dr. sahana madan st) & mr. ram sathya narayanan (2...
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Talent Management: Leveraging Industry 4.0 in Talent Audit and Digital Transformation.
Authors: Dr. Sahana Madan (1st) & Mr. Ram Sathya Narayanan (2nd)
Associate Professor Talent Transformation and Management Specialist
CMS Business School Human Resources, Tata Consultancy Services,
Jain University, Bangalore Bangalore
Email ID: [email protected] Email ID: [email protected]
Abstract: Industry 4.0 is still evolving, and one of the key challenges is to appreciate the transition
and organisations investing heavily in identifying and bridging employee skill gaps. Even with a
landscape change through automation, artificial intelligence and technology building the right
capabilities in terms of employee potential, people strategy, talent audit and management will be
the key differentiator in driving and sustaining the transition. While the platform positions itself
as a propeller of efficiency to the industry, the adoption of Industry 4.0 assures profound impact
on the workforce. Amidst this background of an impending transition, it has become imperative
for organizations of today to not only match but also to predict the talent requirement based
on the available human resources for succession planning, role fitment, and also focus sharply
on talent audit in building its future as a key requisite.
This paper examines the circumstances that demand a transformation of the talent audit and
management processes aligned with Business 4.0 so that employees are able to acquire the
knowledge and skills required to realize their potential, and proactively contribute to the business
outcomes of the organization. The aim of this study is to examine the transformative challenges in
the context of SMAC and Industry 4.0 that presents in terms of employee skills, talent audit and
effectiveness. The research approach is descriptive cum exploratory study. A secondary data and
review of current academic and industry research is utilized to construct an overview of changing
nature of employee skills sets, job and role fitment. This paper presents the challenges of
Identification of employee’s future skill requirements, current organizational tools used in
talent audit and the technologies related to Industry 4.0 in aiding the assessment of employee’s
potential.
Key Words: Talent Audit, Employee Skills, Future workplace, SMAC and Industry 4.0
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1. Introduction:
We are witnessing a fundamental transformation in the way we work. Two distinct advantages
available to India are low labour cost and a rich talent pool, which augment and empower the
country’s global competitiveness as a knowledge-based society. The current skill ecosystem needs
to be re-engineered to cater to the evolving growth story and demands of Industry 4.0. Industries
are focusing on new age technologies such as artificial intelligence, robotics, bionics, the Internet
of Things, 3D printing and biotechnology, which build on and amplify one another. We as a society
should have a clear view of what the future, driven by megatrends and our own actions, will look
like.
The workplaces are changing and talent professionals today work in an ever-changing and dynamic
environment that requires skillful crafting of talent strategy. while Industry 4.0 is still evolving,
one of the key challenges is to appreciate the transition and invest heavily in identifying and
bridging skill gaps. Even with a landscape change through automation, artificial intelligence and
technology, making any organisation Industry 4.0 competitive would be an impossible task.
Building the right capabilities in terms of potential, people strategy and talent management will be
the key differentiator in driving and sustaining the transition.
Putting the right people in the right job positions is what a good talent management is and for
future need. Effective talent management ensures that employees can make use of their talent to
achieve an absolute success of an organization. The idea behind talent management is built on the
fact that business is run by people. The people are the ones creating and putting value on the
company by using corporate assets to come up with new products and services that people need.
The apparent implication of this is that the efficiency of the people in an organization is directly
correlated to the performance of the business. This is the rationale behind talent management to
attract, develop, and make use of the greatest minds to get superior business results. Critical roles
are getting the attention they deserve. Business leaders have started critically evaluating the roles
that are critical to their corporate strategy and whether they have the right talent within the
organizations. However, the picture is grim, but building an Industry 4.0 society and ensuing
workforce requires a broader approach that facilitates better, more user-friendly collaboration
between humans and machines is underway. While the idea of technology singularity where we
have super intelligent beings called techno beings which enables human brain to function with
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multifold intelligence is quite far away, technologies that are related to SMAC has the potential to
be able to predict an individual behavioral competencies well in advance that will be able to aid
an organization succession planning thereby helping the HR departments immensely.
