In today’s rapidly changing digital landscape, companies that understand their talent needs and know how to meet them have a competitive edge. Here’s how they do it.
While few would debate the importance of technology talent, its importance in successfully executing a digital transformation is often underappreciated. Over the next five years, large companies will invest, on average, hundreds of millions of dollars—and some more than a billion dollars—to transform their business to digital. And given that top engineering talent can, for example, be anywhere from three to ten times more productive than average engineers, acquiring top talent can yield double-digit investment savings by accelerating the transformation process by even 20 to 30 percent.1Of course, such talent is hard to find. In the next five years, we expect the demand for talent to deliver on new capabilities to significantly outstrip supply2: for agile skills, demand could be four times supply; for big-data talent, it could be 50 to 60 percent greater than projected supply.
The new capabilities you need
Understanding what talent is necessary starts with understanding what capabilities digital businesses need. While those will vary by market and geography, successful digital businesses share some common traits: they’re focused on the customer, operate quickly, are responsive and agile, and can create proprietary insights. And given the rapid pace of change, companies will increasingly need to be able to engage with broader ecosystems encompassing a range of businesses and technologies as well as position themselves to take advantage of emerging artificial intelligence (AI) and the Internet of Things.
That requires IT systems that can process massive amounts of data, continuously deliver new infrastructure environments in minutes, be flexible enough to integrate with outside platforms and technologies, and deliver exceptional customer experiences—all while maintaining core legacy IT systems. This way of working is much more dependent on the collective skills and strengths of a multidisciplinary agile team rather than on the heroics or talents of any one individual. In short, this reality means people not only need to have strong technical skills but also to be able to function well in teams. Poor team dynamics can crush even the most talented individuals.
Finding and hiring the talent
In most companies, IT recruiting typically is a slow process: the HR department creates and posts a job description for a candidate role. If they’re lucky, they find a midlevel employee in six months (and it’ll take another four weeks until s/he is productive). For an organization undergoing an aggressive digital transformation, that’s too slow.
We believe companies need to rethink their IT talent-acquisition strategy in six ways:
1. Build a compelling vision
Money is important, of course, in attracting talent. But we’ve found that as long as the pay is competitive, an inspiring mission and value proposition is what motivates the best talent. This issue is particularly stark for large incumbents, which typically don’t have quite the “sex appeal” of a start-up. We’re seeing many inspiring examples of large traditional companies actively advertising and communicating their commitment to reinventing their brand for the digital age, such as General Electric’s aspirations to be a top-ten software company by 2020. We’ve even seen candidates and new hires take significant pay cuts to join organizations that communicate a cohesive story about their digital transformation and vision.
2. Make targeted ‘anchor hires’
Like attracts like, and that’s true of top talent too. Therefore, many organizations have invested in anchor hires who are leaders in a particular discipline or industry. These anchor hires help attract other exceptional talent to the organization either through their personal networks and industry reputation or by signaling to the market how important that talent is. Companies should evaluate the networks of top talent, invest extra time, and involve senior business leadership in pursuing them. Attracting anchor hires often requires offering them significant influence in shaping the unit the business is building.
3. Reimagine recruiting
What makes hiring new kinds of IT talent more complex is that those with the right profiles may not have a traditional résumé or be searching for employment or posting to traditional careers sites. To engage with these technologists requires targeting international community discussions such as Hacker News, Github, Stackoverflow and Reddit. Recruiters can locate top software programmers by looking through the source-code repositories that programmers proudly open up for anyone to review and use.
To effectively engage with candidates in these new environments, companies often need to either retrain or acquire new recruiting capabilities to speak to candidates about relevant—and often very technical—topics in their industry, excite them about the opportunities in the organization, and assess whether the candidate would be a good fit. Top talent is often flooded with recruiter hits, and we have found it more effective and genuine to draft the best “athletes” (i.e., relevant tech stars) from within the organization to engage and recruit their peers or other technologists.
4. Create a network of digital-labor platforms
Top talents know their value and have ready access to information about companies through online platforms such as Glassdoor, Hacker News, and StackOverflow, where employees share job satisfaction, company culture, and lifestyle information. To connect with these people, leading companies are creating their own sourcing platforms. Some are hosting online competitions that allow users and prospective candidates to showcase their technical skills through digital platforms such as TopCoder, Kaggle, Codility and HireIQ. Digital-talent platforms such as Good&Co and HackerRank are also helping companies more effectively assess a potential employee’s match with the skill requirements and culture of the company.
5. Build an ecosystem of vendor partners
To effectively take advantage of the technology ecosystem, IT is shifting from having one or two primary vendors, as has traditionally been the case, to a broad array of external options that include traditional vendors, new partners, alliances, and crowd-sourcing. Engaging with a network of vendors also requires changes in skills certification and vendor-performance management. At the same time, the most productive relationships occur when these vendors are treated more like partnerships.
6. Acqui-hiring talent
To build up a talent set, it can make sense to acquire a start-up that has specific needed capabilities. Many companies have used this “acqui-hire” approach, but many end up having trouble meshing cultures. Isolating the start-up to preserve its culture can be a useful approach in the short term, but it only delays the inevitable.
To address this issue, many companies are embracing a “reverse takeover” mind-set: A rotating team from the acquiring company begins to integrate and work with the start-up in a “ring fenced” environment that’s separated from the standard business processes. This allows the organization to begin taking advantage of the newly acquired talent while also “infecting” the broader organization with the start-up one small group of teams at a time.
This post is an excerpt from "The New Tech Talent Your Need to Suceed," published September 2016 by McKinsey & Co. Read the full article at the McKinsey site.