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The Rise of the Skills Economy

By Anna A. Tavis, Ph.D., Clinical Associate Professor, Academic Director, Human Capital Management, Division of the Programs in Business, NYU

Anna A. Tavis, Ph.D., Clinical Associate Professor, Academic Director, Human Capital Management, Division of the Programs in Business, NYU

Amazon’s search for the new HQ location captured the national headlines for the good part of 2018. Written about the most was the competitive bidding process for the internet giant’s consequential location decision. Leading media stories featured real estate development plans and site layout designs along with the projected employment numbers in thousands. What got a lot less attention was Amazon’s careful assessments of the prospective talent supply. Amazon was looking for the site that could attract the world’s technical and business talent and used advanced talent data insights to help with the decision. 

Another tech giant, IBM has been on its own journey in search of top technical talent. With the external Talent supply being unreliable and scarce, IBM announced the launch of the “New Collar” jobs.

IBM’s New Collar jobs are the company’s response to technology’s fastest growing fields—from cybersecurity and cloud computing to cognitive business and digital design. These next-generation skills could be performed without traditional college degrees. Instead, they require the right mix of in-demand technical expertise and experiences. Ginni Rometty, Chair and President and CEO of IBM explained that it “is not about white collar vs. blue collar jobs, but about the “new collar” jobs that employers in many industries demand, but which remain largely unfilled. "According to Joanna Daly, VP of Talent, already 10-15 percent of IBM hires per year join without college degrees (New Collar).

Against the backdrop of the economy's exponential disruption and change, the case for rethinking careers and redesigning jobs has been made loud and clear. It is the skills, not the jobs that are the new career currency. The skills have become this generation’s unit of measure of individual career viability. Whether the attention is on automation and job loss or on the emerging technologies and new business requirements, the conversation about skills is emerging front and center in organizational workforce planning today. 

Traditionally, it was the government data that were the ultimate source of truth when it came to labor markets, jobs, employment, and skills. While the rate of skills obsolescence increased, the government reporting has not kept up with the changes; critical skills taxonomies have aged, and whole fast and fluid segments of the gig economy have not been accounted for. No business can compete with the old data. To fill in the gap and meet business needs the dynamic real-time cloud and mobile-based tools and platforms are being developed and deployed.

"IBM’s New Collar jobs are the company’s response to technology’s fastest growing fields—from cybersecurity and cloud computing to cognitive business and digital design. These next-generation skills could be performed without traditional college degrees. Instead, they require the right mix of in-demand technical expertise and experiences"

Enters Linked in with its powerful ever-evolving portfolio of career tools including the launch of Linked in Talent Insights platform. Linked in Talent Insights engine aggregates multiple and diverse data sources that have been inaccessible and unaccounted for in the analog era of annual reports. To tell the living story of the talent market place and to compete in the talent intensive industries new and creative ways of looking at jobs are required.

Eric Owski, Head of Talent Solutions at Linked in gives an example of the application of these new approaches and how they are used in Linked in. Its Insights looks not only at the numbers of professionals in high demand talent pools but also at the percentage of those professionals, who changed jobs within the preceding 12 months. It is very common among knowledge workers to see 70-80 percent of the people with the most in-demand skills changing jobs within 18 months stints. You can also see how the employment of those knowledge workers changes, what companies they go to and how companies can protect themselves from being out of date and being vulnerable to such shifts in the talent market. This metric and many others capture the importance of capturing the fluidity of the knowledge worker labor market and delivering it on demand for critical decision making (People Analytics and Future of Work podcast).

As of today, Linked in Talent Insights platform services three domains—Talent Pool Insights, Workforce Insights, Employer Brand Insights—they capture in real time changes in labor market, new and emerging skills and track the movements of new players with those unique new skills.

Internal people analytics teams are beginning to integrate these external indices with people data across various internal functions; HR and operations, finance, sales and marketing, and IT and facilities. Talent insights enhanced with the internal data provide input to a broad variety of decisions from near term skills acquisitions options to Amazon’s HQ location strategy. 

These external talent insights are not restricted to employers only–platforms like Linked in have transformed how talent looks for work and how talent is being developed. The vast majority of candidates can now be found online. Candidates have access to an abundance of information on companies and opportunities, allowing them to engage with recruiters, employers, and other employees as they explore the job market. The machine learning tools are being trained to search beyond the reported skills to those skills that are implicit or inferred. Looking at employment through the lens of skills leads to a more nuanced picture of the employment landscape.

Last May, The Wall Street Journal greeted the graduating class of 2019 with a warning. "A Wake-up Call for Grads:  Entry-Level Jobs Aren't So Entry Level Anymore.” The key message here was clear. The skills that the incoming new graduates are being recruited for are in short supply and with this generation’s average job tenure of 18 months only, there is no time for the ramp up.

Focused on most current skills and making people decisions supported with data and technology, Amazon and IBM are reinventing the way companies compete for talent. To paraphrase the familiar adage, the skills economy is “already here, it is just not evenly distributed” but others are catching up.

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