"You can have the best strategy in the world, but it means nothing if you don't have an enabling culture to action it."
Mike Rugg-Gunn
Chartered Occupational Psychologist
AI now touches every part of talent management. Data is arriving faster than teams can use it, and hybrid work is here to stay.
Hannah Mullaney sat down with Mike Rugg-Gunn, author of Managing Talent: A Short Guide for the Digital Age, to explore what that means for HR. They cover attracting digital talent, what to measure in high-stakes selection, why the annual appraisal has had its day, and how to make learning stick.
In this episode
Mike draws on his book, Managing Talent: A Short Guide for the Digital Age, to unpack how digital change is reshaping the way organizations hire, manage and develop people.
From AI ethics to the end of the annual appraisal, it's a practical tour of what HR needs to do differently.
- Where AI helps talent management, and where it needs guardrails
- How to change culture without leaving your people behind
- Practical ways to attract and keep scarce digital talent
- What high-stakes selection should measure in digital businesses
- What should replace the annual appraisal, and why feedback frequency matters
- Why D&I works better built into every program than bolted on
- …and so much more!
00:00:00 Hannah (Host)
Hello and welcome to the Deep Dive. I'm Hannah Mullaney, Client Solutions Director at Saville Assessment, and each episode I'll be joined by an industry expert to discuss the hottest topics in assessment today. Let's dive in.
00:00:20 Hannah (Host)
Hello. In today's episode, we're talking about managing talent in a digital age. I'm joined by Mike Rugg-Gunn, who's written an excellent and very interesting book on this topic. Welcome, Mike.
00:00:34 Mike Rugg-Gunn
Hi, Hannah.
00:00:35 Hannah (Host)
Mike, you start the book by talking about the importance of the business context. How does the business context impact talent management strategies and solutions?
00:00:48 Mike Rugg-Gunn
Well, it's a very large topic, and it's impacted by both external and internal factors. If you look at external factors, the most important one at the moment is AI. There is no part of talent management that is not impacted by artificial intelligence. Recruitment in particular is impacted by machine learning that's able to reduce the cost of hire and free up recruiters to do more meaningful and strategic work than they perhaps have been able to do in the past. In selection, we also see volume assessment processes being automated, again reducing the cost of hire. In retention, it is helping to predict attrition and measure performance. And finally, in learning and development, it's able to personalize learning pathways, based on machine learning that can estimate the impact of different learning content. So across all areas, AI is making a big difference.
The critical thing here is to understand that, just as we are naturally concerned about the ethics of AI generally, that matters in talent management too. I can give you one particular example in facial recognition. Recent research has shown that African American and Asian faces have been misidentified 10 to 100 times more than Caucasian faces. That research came out of airport surveillance, but it has proved relevant to talent management too, which is why facial recognition has been dropped from video interview processes by organizations such as HireVue. So there are dangers out there, and AI does need some constraints on it, not just in talent management, I would suggest, but nationally and globally.
So AI is the first thing. The second area, I guess, is data. More data traverses the internet every second now than was stored 20 years ago. If you speak to senior leaders and managers, they say it's like a fire hose coming at them. They're being drowned and drenched in it. There's a real need to understand how to make the very best use of the data coming through, whether that's structured or unstructured. I think one solution is to have a data strategy. That's about identifying, collecting, collating, warehousing and democratizing data, so the people who need it have easy access to it when they need it, to make the right choices going forward. That's a particular challenge for people at the moment.
The next area is understanding the difference between digital transformation and digital disruption. People sometimes tend to confuse the two. Digital disruption, if we deal with that one first, is much rarer. This is where a new entrant comes into the marketplace with an offer that creates so much value that the existing businesses can't compete. It's usually a platform-based business that disrupts a product business. I'll give you an example of what I mean. InterContinental Hotels Group, which owns the Holiday Inn brand, started in 1954, has over 6,300 hotels and resorts globally, and has a market capitalization of about 12 billion US dollars. It has been disrupted, as most hotel groups have, by Airbnb, which started in 2008, has no hotels and no hotel staff at all, and has a market capitalization of 100 billion US dollars. In other words, around eight times that of InterContinental Hotels.
00:05:01 Hannah (Host)
That's some disruption.