2. Literature Review: Today many companies have started the concept of talent management and
are aware that they need to have a transformed approach to deal with an employee with right
knowledge, skills, abilities, behaviors and relationships to achieve strategic business objectives
(Morgan and Jardin, 2010). Talent is defined as a natural ability which is separate from learned
knowledge or skills and can be further developed and enhanced with practice and learning. Talent
is attributed to those individuals that have the potential to make a positive impact on
‘organizational performance either through their immediate contribution or in the longer term by
demonstrating the highest levels of potential’ (Ford at al., 2010).Talent is unique to an organization
and is extremely influenced by factors like industry, its nature, individuals, and implication at
group level and so is likely to change over time (Chartered Institute of Personnel and Development
(CIPD), 2007). As Tansely (2011) wrote in his article, there is not a universal definition of “talent”
in all the languages. Meaning of talent depends on the language that is shared in the organization.
Organizations are not even aware of the fact what talent means, let alone manage it (The
Economist,2006)
For example, Morton (2004) believed that individuals who can contribute their best to the
efficiency and transformation to the organizations. Goffee and Jones (2007) supported Morton’s
definition that talent is a handful of employees’ knowledge, skills and philosophies, which have
the capability to create unusual values for the organization from the existing resources. Pruis
(2011) described talent as something intrinsic, something that bolsters itself and does not require
appreciation from others. Ready and Conger (2007) defined talent as a those set of employees who
possess the knowledge above the average levels of knowledge needed in order to be promoted in
the hierarchical level in the organizations. Smart (2005) described talent as “Players that are the
top 10%of talent available in all salary levels, best of class”.
3.Definition of Talent Audit: A talent audit is a process of measuring and recording the skills of
individuals or groups of employees. The terms ‘skills audit’ and ‘Training needs analysis’ are often
used interchangeably. However, a distinction can be made between the two, in that a training needs
analysis focuses solely on whether employees have the skills and knowledge to perform well in
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their existing job roles, while a skills audit takes a broader perspective of the skills needed by the
organization, both at the present time and in the future.
A training needs analysis aims to identify what training and development are needed, but talent
audit looks to identify skills which exist within the workforce but are currently unrecognized and
unused. Talent audits are often undertaken at times of change when the requirement for existing
skills is in decline and new skills are required for the future.
3.1 Talent Audit in the era of Industry 4.0:The aim of a talent audit is to identify the existing
set of skills within the organisation and the skills and knowledge the organisation will need in the
future. Often, what employees may have to offer can lay hidden because organizations simply do
not know how to access or harness it. Talent audits are often undertaken at times when an
organisation needs to restructure its business or refocus its strategy and direction. For example,
technological developments may mean that certain skills are no longer needed but new ones will
be required. Similarly, a decision to expand by embarking on a new line of business will also call
for new areas of expertise. Talent audits should not be seen as a one off exercise but rather as an
ongoing process which is centrally placed within an organization’s training and development and
talent management functions.
Source: Author, Fig 1: KSA as Individual’s Talent and Expertise
It is important to understand that there is little value in undertaking a talent audit without first
thinking about why it is being undertaken, how it will be conducted and how the results will be
used. It is also vital to consider how the skills audit relates to work already carried out in the context
of annual performance appraisals and training needs analysis, so as to avoid any duplication of
effort. Although the practice of talent auditing has been criticized for being overly bureaucratic
and the process can be complex and demanding, if carried out with sensitivity and selectivity
within a well-planned programme that is carefully maintained, talent audits can enable managers
to:
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Gain a clear understanding of
employee’s skills and abilities
Demonstrate commitment to the job
satisfaction and career development of
employees
Take advantage of previously
unidentified skills in the
workforce
Plan for more effective recruitment and
development activities.
