EY refers to the global organization, and may refer to one or more, of the member firms of Ernst & Young Global Limited, each of which is a separate legal entity. Ernst & Young Global Limited, a UK company limited by guarantee, does not provide services to clients.
Recent Searches
Boards have a critical role in collaborating with management to ensure the organisation is evolving its talent strategy to meet new labour market realities.
In brief
- Boards need to consider whether current workforce management policies and talent strategies are robust enough to cater to the requirements of evolving employment models.
- Organisations need to look for ways of accessing previously untapped pools of talent to build and strengthen their workforce.
- Boards should support their organisations to get ahead on skills transformation and ensure they are addressing emerging skills gaps in an increasingly intergenerational workforce.
The great resignation may have abated but organisations are still contending with an exceptionally tight labour market. According to EY Ireland's Winter 2024 Economic Eye Report, the number of people in employment in the Republic of Ireland rose to a new high of 2.66 million, with all regions and most sectors registering gains in the year to Q3.
Ireland is now technically at full employment and organisations across almost every sector are experiencing shortages in just about every skill area. The balance of power has tilted in favour of highly qualified and experienced people. This is generating upward pressure on salary levels, but employers need to compete on more than just financial rewards when it comes to attracting talent in today’s marketplace.
In these circumstances, talent should be a major priority for boards. According to EY’s Global Board Risk Survey 2023, 65% of boards agree on their remit to constructively challenge management on talent and culture issues.
Build employee value proposition
Boards need to engage with CEOs and senior management to ensure that the organisation is properly equipped to compete for talent in a rapidly changing landscape. New challenges to be addressed include the transformative impact that Generative AI (GenAI) will have on business models and skills requirements, heightened awareness of the importance and value of equality, diversity, and inclusion within organisations, and increased consciousness around climate change and other environmental issues.
Two-thirds of board respondents to EY’s Global Board Risk Survey 2023 agree that their business needs bold change rather than incremental progress on diversity, equity and inclusion (DE&I), thereby suggesting that they recognise the benefits of a diverse and inclusive workforce, particularly at a time of talent shortages.
Addressing the challenges requires imagination and new thinking in relation to an organisation’s employee value proposition. Of course, pay keeps its top ranking for many employees, particularly during a period of high inflation, but the traditional package with its narrow focus on financial benefits no longer cuts it when it comes to attracting and retaining highly qualified staff.
Flexible working arrangements, wellness programmes, volunteering opportunities, professional development, flexible annual leave allowances, and clear career paths have all become increasingly attractive ingredients of the employee value proposition. The nature of the organisation and its values and behaviours in relation to ESG and other matters have also been growing in importance.
Boards should work with the CEO to ensure the organisation has clear sense of its purpose and mission. That will guide decisions on the position the organisation takes in relation to the social and environmental issues that have an impact on its ability to compete in the recruitment market.
Upskill existing workforce
The rapid pace of technological change and the evolving market landscape means that organisations need to constantly acquire new skillsets in areas such as cybersecurity and AI to survive and remain competitive. Given current labour market constraints, the most effective means of accessing these skills will likely be through investment in upskilling the existing workforce.
To address their skills gaps, organisations should invest in strategic workforce planning and training, including reskilling and upskilling. To do this most effectively, they need to know what their skills requirements are and how best to meet them to support their long-term talent objectives. Boards should work with management to assess the intergenerational needs of the workforce to ensure that employees are upskilled in areas such as technology and sustainability as well as in soft skill areas such as leadership, critical thinking, agility, communication, and teamwork.
Boards should explore with management if the organisation’s workforce model can be updated to access talent from non-traditional sources. Opportunities to be explored include optional continued employment for older employees beyond retirement age on a full-time or part-time basis or as freelance workers, along with gig workers, neurodiverse people, and managed service providers.
Boards should also ask if existing workforce management policies and talent strategies are fit for purpose to accommodate the needs of new employment models.
Questions for boards to consider:
Key actions boards need to take
Boards have a responsibility to advocate for the development of new talent strategies that will enable their organisations to overcome current skills challenges and to grow by acquiring the key competencies required now and in the future. Those strategies need to be monitored and assessed against a range of talent and culture related metrics to ensure they meet their objectives.
Workplace culture should become a standing agenda item for board meetings. While boards may not be able to directly influence the organisation’s culture, they can consider how it might need to change to support long term strategic goals, particularly in the ESG arena.
To help their organisations succeed on the talent agenda boards should:
Summary
An organisation’s ability to compete in today’s marketplace is inextricably linked to its potential to attract and retain skilled talent. Boards have a responsibility to ensure that their organisations have the future-focused talent strategies and employee value propositions in place that will enable them to access the skills needed to meet their goals now and in the future.
Related articles
Why boards need to play an active role in harnessing the power of AI
Boards have a responsibility to understand the full range and extent of the risks and opportunities presented by AI. Find out how they can do that.
How boards can help improve ESG scores by rethinking capital allocation
Organisations will need to identify new sources of capital to support the development of new and more sustainable products and services. Find out how.