement, Development and Mobility.

For businesses that move to ‘skills-centricity’ there is an opportunity for current talent professionals to extend their activities and work focus from the ‘10%’ of external hiring to the ‘100%’ of the total workforce. Thus, moving to a more valued part of the value chain and one that is significantly less vulnerable to the vagaries of external hiring flows.

This will be crucial as automation and Ai reduce human requirement in traditional external hiring workflows and as improvements to workforce visibility and mobility seek to reduce aggregate external hiring demand.

Case Study: Global Financial Service Business (Skills Centric)

The global financial services business I spoke with has been on a skills journey for 4-5 years and is starting to see the changes playing out and some that are stubbornly not. The global leader of TA thinks building ‘Ai trust’ within the TA teams is crucial to drive adoption and change, but she also thinks we will never fully replace human intuition and judgement particularly during critical moments in the hiring process such as interviews. She stated that Ai will drive efficiency, but humans will still be required to drive quality of hire.

She is seeing the role of TA change in the organisation and called out the skills of commercial/business acumen, critical thinking, data centricity, influence and marketing as becoming more critical, these along with greater curiosity to work with and understand skills and skill adjacencies. ?She also mused that with the changing skill/capability requirements for talent, it may make more sense to align it with marketing functions. They operate in different domains, but the underlying skill and capability requirements are becoming very similar.

This last comment was a back to the future moment for me, having promoted this idea back in 2017/2018 following a project TQ undertook with Rebecca Houghton at Australia Post.

In Summary:

So, whilst Ai may be coming for traditional TA processes which are heavily transactional and administrative in nature, it won’t be coming for the elements of hiring and careers where human insight, judgement, and personal storytelling are required.? Ai is likely to shrink human involvement in the ‘10%’ but this will free up people capacity to focus on the full 100%, especially in skills-centric organisations. ?

The future is Ai + Human, I believe this future is bright, but it will be brighter for those humans who rapidly upskill and reskill in the areas highlighted above. ?There is no time to waste, 2025 will be a year of transition for many.?

Forget Boomers, Gen X, Gen Y and Gen Z, we are all Gen T, the Transition Generation. The people who lived and worked pre-AI and who will live and work post AI.

It’s going to be a wild ride.

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