00:05:02 Mike Rugg-Gunn
It is some disruption, and it shows the value of platforms over products. Digital transformation is much more common. That's where businesses are evolving business models that are new and different, to provide and create value for customers, employees and shareholders. So I maintain in the book that digital disruption is quite rare. You might see it with Airbnb, Uber and Netflix, but digital transformation is much more common.
The pandemic had a transformative effect across both consumers and the wider population. Behaviors that were predicted to change over three or four years actually changed over three or four months. The most obvious one in terms of talent management is people working from home, which is now so-called hybrid working. I think the cat's out of the bag now, and I don't think it's going to change any time soon. But the honest assessment is that there is a tension between leaders who want their workers back in the office and workers who have found newfound freedoms and really don't want to go back to the boring commute.
00:06:25 Hannah (Host)
Five days a week.
00:06:26 Mike Rugg-Gunn
Absolutely. So this has had a significant effect on people's working habits and has impacted talent management in many ways. The other element I discuss is the growth of the gig economy, which is freelancers. Some people predict that by 2040, 40 to 50% of employees will be working on their own. Large organizations find it really quite difficult to recruit these gig economy workers. Freelancers understand their value in the talent market, particularly digital talent, and they want to work on their own because that gives them the flexibility to work with whom they want, when they want and where they want. That's a challenge, particularly for HR business partners, in understanding how to blend full-time employees with gig economy workers to provide a cost-effective solution to their talent needs.
00:07:32 Hannah (Host)
And I guess that's where data is really important, right?
00:07:35 Mike Rugg-Gunn
Yes, it is. Absolutely critical, and getting the right sort of data to understand what is going to make the best choice.
00:07:46 Hannah (Host)
That idea of democratizing data is really, really interesting.
00:07:50 Mike Rugg-Gunn
It is. Sharing it with everybody.
00:07:52 Hannah (Host)
Yes, definitely. Giving everyone access to the power that it gives.
00:07:59 Mike Rugg-Gunn
Indeed. And we just touched on the importance of unstructured data. Structured data tends to be more quantitative, but what's really exciting today is unstructured data, which is much more qualitative in nature. A lot of it comes from social media, and how you clean and gather that and check it for reliability and validity, to make sure it's fit for decision-making purposes, is a really interesting challenge. But it does provide insights that are much richer in detail than you sometimes get from more established quantitative data sources.
00:08:35 Hannah (Host)
Interesting.
00:08:36 Mike Rugg-Gunn
Internally, talent management is impacted by strategy and the rules of strategy. You've probably followed Michael Porter, who has been writing about business strategy for about 30 or 40 years. Some of his rules and models still hold sway, but some of them have changed, because digital transformation and digital disruption have changed the rules of competition. For example, they've encouraged a two-way conversation between the business and the consumer, and it's now possible to personalize content for each consumer. These weren't imaginable 20 or 30 years ago. So parts of his theories are still relevant, but you have to adapt them for the new world that's upon us right now.
The other area I'd certainly like to talk about is culture. Peter Drucker said that culture eats strategy for breakfast, and I think he's right. You can have the best strategy in the world going forward, but it means nothing if you don't have an enabling culture to action it in the business. I talk quite a lot about culture in the book, because I see it as a vital component. The key element in terms of talent management is how you take your employees with you when you are seeking to change culture and get them to adopt new behaviors that are relevant for the digital age. That's best done by keeping some areas of the old culture in place, so they act almost like a cultural guardrail for employees as they move towards a new culture. That way, they feel comfortable and happy with the transition, and they won't feel they're moving too quickly or be alienated by what's in front of them.
00:10:28 Hannah (Host)
So it's not a wholesale change. It's incremental steps.
00:10:33 Mike Rugg-Gunn
Yes, and I think that's really important. You need to take people with you all the time. If you are scaling up at pace, as some digital businesses will, and you don't take everyone with you, or they feel culturally disconnected, then frankly I think you risk disaster in your scale-up attempts.
00:10:54 Hannah (Host)
Absolutely.
00:10:55 Mike Rugg-Gunn
The next area internally that I'd like to look at is business models. A business model is really just the logic of how a business creates value, and in digital businesses it's very different. This is because digital work takes place in dynamic and fluid work environments where things are changing very fast. Therefore, the winners are those who constantly review their business models for relevance, even when the business is doing well, and who check what the competition is doing with their business models too. There's a really good website, actually, for anybody not sure what a business model is, called businessmodel-x.com. I'd encourage people to go there to understand more about this. That is the enabler of technology, if you will.
