Monday, December 19, 2016

Finding Talent: From Supply Chain to Value Chain

There is a talent problem in our economies. Speak to any employer in almost any country, and they will tell you how hard it is to find good employees with appropriate skills. And, this happens despite a massive expansion of public education system and rising literacy, an unprecedented level of access to Higher Education and Skills Training. There is also a near total consensus that education has an economic goal - jobs or career - and most employers have existing programmes and expansive plans to engage with education providers at all levels in search of talent. And, yet, the problem persists - and getting worse.

Here, I think, we should make the case for a paradigm shift. The recruitment of talent currently happens with a supply chain paradigm. Even in the best of the cases, where employers are deeply engaged with education institutions, they try to shape the curriculum, spot student talent early and do campus interviewing, they are still looking at the educators as passive suppliers of talent, whose job is to educate people to the employers' specifications.

Sure enough, there are other models that exist, but only at the very high end of the talent pole. The research scientists, for example, would transition from education to employment entirely differently, as the labs and projects are often jointly owned and run, between the employers and the universities, and the dividing line between work and learning is far less clearly drawn. This is perhaps because, at that level, the 'competencies' are transient and dynamic, and on the employers' side, the stakes are higher and the economic case is easy to make.

It is difficult to see how such a system could work for an Indian outsourcing firm recruiting thousands of people every year, or a small business requiring a few entry level talent. But, the existing model of finding talent, that of being a customer to the universities, is not working either. This is because the 'competencies' have become as dynamic as ever, even in the entry level jobs, and the business models of both the large and small employers at lower tiers of the value chain are now susceptible to dramatic change. The Indian Outsourcing companies, unable to compete on costs in the face of automation, are trying to climb up the value chain, and try to move from 'jobs' to 'ideas' business; they can not achieve this without overhauling their talent recruitment model. On the other end of the scale, the small, niche, companies are trying to move from 'services' to products, reducing unit costs but creating greater complexity of design. And, for companies across the spectrum, new challenges are emerging - demanding greater sensitivity to markets and customers, more transparent operations and deeper compliance, cultural sensitivity fit for a global workplace - which the current recruitment model insufficiently addresses.

The employers are seeking to solve this by doing more of the same - deeper engagement in curriculum design, more campus interviews etc. But the solution may lie elsewhere. It is important to look at how new industries are emerging in different places. This often happens anchored around an IBM, a GE or a General Motors, but not driven by them: Rather, an ecosystem emerges as the Supply Chain transforms into a Value Chain!

The difference between the Supply Chain and the Value Chain is that innovation happens at different levels of the supply chain rather than being at the customer end. The traditional model of Big Company Labs innovating and then handing down the specifications to the suppliers to conform to is the old model, and it is now getting replaced by what you may call the 'Cisco model', where an ecosystem of providers, working competitively or collaboratively, building innovation at every step of the process. In this model, the End Customer is an active participant, a conduit to market, and a guarantor of relevance. 

A similar model is needed to solve the problem of finding talent, and if we may call it, the next talent innovation. The employer should not merely participate in curriculum making, as this is a static process, often obsolete even before this is put to practise. Besides, in real world, changes happen within the practise, in small steps, in emerging use of tools, rather than in overarching theoretical models, the level curriculum deals with. Instead of giving inputs to curriculum, the employer should perhaps be the curriculum, allowing co-ownership of the educational experience. An active strategy to transform the educational experience, with employers standing guarantee to innovation, is one way to encourage innovation at every step of the educational experience - and for creation of a value chain for talent.

  

 




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