Redeploy employees to roles
where they are better placed to
use their full range of skills
Assign the right people to the right
projects
Identify any skill gaps or areas
of strength and weakness within
the organisation
Plan strategy and Business decision
making
Source: Author, Table 1: Talent Audit and its benefits
The benefits for individual employees include:
› Greater job satisfaction because of personal skills
› More varied work, as employees from different departments are brought into cross-functional
teams
› More opportunities for promotion as suitable, in-house candidates will be more easily identified.
3.2 Why organizations should audit talent? When an organization has to devise their strategies
to cater to the changing era of Industry 4.0 the roles to be allocated for employees also needs
updation to suit to the changing job requirements. However, there is a sense of discomfort and
balance of competencies that the new job and employee skill sets will demand. It is witnessed that
companies don’t seem to be investing on their employees to hone their skill sets to work in an
emerging workplace with changing dynamics of SMAC era.
4. Research Methodology:
The aim of the study is to explore the opportunities that SMAC era related technologies & tools
that aid in the effective predictive analytics can provide with the help of advance analytics tools
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such as big data with the support of artificial intelligence and machine learning on identifying
human potential. The study also provides insights on the available tools and techniques that are
used in the industry currently and some of the challenges that the organizations faces today in
rolling this across the industry in large scale. The study further provides a way forward on the
effective utilization of these techniques for future studies.
4.1 Objectives:
1. To highlight the importance of auditing talent in an organization during the phase of an
employee horizontal & vertical movement based on the best role fitment index.
2. To Identify the challenges of employee’s future skill requirements when the industries
across the sectors get ready to address the challenges and opportunities due to the
emergence of the fourth industrial revolution.
3. To explore the aids that technologies related to industry 4.0 will play during this
revolution.
4. To explore the predictive analytics with the technologies related to SMAC era that will
enable an organization on the effective succession planning with suitable Knowledge,
Skills & Attributes required for the various leadership roles in an organization to
capitalize during this phase of change.
4.2 Sampling – The sampling for the study was derived from the present predictive personality
assessment tools and techniques that are used widely across the globe for businesses in predicting
the talent potential and the challenges that the organizations face in rolling this in large scale.
4.3 Source of Data collection – A secondary data and review of current academic and industry
research, Internet, relevant websites of organizations who specialize in Talent audits and expert
opinions are utilized to construct an overview of changing nature of employee skills sets, job and
role fitment.
4.4 Research Method – The research approach is descriptive cum exploratory study.
5. Discussion: One of the greatest challenge that is faced by the organizations today is to identify
the right talent potential for the right job based on an objective evaluation methods. When it comes
to promotions and succession planning in the business world today, it is still based largely on
supervisors and leader’s opinions which are unfortunately not completely objective. While there
are checks and balances that are rolled across in many MNCs to ensure that this is taken care, still
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it’s applicable only for senior leadership roles and the organization and path that an individual
should take to reach the leadership roles have these limitations immensely.
5.1 Some techniques that are used today in the Industry for identifying talent potential.
1.Behavioural Event Interview - Behavioral Event Interview (BEI) is a way of interviewing
others in a structured form and is widely used in selection processes for new employees to identify
certain behavioural aspects. The technique is based on the assumption that predicting future
behaviour should best be based on the knowledge about the candidate’s past behaviour. This
explains why the word ‘behaviour’ plays a prominent role in the naming of BEI. Furthermore, the
technique is based on the fact that knowledge and behavior from the past play a crucial role in how
someone will behave in the present as well as in the future.
The method was devised in the 1970s by American psychologist David C. McClelland.
McClelland is also the originator of the so-called iceberg model; behaviour, knowledge, and skills
are just like an iceberg, they are mostly visible above water and only form the tip of the iceberg.
