Strategy in the Digital age: How to win the Digital Talent war?[Infographic]

In the age of COVID-19, the war for digital talent is fierce, given the expected shortage of more than 45 million in the coming decades. More troubling still, few universities provide talent-ready graduates for the challenge. With the global pool of university graduates estimated to be just below 315 million in 2016 (Human Capital Report, 2016), where just four countries — India, China, the United States, and Japan—are leading the pack with the lion’s share of nearly 85% of the talent pool. In other words, as of 2016, we had, on average, 1.61 million graduates per country. According to the World Bank’s data, to put these figures into perspective, the world had almost 43,150 listed firms in 2016. So, we had on average, 7,253 graduates per listed company without even considering privately held companies. Make no mistakes; the talent war is getting serious. Thus, building a winning corporate culture is imperative.

For this reason, many organizations are taking a page from Apple and Samsung’s catch-up strategies to beat the competitors. Moreover, this is not only small firms. Even the tech behemoth Facebook has recently taken the war for talent to another level by competing with academic institutions. Below the talent radar, the firm has been persuading artificial intelligence experts from many universities, including Carnegie Mellon, to join its research labs in the US and other parts of the globe (Boyle, 2018). As the war for AI and other scarce digital transformation talent has intensified, so has the pay for these talented people. The salaries of the leading artificial intelligence experts worldwide have topped $950,000, even at nonprofits. That’s not a typo, as reported by Winick in 2018

The scarcity of talented data scientists, top programmers, and statisticians is pronounced in most regions across the globe. For this reason, it is imperative to improve compensation and benefits packages to attract such experts. At the same time, businesses need to devise a great recruitment strategy in the regions where they are most often trained. Equally important is building a culture of talent that attracts sought-after talent and retains them by training them to improve their work. For this kind of culture to flourish, leaders need to set examples. In other words, executives need to adopt Alibaba’s Jack Ma rules for the digital age:

1. 1) The first rule is to develop employees to become more excellent than yourself.
2. 2) The second rule is to hire talented people who are competent than yourself.
3. 3) The third rule is to hire and develop talented people you will be proud to have as leaders in the years to come (Mphuthing, 2019).

To be sure, recently, Jack Ma created furious disagreements with him regarding his endorsement of the long-hours-work culture of more than 10 hours a day, which is predominant across China’s tech sector (Chen, 2019). However, his digital talent rules are invaluable and will remain a golden standard for the foreseeable future.

Moreover, the traditional recruitment process is defective, inconsistent, ineffective, and biased. As we all know, these deficiencies have been well documented. For this reason, many leading firms, such as Unilever and LinkedIn, have switched to neuroscience and cutting-edge AI to reinvent how they attract, select, and retain skilled employees. These leading firms did not invent this approach; rather, this science-powered method of assessing talent is provided by a New York-based startup, Pymetrics, established by two doctorate-minted people from U.S.-based elite academic institutions (Curtin, 2018). Make no mistake; this approach is the new game in town, given its promising results. These aforementioned companies are not alone. Even the white-shoe consulting firm Mckinsey is reportedly piloting its game-like interview process in silence (Clark,2018).

Many executives say that talent is their business’s most important resource. However, in practice, their actions do not match their words. Firms that wisely invest in their talent management culture will reap enormous returns on their investment. Consider Costco, the world’s second retail powerhouse, with revenues of more than $100 billion every year since 2013 and an operating profit of $4.1 billion in 2017 (Costco, 2017). This $93 billion retail behemoth has steadily invested in its people above anything else since its early days. More than 65% of its expenditure on average goes to its workforce. If investing enough in people was a mistake, the firm should have performed badly. However, this is not the case at Costco, which has continued to grow its revenues per year at a double-digit rate, with employee turnover below 10% over time. It is the envy of its industry, where the average turnover is almost 8 times that of Costco (Costco, 2017). So, to win the war for talent in the digital age, organizations need to spend enough to hire the best and retrain them to be digitally savvy while grooming them for the top jobs. In other words, they need the Jack Ma rules—the rules of winning companies more than ever.