00:11:58 Hannah (Host)
Yeah, absolutely. So Mike, within your book, you dive into a number of different areas of talent management, and what I'd love to do with you today is dip into each one of those. I think it's safe to say we're barely scratching the surface of what's actually in the book, so of course we'd recommend that everyone goes out, buys themselves a copy and reads it. But this hopefully gives people a flavor of what's in there.
The first section we'll dive into is recruitment. The question I want to ask here is, how do recruiters attract key digital talent to their business? That is a challenge we hear about time and time again from clients. We've probably been hearing it for a couple of years, and no one seems to have come up with the answer. So what's your view?
00:13:01 Mike Rugg-Gunn
The answer is multifaceted, as you might have guessed. The first thing is blindingly obvious: pay a competitive wage. We know as psychologists that money is never a satisfier, but it is a dissatisfier. People will be more likely to take headhunters' phone calls if they feel they're not being paid fairly, or if the market rate has moved above what they're currently being paid. So do get that bit right. As a defense mechanism, that will tend to retain more people.
Next, look at technology-specific communities. Slack, for example, is a business communication platform with both open and private channels, and I think that would be one avenue to try.
Look internally as well. There's a really good example on the Saville Assessment website of what you did with Ricoh Europe. They were going through a strategic review and were about to lay off a number of people who were competent in role but not part of the strategy going forward. From my understanding, you assessed their suitability to undertake digital roles in the future. A number of those people went through that and were trained and developed, and Ricoh Europe found 100 people for hard-to-fill roles. For me, that's a cracking example of looking internally and using assessment techniques for the benefit of people going forward.
00:14:41 Hannah (Host)
It really is.
00:14:42 Mike Rugg-Gunn
I think those people would be really grateful. They kept their roles in the same organization and learned new skills. And from the business point of view, these are people who are now acculturated.
00:14:55 Hannah (Host)
Yes. So that links back to the culture piece.
00:14:58 Mike Rugg-Gunn
It does. And you're de-risking their appointment as a result. They're much more likely to stay with you now, because they've been treated very fairly, given a good chance and developed in role as well. So that's one area.
It also pays to build relationships. It does in any recruitment, but it's critical with IT talent. It's no good going to the market once someone has resigned, speaking to a web developer and saying, "Come and join us," because they've already been approached by your competitors. You need to have built relationships over a period of time. Relationship building should be a matter of course. You can't have transactional recruitment in that way. It just doesn't work anymore.
The final thing is to look at new sources of innovation. It takes one to know one, so referrals are one real avenue to look at. There's a business called Real Links that runs something called a referral jam. This is where you get employees from your own business together for a half-hour online jam, where they produce referrals from their contacts. There's a really good case study on the Real Links website of the work they did with Ocado, where they got 354 referrals within half an hour.
00:16:25 Hannah (Host)
That's pretty impressive.
00:16:26 Mike Rugg-Gunn
It is. It's that sort of use of technology for hard-to-fill roles that I think is quite innovative and quite different, and certainly something people could consider.
00:16:36 Hannah (Host)
Definitely.
00:16:37 Mike Rugg-Gunn
So in summary, keep it relational, not transactional. Do offer learning and development, particularly informal learning in the flow of work rather than classroom-oriented learning. Offer meaningful work rather than repetitive work. And offer work that is highly collaborative, rather than stovepiped work in hierarchical settings. Most digital talent these days expects to work in agile environments. If you're offering all that, I think you stand the best chance of recruiting the best talent going forward.
00:17:18 Hannah (Host)
Excellent summary. Thank you, Mike. Let's dive specifically into selection now, which is part of recruitment but much more specific. You argue in the book that for high-stakes selection in digital businesses, we're actually not measuring the right things. Tell us a little bit about that.
00:17:46 Mike Rugg-Gunn
Yes. When we're doing high-stakes selection, we're usually measuring the same competencies: commercial acumen, strategic thinking, communicating and influencing, relationship building, teamworking and all that good stuff. You still need to measure some of those, but in the digital world there are new behaviors you need to measure too.