Those areas that affect behaviour—such as opinions, values, qualities, and driving factors—are
mostly under water, just like an iceberg. Only by asking questions can one dive underwater and
find out what drives someone and why they display certain behavior.
2.Competencies Based Interviews - Competencies based Interviews are the types of interviews
which are used in order to identify a particular set of competencies that are required for a specific
role that an organization is looking from a candidate in the Internal Job Posting (IJP) or new
recruits. The difference from the BEI when compared to CBI is that, while BEI tries to identify set
of competencies from the past behaviors without looking for any preset objectives, CBI completely
focuses on the preset well defined role required competencies for a specific role.
3.Assessment Centers - An Assessment Centre can be defined as "a variety of testing techniques
designed to allow candidates to demonstrate, under standardized conditions, the skills and abilities
that are most essential for success in a given job" (Coleman, 1987). The term "assessment center"
is really a catch-all term that can consist of some or all of a variety of exercises. Assessment centers
usually have some sort of in-basket exercise which contains contents similar to those which are
found in the in-basket for the job which is being tested. Other possibilities include oral exercises,
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counseling simulations, problem analysis exercises, interview simulations, role play exercises,
written report/analysis exercises, and leaderless group exercises (Coleman, 1987; Filer, 1979;
Joiner, 1984). Assessment centers allow candidates to demonstrate more of their skills through a
number of job relevant situations (Joiner, 1984).
5.2 Personality Tools commonly used in Talent Auditing: Some of the personality tools that are
commonly used in the Industry in effective Talent Audits are:
A. Thomas Profiling – The Thomas Personality Profile Assessment (PPA test) is a popular
personality test which employers administer to evaluate candidates’ character traits in a more
thorough way to determine whether they will be a proper fit for the job. The PPA test assesses
one’s choice of adjectives, each of which reflects their behavioral tendencies and personality in a
workplace setting that wouldn’t necessarily be shown during a job interview. The Thomas Job
fitment index is a tool used together with the Thomas Personality Profile Assessment in order to
determine which character traits and behavioural tendencies are ideal for a particular work
position. The results an individual receive from the Thomas PPA test will be compared to the Job
profile requirements to determine whether the candidate possess the desired traits they are seeking.
B. DISC Profiling - Human behavior is not cut and dry, or black and white, which is why DISC
theory consists of a combination of four DISC personality styles. It's possible, but rare that
someone only has Dominance within their personality traits, but more likely that they have
Dominance as the highest factor, with Steadiness as a secondary factor, and a little bit of Influence
as a third. Taking into account someone's primary, secondary, tertiary and even absent personality
traits allows the organization to see the unique blend of their DISC personality types and how this
affects their everyday actions, personal preferences within different environments, communication
with others, ability to organize, reactions or avoidance of conflict, and more. By understanding
someone's DISC personality blend, we can take proactive steps to placing that person in
environments where they'll feel comfortable and empowered, approach them in a way that they'll
react positive. The DISC test will build employees personal profile to portray on how four traits,
i.e. Dominance, Influence, Steadiness and Compliance rank within the personality to form one’s
unique character. and better understand and predict their actions and reactions in general.
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C. HR Chally Assessment Tool – Helps an Organization by analyzing role related competencies
with best role fitment index. This tool covers major roles and the individual’s fitment for the
organization thereby helping the Human Resource Department to choose the right person for the
right job.
5.3 Challenges faced by the Industry on the above predictive methods:
It is to be noted, the most high reliability still comes from the traditional three methods that are
mentioned namely BEI, CBI & AC when comes to predicting a human potential in an organization.
Where Assessment Centers has the highest reliability on the predictive abilities. As far as the tools,
they merely successful in assessing the present abilities and does not provide any reliable insight
to the potential of an individual. However, when it comes to implementation challenges in BEI
CBI & AC that are the most reliable as of now, Organizations with large talent pool simply don’t
have time and sufficient trained bandwidth for human resources to role this across their business
units and geographies of their operations because it need much higher expert human intervention.
