dr. sahana madan st) & mr. ram sathya narayanan (2...

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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dr. sahana madan st) & mr. ram sathya narayanan (2...

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