I'll give you a practical example using the competency of creativity and innovation. You would probably want to assess a senior leader for their ability to set out a culture of creative and innovative thinking, recognize and reward those who do it really well, generate bright ideas, and celebrate those ideas when they're brought to market as a new product. That's what you'd be expected to measure. In the digital sense, though, you'd also be measuring their ability to conduct A/B testing on platforms, trialing new ideas with customers to get real-time feedback on their likely acceptance in the marketplace. I'd expect to see a lot more of those sorts of questions being asked, with the view that this sort of testing delivers minimum viable prototypes that you can test in the marketplace and assess for suitability. So it's those sorts of indicators of a core behavior around creativity and innovation that I'd be assessing for at the moment.
00:19:26 Hannah (Host)
So it's a different way of doing creativity.
00:19:30 Mike Rugg-Gunn
Yes, it is. It's not throwing the old ways out. They still matter. If you're assessing customer focus for a sales director, for example, you'd still want somebody who goes out and meets customers, looks them in the eye, has highly developed influencing and persuasion skills and can seal the deal. But they've also got to do the new stuff. They have to use technology to understand customer buying intent, make sure they're fully up to date with the real-time data coming through, and adapt their sales techniques accordingly.
00:20:06 Hannah (Host)
So it's that comfort with data, and the ability to pick it up and use it to help them make decisions about where they should focus.
00:20:14 Mike Rugg-Gunn
And to interrogate platforms to give you early warning of changes in customer behavior. That keeps you ahead of the competition. You're not waiting for surveys or focus groups now. You can action that stuff now and react to it quickly.
00:20:32 Hannah (Host)
So how might your assessment process change? Do we need to do things differently there?
00:20:38 Mike Rugg-Gunn
I think we do, because some of the behaviors are going to change. Generally speaking, digital roles work in quite fluid and dynamic environments. There's probably more complexity now because things are changing so quickly, and that puts a premium on intellectual and aptitude skills.
00:21:00 Hannah (Host)
We were talking about this earlier, actually.
00:21:03 Mike Rugg-Gunn
It does matter that people are comfortable making sound judgments under conditions of uncertainty. We're able to measure that psychometrically, as you know, but I think it's much more to the fore now than it has been with analog businesses in the past.
00:21:18 Hannah (Host)
Yes, definitely.
00:21:22 Mike Rugg-Gunn
Yes.
00:21:23 Hannah (Host)
So thinking now about employee retention.
00:21:28 Mike Rugg-Gunn
Yes.
00:21:29 Hannah (Host)
You're quite critical of annual appraisal systems, and I don't think you're alone there. But in your view, what should replace them? What else should be happening?
00:21:47 Mike Rugg-Gunn
There is no more reviled process in businesses than the annual appraisal review. It's disliked intensely by both the appraiser and the appraisee, for its backward-facing and judgmental nature, and the belief that nothing ever happens as a result. It just sits as a form somewhere and gathers dust. That's the bad news.
The good news is that digital technologies enable a new performance management dawn to emerge. One that is future-focused rather than backward-focused, developmental rather than judgmental, data-driven rather than subjective, and evaluated within the context of team performance. That last point is really important. It's not just about individual contributions. We're looking at how that individual works effectively within project teams, particularly agile project teams.
That means feedback needs to change, and goal setting needs to change as well. If we talk about feedback first, I think it's an erroneous assumption that senior leaders all have both the willingness and the knowledge to give feedback effectively. Some of them don't. We know that.
00:23:17 Hannah (Host)
Why do you think that is?
00:23:18 Mike Rugg-Gunn
Well, some of them find it difficult. Technical leaders in particular have difficulty with it. But we know from research that increasing feedback from around 3.8 sessions a week over a three-week period to ten significantly increased work performance, because it strengthens the relationship between the line manager and the team member, and we know that correlates with improved performance. So there's now a really pressing need to ensure that all line managers, even if they only manage one person, have good feedback training. They know how to do it, and hopefully they're motivated to do it effectively, because that leads to better performance. And that means there's really no need for an annual review, because through a talent platform, feedback is happening regularly, certainly weekly.
Allied to that is the need to set goals constantly as well. We know from psychology that setting ambitious but achievable goals is a motivator, and certainly better than setting easy goals or no goals at all. The beauty of digital transformation is that you can alter the goals as you go along. In other words, you're not setting a goal in the annual review in January that you then review in December. That's pointless these days. The world is far too fractionalized.
00:24:50 Hannah (Host)
Things change too fast.
