The Open Talent Economy, Part Two: Why Is This Happening, and What Should We Do?
In part one of our feature on the open talent economy, we explored what the open talent economy looks like and when we should expect to see it. In part two, we talk about why the talent marketplace is changing and how recruiters will have to adapt.
Deloitte Consulting LLP predicts that the shift from the traditional “closed” talent marketplace to an open talent economy is only a matter of time: “Jump ahead to the year 2020. Half the people you rely on don’t actually work for you, and that’s a good thing—if you’re ready.”
According to Andrew Liakopoulos, U.S. talent strategies leader at Deloitte, a confluence of “global talent megatrends” is responsible for the inevitable approach of the open talent economy. Deloitte’s report on the open talent economy elaborates on these megatrends further:
- Globalization: As geopolitical borders become increasingly permeable, the borders of the work world erode, too. There is an open flow of “ideas, practices, and technologies” between people and organizations. Talent, too, is freely flowing.
- Technology: The proliferation of sophisticated technology opens all sorts of doors for real-time collaboration and communication between people, no matter where they are physically situated.
- Mobility: Thanks to mobile technologies, people can work from almost anywhere. Similarly, social mobility allows people to move from location to location, according to where they want to work.
- Social Business: Social media has created a power shift: dynamic human networks hold more power now than organizations. Organizations must use social media to tap into the vast talent networks that exist online now.
- Education: Education has become more open and accessible, thanks to MOOCs (massive open online courses). This has led to a larger talent pool, with pockets of high qualified individuals appearing all over the world.
- Analytics: Today’s organizations have access to data as a predictive and prescriptive tool. It pays for these companies to gather large amounts of data from larger pools of talent.
These six megatrends, in concert, create a unique historical moment. “All of these things coming together have formed opportunities that haven’t existed in the past,” Liakopoulos said. “We’ve never had a point in history where all of these groups have had the opportunity to go out there and market themselves.”
Some organizations may assume that they are immune to these trends, but Liakopoulos said that simply is not true. “When we look at the macro environment shifts, regardless of what industry an organization is in, or regardless of what they’re trying to do, you can’t control these things. They’re happening around us,” he said.
Keep in mind that these trends are causing changes in the talent marketplace, not changes in organizations. Instead, organizations are changing in response to the marketplace. No organization will be able to avoid the shift to the open talent economy. “Like it or not, it’s going to affect the way you have to forecast your talent,” Liakopoulos said.
Recruiting in the Open Talent Economy
In an open talent economy, recruiters and talent managers will not be able to rely on their old closed-talent methods. Those methods will not respond effectively to the talent continuum. “Once people start understanding what the open talent economy is and internalizing it, [the question] shifts to, ‘How do we change the way that we look at our talent and source our talent?’” Liakopoulos said. “It really starts with your workforce planning.”
Workforce planning will be where recruiters and talent managers really see the effects of the open talent economy on their traditional processes. They’ll have to consider both the short-term view of workforce planning — i.e., trying to fill roles — as well as the long-term view — i.e., where do we see our workforce 3-5 years from now? “When you start combining those two things together, from a workforce planning perspective, what we see organizations doing more and more is looking at and thinking about their critical workforce segments,” Liakopoulos said.
Liakopolous defines critical workforce segments as “workforces that add disproportionate value to an organization’s supply chain” who are “very difficult to find and retain in the marketplace” due to low supply and high demand.
“If you can’t actually find [critical workforce segments] and attract them to the organization as employees, where else can you potentially source them from, and when do you actually need them?” Liakopolous asks.
Here, Liakopolous demonstrates the crux of workforce planning in the open talent economy: organizations will need to carefully consider where their talent might come from along the continuum. For example, an organization in need of a writer might decide that they can forgo hiring a balance sheet employee and go the freelance route. Of course, this sort of thing already happens rather often, and writers are not generally considered critical workforce segments. But in the open talent economy, talent of all levels will be sourced in a similar way.
To paint a more specific picture of how recruiting will look in the open talent economy, Liakopolous offered the example of an organization trying to source an actuary, paraphrased here:
Actuaries are critical workforce segments in financial services, because of the important functions they perform. However, there is a very low supply of actuaries and a very high demand for them. An organization in the open talent economy would begin with workforce planning, identifying actuaries as critical resources.
However, the organization may know that it won’t be able to attract all the actuaries it needs as permanent resources. Maybe the organization needs 20 actuaries in the next two years. After careful planning, the organization decides it can attract and retain 12 actuaries. Now, the organization asks itself, where are the other 8 actuaries going to come from? Here, the organization taps into the open talent marketplace: maybe it can find some borrowed-talent actuaries, and maybe it can find some freelance actuaries. The point is, the organization fulfills its talent needs by leveraging two or three different talent sources.
This is what recruiting will look like in the open talent economy. Workforce planning will be even more nuanced, strategic, and dynamic than it currently is. Savvy recruiters and talent managers will have to work together to identify which segments of the talent continuum can best supply an organization’s given need.
Nowadays, you don’t often hear about freelance actuaries, but in the open talent economy, you will.