No one can blame you for thinking “manufacturing” when you hear the popular business term “supply chain.” It’s easy to get one’s head around the concept: the sources and arrangements that ensure a ready stream of parts for the creation of whatever end-product is being built. Think “automotive assembly.” You can imagine that Ford has a well-developed and rigorous process in place to ensure it never runs out of the component pieces that go into its cars and trucks.
In their new book, “The Inside Gig,” Hitch Founder & CEO Kelley Steve-Waiss and Edie Goldberg Ph.D. link the supply chain concept to the most critical “parts and pieces” of any organization: its people. Based on their years of HR expertise and leadership, the pair ask us to consider the “talent supply chain”… the stream of talent and skills an organization needs in order to thrive and grow. Here’s an excerpt:
“We often refer to the supply chain when we talk about the manufacturing of a product, but rarely do we use the term when referring to talent inside organizations. The term supply chain was defined as a network between a company and its suppliers to produce and distribute a specific product to the final buyer. This network includes different activities, people, entities, information, and resources.
Throughout the last three industrial revolutions, we used this term to describe the supply and demand of goods and services; however, we can also think of the inventory of talent in much the same way.
The term talent supply chain is used in this book as the inventory of available talent resources in an organization (or talent supply) against the demand for work. As more and more businesses rely on knowledge workers, the correlations between supply chains for products or goods will be similar to the supply chain for talent. We know that as we continue in the Fourth Industrial Revolution that demand for skilled workers will continue to be a scarce resource. The law of economics suggests that scarcity of supply drives more demand, and this idea that skilled and specialized talent will continue to be in high demand suggests that companies will need to have a strategy to ensure (much like in product supply chains) that their inventory of skilled talent is never depleted to such an extent that the company cannot achieve its goals. The innovative practices that form The Inside Gig are designed to mitigate such a risk.
Maintaining a Skills Inventory
So much of the strategic value for a company’s talent operating model is related to managing its “core capabilities,” since without them the execution of the strategy is at risk. Many companies today realize that having an accurate inventory of skills is a source of competitive advantage. By knowing what they have and what they don’t have, they can manage their supply, set strategies to reskill, and close gaps.
What chief human resources officers (CHROs) are now tasked with is becoming the COO of the talent supply chain—it’s their job to know what’s in the inventory and to effectively manage the ebb and flow of critical skills before those skill sets are irrelevant or urgent.
More than ever, CEOs rely on their CHROs to manage one of the most valuable resource—the talent to win.
With skills having a shelf life of three to five years and the rise of machine automation, many of these skill sets will need to evolve. So how can CHROs become better at knowing what they have, predicting what talent needs are coming, and preparing those who manage the work for what skills can be cultivated on the inside? Without a crystal ball, CHROs will need ways to get the insights early enough to ensure that talent strategies are in line with the business. And although CEOs have long been saying that human resources are the greatest asset, it’s more of a reality than ever before.
In a 2017 article “Harnessing the Revolution: Creating the Future Workforce,” published by Accenture’s strategy team, the authors describe the top three actions all companies need to take to remain competitive and prepare for the future workforce:
- Accelerate reskilling people: Ensure that your workers recognize the skills required for the future and begin planning transitions that will inevitably come with the digital age.
- Redesign work to unlock human potential: Prepare for more flexible work models, including project-based assignments and gig workers.
- Strengthen the talent pipeline from its source: Prepare for multiple generations at once and collaborate across academia, industries, and government to reformulate the curricula and create a future-ready talent pipeline.
Further, the article states, “The Fourth Industrial Revolution contributed to an imbalance in the global economy. New jobs are being created that require skills that don’t yet exist at scale. Companies need to increase the speed of reskilling. Positioning their organization, and their people, to win in this newest revolution. Or risk leaving entire generations of workers without work or the skills to acquire it, destabilizing the lives of individuals and society at large.” So, clearly the issue of managing a supply chain of existing skills, while focusing on the needs of the future will become increasingly more important.
Today, there are relatively few options to inventory the skills in your organization as well as how to keep them current. Until recently, the only way to inventory skills was to run assessments of your talent through management calibration sessions against competencies by each role. Not only was this inefficient, often the competencies became irrelevant quickly or were too generic to zero in on the potential relevance of specific skills to other roles that individual could seek out within the organization. SAP, Workday, and Oracle—the three biggest Human Capital Management (HCM) vendors just began to pivot in this direction after realizing that skills were the future and had more levels of specificity than competencies.”
To learn how the Hitch platform can help your organization identify and leverage its talent supply chain, contact us to set up a free assessment call or meeting. You can also visit www.hitch.works and register to download a free chapter of “The Inside Gig.”