00:24:51 Mike Rugg-Gunn
They do. But talent platforms enable you to set goals much more regularly and keep them flexible, and as and when they're accomplished or not, new goals can be set. So you might actually have a series of six changing goals over a 12-month period. There's a new performance management dawn on the horizon, and not before time.
00:25:13 Hannah (Host)
How ready do you think organizations are for that?
00:25:16 Mike Rugg-Gunn
Well, it has to be done with a talent platform. I see some organizations doing it well and some not doing it at all. But if you really want to keep digital talent, you do have to keep people motivated. Most people leave, unfortunately, because they don't get on with their boss. So training the boss to give feedback effectively and ensuring good communication between them and their team members is absolutely key.
00:25:53 Hannah (Host)
You talked there about seeing some organizations do this really well and some not. So what are the differentiating factors? What are the organizations doing this well doing that the others aren't?
00:26:08 Mike Rugg-Gunn
I think they've invested not just in talent platforms, but in their HR teams as well. They're giving them the skills to adapt to digital work environments and making sure they're upskilled as HR business partners to make the very best use of the tools coming their way. That's a key differentiator these days. HR is often at the bottom of the list, both for IT investment in platforms and sometimes for training. That needs to change.
00:26:44 Hannah (Host)
Definitely. And I guess we're segueing quite nicely into development territory here. You talked about feedback being developmental and not judgmental, and that link to constant appraisal rather than annual appraisal. The question I want to ask here is, how effective is digital learning? You talked earlier about the new world post-pandemic, with homeworking and hybrid working. We've certainly run more virtual training courses than face-to-face courses since the pandemic. It's the new way of doing things. People no longer fly colleagues across the world to meet in one place for a training course. It tends to be digital. So how effective do you think digital learning is?
00:27:45 Mike Rugg-Gunn
Just as effective as face to face is the very short answer. But you're quite right to say that online learning has increased dramatically. Pre-pandemic, about a third of training and development interventions were online. During the pandemic, that rose to at least half, and it's carried on that way post-pandemic. It's saving a lot of money as a result, in just the way you described. I think it's actually less about the modality of learning and more about a number of other factors that affect the quality of learning. For example, the quality of the instructor and how present they are during the learning intervention.
00:28:30 Hannah (Host)
Do you think the instructor needs different skills in a digital, virtual setting compared to a face-to-face setting?
00:28:41 Mike Rugg-Gunn
I do, yes. Probably being more expressive in many ways, because one of the issues with digital, which we also find with Zoom, is that it filters out nonverbal behaviors. It's much more difficult to read a person's body language through Zoom than it is face to face. So yes, there is a big difference between the two.
Other issues are around the quality of learner interaction. You can still interact really well in an online learning environment. You use chat boxes or raise your hand to communicate. Support outside the classroom matters too, and you can do that both virtually and in person.
A couple of other issues are unique to the online learning environment. Firstly, making sure everybody's comfortable with the technology. That means having some sort of induction program beforehand to take people through it virtually, so they know how to operate it and can make the best use of the learning and development that's available. And I think learning overall is best done in the flow of work: just in time, just enough and just for me.
00:30:03 Hannah (Host)
Absolutely. I could not agree more. Staying on that for a moment, how do you do that most effectively? If you think about what you've seen organizations do over the years.
00:30:21 Mike Rugg-Gunn
Yes. Okay.
00:30:22 Hannah (Host)
What advice would you give people who are thinking about setting that sort of thing up?
00:30:26 Mike Rugg-Gunn
One piece of advice I give to learning and development professionals is don't be swayed by the bells and whistles of new technologies. The old theories about the principles of applied human learning, and the transfer of training from the classroom to the workplace, still matter. I know they were written 30, 40 or 50 years ago, but they're still relevant now. New technology is not a reason to discard those in pursuit of trendier ways of learning, so to speak. That's not going to help transfer learning from the classroom to the workplace, and that's what we're after, because that's how people adopt new and different behaviors to achieve a commercial goal, which is my definition of learning.
00:31:17 Hannah (Host)
Absolutely. And linking to the post-pandemic world and hybrid working, one thing that comes up a lot in my conversations with clients in the learning and development space is about more junior employees who joined the organization during or after the pandemic. For them, this isn't a new world. This is the world. But what maybe hasn't caught up is what I hear referred to as learning by osmosis. In our old world, that would be sitting amongst your colleagues, overhearing conversations and listening to them on the phone. It's much less structured, very much on the job.