While the tools that are used commonly in the industry today are most effective for best role
fitment for an employee, it does not help the organization on predicting the potential fitment of an
individual for his future aspirations or identify the hidden potential of a new fresh recruit from the
college. This creates a serious business challenge on the effective Talent Management front for the
HR department of an organization. With the introduction of advance analytics features in Big Data
this problem can be overcome in the future where an Individual’s potential can be most effectively
predicted with the further assistance of artificial intelligence and machine learning that do not have
any subjective bias like a human assessment of an employee potential. Thus there is an immense
hidden potential on this front for the future with the advancement in the technologies related to
Industry 4.0.
6. Limitations of the study
1. The study has taken into account of the methods used only in the developed western
countries.
2. The tools and techniques that are considered for this study to are derived only from the
English language reviews that are commonly used in the business world today.
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3. Effective management methods that are used in the eastern philosophies are not considered
for this study that may distort the views of the authors.
7. Suggestions for the future study
1. The future study can focus on helping the Talent Management on the effective usage of
tools & technologies related to Industry 4.0 by having this as a launch pad.
2. Future studies can also focus on the various management methods that are used in eastern
philosophy and try to bring into the realm of Industry 4.0.
3. Future studies also should look into the various assessment tools that are used in non-
English language and non-western philosophy.
Conclusion: Talent audits no doubt acts as check between organizations strategy and their
capabilities which helps them to reflect upon any misalignment if any and to take a quick snapshot
of available talent to match the current and future roles. Talent Managers can start reflecting upon
thoughts to address critical questions like what kind of investment is needed for current employees
to develop themselves, how they can enhance their knowledge, skills and abilities which is a key
factor in devising a right strategy and helps in decision making for leadership roles also. It is also
important for them to identify the needed skills sets that are currently available and what could be
the required skills to match to the needs of industry fourth revolution and the organizations
outcomes as one intended outcome of the process is to evaluate an organization’s readiness or
ability to achieve its business strategy. A talent audit can act as a reality check for managers to
understand their own employee skills and their adaptability and readiness to change.
The following five initiatives can help the managers to get the best out of talent audit:
1. Take a ‘whole person approach’ to define the expectations of current and future
talent by including both behavioral and technical competencies.
2. Create a thorough understanding of ‘talent capacity’ and potential through an
objective assessment process. A well-designed process will provide reliable data
on talent across the organization.
3. Use the results to build both individual and group-wide development processes that
address what is most critical to the organization.
4. Compare assessment results to relevant external comparison groups such as
industry peers to gain insight on the quality of talent.
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5. Use the insights from assessment and external benchmarks to refine key people
processes such as recruitment and performance management to attract and build
talent.
This research paper is grounded in the belief that individuals should understand the big picture,
how technology is evolving and what the megatrends could mean for the ‘world of work’.
Individuals should plan for an automated world and acquire the right skills that go beyond mere
technical competence. Emotional intelligence, learning agility, creativity, relationship building
and leadership will be much in demand in the times to come to keep pace with the disruption
impacting all spheres of our lives. Industries which are part of the Fourth Industrial Revolution
recognize the need to develop a holistic strategy.
Organizations need to build a workforce that understands the culture and dynamics of the company
and the product. As the workforce embraces the change and focuses on acquiring relevant skills
for the future, it will lead to an increase in both efficiency and productivity. By now it is a known
rule to organizations that they will witness the huge change in the job and role profiles where
managers will have to learn the new art of reclassification and rebalancing of work. Those workers
who perform tasks that cannot be automated will be highly valued, and that means creativity,
innovation, imagination and design skills will figure high up on the employer’s priority agenda.
That’s a tall order, and to respond to these challenges, HR executives are looking to accelerate
digitization to more electively attract and retain needed talent, as well as to manage services and
requirements in a more streamlined way and gearing up for industry 4.0.
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