Welcome to PeopleTech, the podcast of the HCM Technology Report. I’m Mark Feffer. Today I’m speaking with Purbita Banerjee. She’s a senior vice president and Head of Product Management at Korn Ferry. We’re going to talk about the dynamics of today’s workforce, labor shortages in HR, tech, and of course skills all on this edition of PeopleTech.
Purbita, thanks for being here. I was looking at some of the research that you’ve done about the labor market in technology. How is the tension that’s going on in the labor market impacting HR technology providers? Do you have any thoughts on that?
I do. It’s a big part of what I do every day. So one of the big part of my job is to look over the horizon and think about, what are the big macro economic micro trends that are going to impact Fortune 1000 companies globally? And its impact on talent acquisition talent, talent management practices. So as I’ve been watching this, as I like to call it, the job market riddle, because we are seeing this tension between … Especially in tech and there is still a severe shortage of critical skills and critical jobs. But we’re also hearing news of top companies in tech laying off people.
But if you step back and actually look at the balance of the scales, they’re still at a high level in the labor market. I’ll take the US example: 10 million jobs are getting created every month, even if that reduces a little bit, and only six million of those are getting filled, right? There’s still a severe shortage. 40 million jobs are going unfilled. We continue to see the great resignation still taking effect, so another four million jobs are also, people are quitting four million jobs.
That tension continues to exist, and I believe a lot of the big companies are watching on what is going to happen. The impact on HR tech providers is similar: it’s being watchful and seeing where this will take us. I don’t think that there’s an immediate impact because, especially in the talent acquisition space, the HR tech vendors are still getting that pressure on helping support, closing these big critical jobs that are still unfilled.
There is a severe pressure on ensuring that the people that remain, and also employees that are going through this career cushioning, they’re watching, they’re also worried on what’s going to happen. Companies need to invest in their current people or the people that are going to be part of the winning strategy for the future. So that part of HR tech, which is the talent life cycle of employees within the organization, continues to take precedence. I think that part of the market will continue to flourish. Would there be some fiscal prudence that companies are going to take, which might impact a little bit in terms of growth of HR tech providers? We’ll wait and watch. It’s possible as there is some economic slowdown.
What are these companies supposed to do about all this?
I think about companies maybe falling in three different buckets in the spectrum of being highly risk averse to more risk takers. Let’s look at, maybe, companies that have already laid off people. So those companies are in a very interesting position, and I don’t believe all of that is economically driven. In fact, in this year alone in the tech sector, there’s been 80,000 layoffs so far. It sounds like a big number, but a lot of that is driven by transformation that companies have taken.
Be it Meta or Twitter, there were other reasons. Maybe it’s signaling something. If digital ad spend goes down, it’s probably signaling some sort of a less spend on digital ads, so the signals. But largely, it’s about a new business model that Meta or Twitter are looking at, and they are almost removing a big part of the business to be able to take it into a new direction. That’s a big part of the 80,000 layoffs that have happened.
But any company that is in that bucket still has to now focus and reinvest in the people that they have today, because the whole belief is that the people they have remaining are the ones that are going to take them to success. They still need to fill back critical positions that they would’ve lost in all of this. Because after any such layoff, there’s a lot of regrettable turnover that happens with top talent just being disengaged because of the situation around them. Companies have to think about backfilling.
For them, I think the focus and the priority should be on reinvesting in the people that they have, communicating and helping them understand what their roles are now in the new direction that their companies are going to take. For those that are in the cost cutting, cautious stage, I would say the middle of the spectrum, I think their focus needs to be on understanding the talent that they have.
I feel very concerned when companies just almost cut off a pound of flesh and let them go. And when you’re axing huge section of the business, you lose so many people that could bring really critical skills and experiences and knowledge for your future. What’s really important for any companies that may be just watching and understanding what their strategy needs to be. They should invest in understanding what skills they have, go through and exercise, where are people, what are their skills profile, what are the knowledge and experiences they bring to them? Understand their business strategy as it’s going to evolve, and who are those critical people that are going to take them to the future? Let’s not lose the people that are important to them.
And then, the third bucket I would say are companies that are opportunistic. Because there is an opportunity in all of this and picking up really valuable talent. Because we all know how competitive it was over the last few years in grabbing top talent. I don’t think that’s going to go away. Even if there’s a slowdown, it’s going to come back. You will be in the same war for talent to try and get the top people.
The really smart, opportunistic companies are going to take a step back, think about how they’re going to transform, and actually bring in the right talent, which is what actually, if you look at Amazon, Google and some of the big companies that they’re doing, while they are cost cutting in some areas and showing fiscal prudence, they continue to hire. The number of hires that they’re making still continues to increase. I think that’s a telling sign too, that this is maybe a time to really think about what kind of talent you want for the future, and then investing in it.
So my question was, what should these companies be doing? And you were just talking about that. So are they actually doing it?
I think, again, it’s a shared responsibility between HR tech providers, consulting firms … And I come from Korn Ferry … and companies. It’s a shared responsibility to think about it in a different way. I think in the last recession, and then even the covid pandemic time, I saw a pretty good section of companies that did this. So they were smart about investing in their talent, and that actually caused a huge shift in just the employer/employee relationship.
I did see many progressive companies really take it on and make that shift and really focus on employee experience, focus on job seeker and candidate experience, and make the shift from, I’m going to demand X, Y, Z things to, here’s what the employees asking for, the candidate is asking for. I remain optimistic that even in this situation, that there is the right intent, that talent leaders, heads of HR, heads of talent management, are going to want to continue to invest.
