Futureproof your people strategies to navigate the changing talent landscape

With people-focused macro forces reshaping the talent landscape, Canadian organizations must double down on a new set of focus areas to develop a future-ready people strategy.

Large-scale, people-focused shifts are continually transforming the workforce. Traditional approaches to addressing these shifts are no longer effective in this evolving environment. In this context, Canadian organizations must double down on a new set of focus areas to successfully deploy people strategies to help set their business apart in a competitive landscape. 

What people-oriented dynamics are reshaping the talent landscape? 

The workforce is shrinking. We’ve seen the working-age population trend downwards from 66.64% to 64.77% of the population over the last 15 years or so. What’s more, this tighter workforce is continuing to shrink. The portion of the population under age 18 has dropped from 25% to 17% globally since the early 1980s. Meanwhile, the population over age 60 is set to increase from 1 billion in 2020 to 1.4 billion in 2030 — and we are losing workers accordingly.

The people who make up this smaller workforce are also evolving. Six generations, from the Silent Generation to Generation Alpha, are operating in the workforce all at once. With Canada welcoming almost 500,000 new immigrants every year, our domestic workforce is now much more diverse and multicultural than ever.

Gender is also a factor. In 2020, 14% of Canadian companies had five or more female executives. That number grew to 25% by 2023.

This diversity brings upsides. We know that diverse teams, perspectives and ideas generally give way to stronger innovation, solutions and progress. At the same time, a workforce like this is creating a greater challenge for organizations by involving a more complex and a wider range of employee expectations. You need to provide an employee value proposition and employee experience that will resonate across many different groups and create inclusive work environments that are more adaptable to varying needs and paradigms. See further insights from EY people and workforce leaders here.

All of this is compounded by the fact that the smaller and more complex workforce is also becoming outdated. Technology is evolving at a remarkable clip, creating structural unemployment. As technology adoption and automation ramp up, we expect 50% of employees will need reskilling by 2025.

Looking further ahead, 1.1 billion jobs will likely be transformed by technology in the next 10 years. By 2040, more than 85 million jobs could go unfilled because there simply aren’t enough people with the right skills.

Now is the time to address these widening gaps and potential mismatches between qualified and available talent. However, you need to balance short-term, macroeconomic forces that are straining the market — historic inflation, high interest rates and cost management pressures — with the longer-term need to staff the business with a steady pipeline of ready and reliable people. This represents a perplexing proposition for any organization to consider.

How can businesses develop a future-ready people strategy?

At EY, we work with organizations to navigate these forces and competing priorities to help create workforces that help businesses better adapt in a dynamic operating environment. What stands out? The organizations that do this best ground their people strategy around five defining qualities:

1. Create organizational and talent agility. Agility isn’t about any single component. Rather, it’s your ability to be much more fluid from both the organizational and talent standpoints. Leading organizations are not only adopting organization designs that optimize workforce and talent deployment, but are also creating engaging career architectures that empower employees to pursue career mobility.

This can help you attract the right people, at the right time, in the right place, at the right cost to meet rapidly changing market demands and strategic priorities. It also enables a compelling and engaging experience for people interested in trying different roles to acquire new skills and experiences.

With the holistic adoption of both organizational and talent agility, employees are better equipped to face changing demands and organizations are better positioned to thrive in an increasingly competitive and dynamic environment.  

2. See the world as their oyster in the war for talent. Operating in Canada and building a robust, futureproofed workforce requires organizations to think outside traditional geographic boundaries. That means when organizations are considering their talent needs, the globe is also a source for their talent management ecosystem.

Organizations that do this well frame people mobility with a global village mindset. That means not only channelling the expertise of people from around the world into your business, but also empowering existing talent to embrace new global experiences. This kind of globalization approach can enable you to both attract top talent and create diverse global experiences for your existing employees.

3. Recognize human differences to manage talent with a human-centric approach. At EY, we talk a lot about our “humans at the centre” philosophy. This comes down to the ability to empathize with your people by understanding their uniqueness through their lens, and then designing talent strategies, structures and policies with their specific needs in mind.

With so many diverse factors defining the workforce, it may seem like an impossible task to personalize for every single employee. Of course, not every single people program must or can be customized at the individual level.

But it’s important to lay the groundwork for an inclusive and empathetic culture that recognizes human differences and then seeks to address them at scale. This provides recognition of how everyone is unique and special, while empowering people with a sense of belonging at work — an important factor in attracting, engaging and retaining the talent needed to thrive over the long term.

The table below illustrates the kinds of human differences we recognize, although it’s by no means is an exhaustive list.

4. Reimagine the relationship between people and technology. Any people strategy must consider how people will work seamlessly with technology. Where once technology was treated as a tool or resource, it must now be viewed as an asset capable of generating greater ROI across the business.

Reconsider how technology is strategically positioned vis-à-vis the employee. Typically, this relationship is viewed as “people executing processes presented with data and supported by technology.” In a world increasingly enabled by AI, that relationship must be turned on its head to “technology that is powered by data executing processes that are managed by people.”

At every level, reconsider how people interact with technology. This will require substantial support for reskilling and comprehensive change management.  

5. Sharpen the tool first to do the job well. With workforce dynamics creating significant demands on organizations, HR has been thrust to the front of the battlefield. However, organizations don’t feel their HR functions are prepared to lead this war. Business leaders are still not viewing HR as being “anticipators” enough, thus not being future-looking and strategic drivers of business success.

Businesses that succeed in differentiating themselves realize that in order to be effective in addressing the people challenges ahead of them, they also need to elevate the capabilities in the function that is responsible for the people agenda. Failing to invest in these capabilities can become a setback and lead to failure to win in the war for talent.

What is the bottom line?

A continually shrinking, diversifying, and outdated workforce presents both challenges and opportunities. In this complex environment, deploying thoughtful people strategies has never been more critical. Within your people strategy, you must have the capabilities to effectively adopt agility, a global mindset and new technological capabilities, all while embracing human differences. By refining people strategies to integrate these defining qualities, you can set your business apart to be positioned for success in an increasingly dynamic landscape.