As we move into 2020, contingent workforce program managers and talent acquisition managers are increasingly considering the concept of total talent management. Why?
The fact is that since the idea of total talent management, or TTM, first came to light, firms have been embarking on the concept as a journey with varying degrees of maturity. Talent shortages, combined with workers’ increasing appetite for less traditional ways of working, are prompting organizations to think more holistically about how they source, develop and retain talent.
The urgency now is due to a variety of reasons, including:
Skills shortage. The annual PwC Global CEO Survey of 2018 found that 80% of global CEOs were concerned about the availability of key skills, up 3% from 2017. And that statistic has been on an upward trajectory, increasing 17% since 2014. In addition to the availability of key skills, CEOs globally are also concerned about where those skills are and the mode in which those skills are being delivered, which is helping to drive the push towards the total talent approach.
Decreasing unemployment rates. The percentage of active population that are unemployed in developed countries has been decreasing consistently since 2013. The European area, the US and Japan all show a downward trajectory in terms of unemployment. Skill shortages are also restraining growth.
“Unsurprisingly, in an environment where you have low levels of unemployment, you start to see a gap between the number of job openings that are available and the number of hires that are made into those job openings,” says Jo Matkin, Staffing Industry Analysts’ global workforce solutions research director. Organizations must consider the costs when that gap starts to widen in terms of being able to deliver services to customers and the ability to get work done.
Aging population. The working-age population is also dwindling in comparison to those aged 65 and older. In 1950, there were 11.75 working people for each person aged 65-plus; that decreased to 8.5 in 2011 and is expected to fall to 3.9 working people for every one person age 65-plus by 2050.
In that context, companies should be considering every single possible means of getting work done that they can and not close the door to particular types of talent or channels of talent given it’s going to become more and more difficult to attract and retain workers, say experts.
Contingent workforce growth. SIA’s “Workforce Solutions Buyer Survey 2018: North America” found that the share of contingent workforce as a proportion of the entire organization has been on an ever-increasing trajectory since 2009 and respondents to that survey now report an average of 22% of that contingent workforce versus the permanent workforce. Additionally, many programs don’t yet incorporate alternative forms of contingent workforce, such as statement of work or outsource programs. “Many are simply looking at contingent workforce in the context of independent contractors or temporary workers,” Matkin says. She suggests that if all those types of work were included for every organization, the percentage would exceed 22% of the entire workforce.
“We’re seeing drivers both from the imperative to look at total talent from a skill shortages perspective and the increasing prevalence of contingent workers within an entire organization,” Matkin says.
Background: What Is TTM?
The terms “total talent management” and “total talent acquisition” can mean different things to different people depending on their perspective.
SIA defines total talent management as a model of talent or workforce management that includes an organization’s acquisition and management of all human talent in the broadest sense including “permanently hired” workers and all types and sources of “contingent” workers, as well as non-human talent including robots, bots, software and automation.
“Probably the most important thing to pull out here is that we consider total talent management in the broadest sense, in terms of not only all human talent, including permanently hired and contingent workers, but actually non-human talent including robots, bots, software and automation,” Matkin says. “By considering that in the very broadest sense, we seek to be able to help people to understand the component parts of that total talent ecosystem.”
Meanwhile, total talent acquisition, or TTA, refers not only to the operational approaches to sourcing, recruiting and engaging talent, but also to higher-level strategic considerations of structuring or managing the talent supply chain (i.e., decision about outsourcing, sourcing geographies, etc.). TTA is subsumed within the concept of TTM and therefore encompassing the acquisition of all human talent in the broadest sense including “permanently hired” workers as well as all types and sources of “contingent” workers as well as non-human talent including robots, bots, software and automation.
CWS Council members seeking a detailed examination of the strategies being deployed by more advanced practitioners of total talent, as well as further insight on the critical barriers to success, can also download the report, “Toward a Total Talent Future,” commissioned by Alexander Mann Solutions. Non-CWS Council members register to download the report on SIA’s website.