However, as I said, right now, the place we’re in is a little bit like a riddle. Maybe people are going to wait and watch a little bit to jump headlong and making investments if there is a fiscal prudence expected. I do see people being a little wary of making big investments right now in talent. And I think as I said, it’s a shared responsibility. We need to educate them that this is actually the right time to invest in people that you have. Because if you wake up after a year and feel like, okay, now I need the right talent, you’re going to miss the boat.
You’ve said that … And I’m shifting gears a little bit … But you said that one challenge that employers face is the sheer number of learning choices that are faced by workers. Could you talk about that?
Yes. I call it the problem of plenty. Think about a few years ago, there was a lot of talk about how employees want to learn. So enterprises and HR tech providers went into this overdrive of making content accessible to learners. What that means is, you suddenly have this buffet of millions of learning content choices. I really strongly believe that, that doesn’t solve the problem of learning.
Because as a learner today, you could go to YouTube and look at all the content there is, or Google, and find in the moment content that you need. It’s not like the choices are in any way prioritized or sequenced, it’s just too much and it’s overwhelming. When enterprises did that for organizational learning, I feel like they exacerbated the problem. All of these different content aggregators that exist, they bring to bear 30,000 learning content, 100 thousand learning content, everything is now available to this learning portal that employees have to go in and learn, and then they just step back.
There isn’t a really guided approach. It’s a little bit of, here’s everything, go pick and choose. I think that, when you look at the adoption rates of these types of learning content platforms, it’s pretty dismal. It’s less than 10%. If you really ask organizations and leaders and what kind of adoption they’re seeing, it’s very low. My point of view on this is, the value that enterprises bring is in helping employees understand what journey they need to take for the goal that they care about.
Not all employees have the same goals. There are employees … Especially in certain functions, it’s very common, like in sales and it functions, there’s a segment of employees that actually want to be a high performer in the role that they’re in today. There are employees that want to be specialists in certain skill areas. Certain employees want to grow and become a manager or a leader. There are others that want to shift careers.
There’s different goals different employees have, and I think the responsibility on enterprises is to personalize an employee’s journey based on that goal. What that could mean is, if they’re looking to be an expert in a particular skill area, help them identify a specific journey for new skills that are evolving in that area, increasing levels of proficiency from beginner to advanced, and actually help them take a more targeted journey over time.
Someone that wants to become a manager or a better leader, take them on a journey of what sorts of leadership competencies and leadership behaviors they need to learn and help them go on a journey around that. It’s less about access to millions of pieces of content, it’s more about helping them understand, where should they invest their time and effort, which is highly precious, on areas that are going to really move the needle and help them go from point A to point B?
It sounds like a real macro issue, not something that you can handle in little chunks. Is it within the realm of possibility for employers to actually accomplish some of this stuff?
Yes, absolutely. In fact, a lot of the work that we are doing now in Korn Ferry is to help do this at scale. It’s not an insurmountable problem. It’s about organizing the content in a way that makes sense for the employee at the stage of career that they’re in. You could have choices that are more adventurous and exploring, which I think exists today. You just have everything, you go in, so it’s like Netflix of choices. There’s so much content, just go look for whatever you want.
But I think that’s more of, you’re shifting the decision and the effort of making the decision onto the employee. And I think just, if enterprises and HR vendors, if we were able to frame that up as, what are the goals and aspirations? And then lay out a path towards that and show progress against that and record it for the organization to see the value that this employee could bring in the future as they gather up more skills and learn something in a more targeted way, versus just being completely self exploratory and doing a bunch of disjointed things, which are fine, which we all do and we learn in an ad hoc manner, it’s okay.
But to really be able to drive certain business priorities, you’ve got to be able to be much more thoughtful and planful about this. Let me give you an example, right? So many organizations today, let’s say, choose one or the other cloud technologies. Companies say, “We are going to move to Azure,” or, “We’re going to move to AWS.” And many times, that’s a significant transformation for the skill sets for IT and tech employees within the company.
Now, that is a business priority, but you need to then nudge all your people to start prioritizing or moving towards a particular cloud technology. And how do you do that without having some ability to explain to the employees that, here are the big trends in the market, here are our business priorities, here are key skills that you need to have over the next two, three years, which are good for you for being more marketable, but also good for our company. And then, provide a guided journey to the employees to go down that route.
The way today, organizations do is there are some compliance trainings that are applicable to all and everything else, is go ahead and explore and find what’s relevant to you. I think we can do a much better job in organizing that at the employee level, and sorting through that on their behalf, and giving them something that’s a little more guided and more targeted towards certain objectives.
What you’re talking about sounds very comprehensive, which means it’s probably very expensive. From the financial point of view, how should a company approach this?
I don’t think that it’s a lot of additional expense if they are able to make choices in the right solution. Because, as I said, a lot of the focus on building these kinds of offerings is to do it at scale. It’s about putting the layer of that experience, data science models to have very specific recommendations. We are investing in technologies that can help scale this.
At a poor person cost standpoint, it’s not going to be much higher than what they’re probably already spending on these content aggregation platforms, but which is only solving the access to content problem, but not the problem of helping with a guided journey or moving the needle from point A to point B. I think it’s more of depending on where the organization is making the right choice on where they want to go. I don’t think it’s a lot of incremental spending. It’s spending on the right things.
Purbita, thank you very much. It was great talking with you.
Great to be here. Thanks for having me.
My guest today has been Purbita Banerjee, Senior Vice President at Korn Ferry. And this has been PeopleTech, the podcast of the HCM Technology Report. We’re a publication of Recruiting Daily. We’re also a part of Evergreen Podcasts. To see all of their programs, visit www.evergreenpodcast.com. And to keep up with HR technology, visit the HCM Technology Report every day. We’re the most trusted source of news in the HR tech industry. Find us at www.hcmtechnologyreport.com. I’m Mark Feffer.