Managing Talent in the Knowledge Economy
The way we manage people is based on principles developed over a hundred years ago. It’s time to rethink our assumptions if we want to win the war for talent
Talent. It’s a word often used as a substitute for people. People we are looking to hire, or the workforce of a particular market. The Waterloo region has a great talent pool. Bay Area talent is expensive and retention is a huge issue. Edmonton is a great place to find AI talent.
Yet talent, with the exception of the executive ranks, is a relatively new quality that companies are looking for in the workforce. The value of ability and skill has long been understood — the ability to perform a basic task or the skill to perform a difficult task effectively or efficiently have always been desired qualities. But skills are things that most reasonably able people can acquire with instruction and practice.
Talent is something more nuanced. In our world this might mean an affinity for learning new programming languages, or the ability to think laterally, seeing connections and opportunities that others don’t. Good communication skills and emotional intelligence are talents that define effective leaders, enabling them to build trust and consensus around a clear mission. This is as equally applicable to scrum masters and product managers as it is your CEO.
I’m sure we’re all agreed that talent is important, but so what? Aren’t we all in “a war for talent”? Isn’t that why we pay top salaries, renovate our offices and pay for that in-house espresso bar? Yes — but if that’s the extent of your plan to attract and retain talent, you’re going to lose the war.
The next decade will see a massive amount of technology-driven change, and the ability to identify, foster and retain talent needs to be a priority for all departments in your company, not just HR. The great irony of the knowledge economy is that nobody really knows anything. We might have a pretty good handle on the next fiscal quarter, but we don’t really know how or when blockchain technologies, autonomous cars, climate change, AI, privacy regulations, gene editing or cheap, renewable energy will upend existing business models. But the more talent you have the better equipped you are to adapt to — and thrive — during periods of disruption.
This brings us to the crux of the issue. Unlike ability and skill, talent isn’t easily taught. Like artistic inclinations, it’s also a quality that is contained within the individual. The young analyst who finds a spreadsheet error in 10 minutes that’s stumped your finance director for days. The 2nd year ComSci intern who spends a month writing automated tests and reduces your QA release cycle from 3 days to 15 minutes. The manager who seems to have an innate sense for navigating bureaucracy and actually gets things done. The contributions of these people is obvious, and most importantly, they are probably well aware of their talent.
So understanding what motivates talent is critical for future-proofing your business by attracting and retaining the best. And if you think it’s ping-pong tables, snacks and top salaries, I have some bad news for you.
The History of Scientific Management
Consider the hierarchical management structure that seemingly every company operates under. These structures follow the principles of scientific management, a theory of labour efficiency popularized by Frederick Taylor at the end of the 19th century. Taylorism popularized the notion that a manager who understood the most efficient method to perform a task should train and oversee workers performing that task. In turn, experienced managers could be promoted to directors, overseeing a team of managers, vice-presidents would oversee directors and so on. Combined with the electrification of manufacturing, Taylor’s scalable management framework enabled the explosion of mass industrialization that became known as the second industrial revolution.
The basic tenets of scientific management are still widely followed today. But Taylor’s principles were designed to optimize businesses based around manual labour, like manufacturing. They didn’t account for the unique talents of individuals, as if all people are interchangeable and respond to incentives in the same way.
Taylor had concluded (and was entirely correct) that monetary incentives are effective for increasing the output of repetitive manual tasks. But dozens of studies have since proven that these extrinsic rewards are ineffective (and actually detrimental) to productivity when it comes to cognitive tasks. Author Daniel Pink frequently cites the ineffectiveness of monetary rewards and counters that job satisfaction and motivation are driven by the intrinsic rewards of autonomy, mastery and purpose.
To survive the next decade, we need to shift our thinking in this direction. If you want to attract and retain talent, remember that you’re dealing with unique individuals who know their worth. Introverts and extroverts with a variety of aspirations who want to feel respected and supported in making contributions to the company.
Your retention strategy and company culture is like any other product, it needs to be informed by its customers. Your company probably espouses some commitment to work-life balance, but what informs those policies? What are your diversity goals? What’s your work from home policy? How do you measure performance? What religious accommodations have you made? When developing these policies, are they informed by your employees, or are they steered by the opinions of the loudest person in the room?
HackerRank’s 2018 developer survey summarized the responses of 40,000 developers on everything from preferred programming frameworks to what developers look for in a company when job searching. When it came to job satisfaction, ‘flexible work hours, support for remote working and a focus on outcomes, not hours worked’ were the top factors. This echoes Pink’s thesis mentioned earlier. In short, people want to be trusted and respected, and have their individual realities reflected in the way their employer treats them.
If it’s a fear of losing talent or not attracting the best talent that drives companies to take a closer look at how they treat their employees, then so be it. The truth is that adding a nursing station, prayer room, or giving your employees more freedom to manage their time isn’t that hard. Adding support for remote work is just smart policy, and aligns with progressive employment trends. It requires faith to break from tradition, trust that people won’t abuse newfound privileges and honest transparency about goals and outcomes. Crucially, it also requires a willingness to experiment with employee-generated ideas and commitment to continually revisit and adjust your workplace policies and amenities.
Best of all, evolving away from Taylorism benefits everyone. If, as so many companies proclaim, your strength is your people, maybe it’s time to show them you actually believe it.
- this article was originally published in Design Intersect magazine, a publication of Scotiabank’s Digital Factory.
