In today’s risk environment, talent has become a critical element of organizational success, according to Matt Duncan, Managing Director of global business consultants, Protiviti. As such, it needs to be managed with strategic importance.
Top Risks for Organizations in 2024 and Beyond
Protiviti and NC State University’s Enterprise Risk Management (ERM) Initiative recently published their 12th annual report on the top risks concerning directors and senior executives worldwide. The report, based on a survey of 1,143 global directors and senior executives, reveals their perspectives on risks likely to affect their organizations in 2024 and 2034.
The findings highlight multiple sources of uncertainty for HR leaders, with continued economic instability and geopolitical factors driving perceptions of key risks. Notably, the ability to attract, develop, and retain top talent, manage shifts in labor expectations, and address succession challenges ranked as the second-highest risk for 2024 across all survey respondents.
The Triple-Edge Sword of Talent Management
Organizations face a complex challenge when it comes to staffing and employment decisions:
- Economic conditions, including inflationary pressures, are decreasing margins and intensifying scrutiny on hiring approvals.
- Disruptive technologies like artificial intelligence (AI) create uncertainty about the talent and skills needed for future requirements.
- Initiatives to embrace new technologies necessitate reskilling and upskilling of employees.
These issues create a conundrum for employers already facing rising labor costs. Looking a decade ahead, executives still see this issue as the second-highest ranked threat, only behind the increasing shadow of cyber threats.
Climate Change and Sustainability
Organizations must also consider how their labor pool can support efforts to address climate change and other sustainability challenges. The growing focus on climate change, sustainability policies, regulations, and expanding disclosure requirements has risen from the 20th most significant risk in 2023 to 13th in 2024. Securing the skills to address this risk is paramount in leaders’ minds.
The Need for Reskilling and Upskilling
The adoption of digital technologies requiring new skills in short supply ranked as the sixth most significant risk for 2024. This risk is expected to persist over the next decade, ranking as the third most significant risk in 2034. Succession planning challenges further highlight the need to attract and develop key talent for an organization’s strategic success.
Shifting Focus on Risk
Interestingly, risks that were top of mind for HR leaders during the last 18 months have significantly reduced in focus. For instance:
- Return-to-work trends and workplace evolution are less of a concern.
- Managing workforce demands for remote or hybrid work environments fell from 9th rank in 2023 to 24th in 2024.
- Culture-related risks, such as organizational resistance to change when adjusting business models, fell from 4th in 2023 to 14th in 2024.
This shift highlights that while some risk areas remain consistent (e.g., attracting talent), others can quickly disappear from the priority list.
Strategies for Addressing Talent Risks
Duncan suggests that organizations should first be able to answer the question:
“Why do people come and work for you?”
He notes that many organizations typically cannot answer this question consistently. To address talent-related challenges now and in the long term, Duncan recommends the following strategies:
1. Adopt a New Talent Mindset
A successful modern talent mindset:
- Focuses on skills and capabilities, rather than roles or jobs
- Prioritizes the value talent generates over its cost
- Sources skills from a diverse and flexible talent pool
- Looks beyond the Gen Z workforce to source skills aligned with future strategy
- Treats leadership development and succession planning as a shared responsibility
- Leverages a resilient and innovative organizational culture as a recruiting and retention advantage
2. Understand Your Organizational Starting Point and Make a Plan
- Align the talent strategy with the business strategy
- Take inventory of existing talent and skills
- Map existing skills to short-, medium-, and long-term goals
- Implement rolling talent forecasts
- Understand the financial impact of talent scenarios
- Measure and report on open positions, skills and risk, and upskilling opportunities
- Capture and report on DEI & ESG metrics relevant to business objectives
3. Clarify Your Employee Value Proposition
Create a well-documented, well-communicated, and widely understood Employee Value Proposition. Organizations should consider talent as the new customer, recognizing that competitive pay and benefits alone are no longer sufficient.
A Leadership-Driven Approach
Duncan emphasizes that addressing people-related risks is no longer the sole domain of HR. The steps above should be driven at a leadership level within all organizations, with talent retention and attraction established as a clear strategic priority.
As organisational performance becomes increasingly reliant on the quality of people and teams, it is crucial to ensure that talent strategy aligns with business strategy. By adopting these approaches, organizations can better navigate the complex talent landscape and position themselves for success in 2024 and beyond.
Vadim Kouznetsov is a distinguished entrepreneur and the visionary founder and CEO of JobXDubai.com, the UAE’s rapidly expanding job board. Renowned for his expertise in bridging the gap between job seekers and employment opportunities, Vadim has become a leading authority in the recruitment and job market of Dubai.