00:32:06 Mike Rugg-Gunn
Yes.
00:32:08 Hannah (Host)
But we get so much less of that now that we're all sitting on our own, in our homes, at our desks. Have you got any thoughts on how to manage that type of learning?
00:32:20 Mike Rugg-Gunn
Learning in the flow of work is clearly one. There's also a greater understanding that people can learn through their mobile phones and take that learning with them anywhere they want. So you can take it on the commute with you, if you will. Using modern technologies so that people learn wherever they happen to be, whenever they want to learn, is certainly a way forward.
00:32:47 Hannah (Host)
That's a very good point. I did an online course on my phone on the way in this morning.
00:32:50 Mike Rugg-Gunn
Fantastic. Okay, good.
00:32:55 Hannah (Host)
So maybe we'll finish up by thinking about where we go from here. Maybe I'm a bit premature to say finishing up, because I've got a few questions on this topic. First of all, what do you think the implications of digital transformation are for HR and talent teams? What will they need to be doing differently?
00:33:22 Mike Rugg-Gunn
Yes, sure. A number of years ago, IBM came up with the notion of HR 3.0, which contains ten points. If I briefly run through those in succession, I think that may be helpful.
Firstly, HR teams should be measuring employee performance continuously, just in the way you described earlier. There's no use waiting for the annual appraisal. That now forms a key part of performance management.
Secondly, investing in new leadership skills. Leaders are going to have to adapt to changes in their work and in technology and adopt new skill sets, and that includes HR business partners too, as we talked about earlier.
Next, HR has to feel comfortable designing and managing agile project teams, understanding how to do that really well and training people to work effectively in teams. Sometimes I don't think team training gets the high profile it should. You just put people into a team and assume they're going to collaborate and communicate effectively. Actually, they need to be taught how to do that, and team training is a vital component.
Next, they need to consider paying for performance rather than tenure. It's not how long you've been in the organization that determines your pay rise at the end of the year, it's how you're performing. For some organizations, that's going to be quite a quantum shift.
00:35:01 Hannah (Host)
Yes.
00:35:02 Mike Rugg-Gunn
We've also described learning in the flow of work, whether that's learning on your mobile phone on the way into work, and giving people the flexibility and the toolkit to develop themselves really effectively. That's important. So is modernizing HR technology systems and investing in the best platforms to enable people to do the very best job they can.
And critically, applying data-driven insights. This introduces us to the relatively emerging science of people analytics. There's even an MSc course in people analytics at the University of Hull.
00:35:47 Hannah (Host)
So interesting.
00:35:48 Mike Rugg-Gunn
That's why I say it's an emerging science. But the data suggests it has not had the take-up amongst HR that you might expect.
00:36:00 Hannah (Host)
And why do you think that is?
00:36:03 Mike Rugg-Gunn
I think because it is quantitative, and some people find that very dry and cold by nature, so they'd be put off by it.
00:36:18 Hannah (Host)
Possibly find it a bit daunting.
00:36:20 Mike Rugg-Gunn
I think so, and possibly it's not the reason they came into HR, to attach numbers to people.
00:36:25 Hannah (Host)
Yes.
00:36:25 Mike Rugg-Gunn
And therefore they're put off by it. But if they use it correctly, it does enable them, or senior leaders, to ask different questions of HR teams. For example, rather than asking, "What is the attrition rate in our business?" you might ask, "What are the people factors that are impacting business performance?" That's a different, more strategic question, and it's driven by the sort of data that people analytics will generate.
00:37:00 Hannah (Host)
How do you instill a desire in more HR folk to get into that stuff?
00:37:12 Mike Rugg-Gunn
It's a difficult question. I think HR teams will have to incorporate more analysts than has been the case in the past, especially people who are comfortable in this arena, to generate this data, make sure it's valid and reliable for decision-making purposes, and feed it to the HR team and senior leaders. Because it is predictive, as we know, if it's used properly.
00:37:40 Hannah (Host)
Absolutely.
00:37:41 Mike Rugg-Gunn
The evidence suggests that only about 10% of HR teams have achieved what you've just described, which is the basic HR 3.0. But I think it's important they change, because there are some people out there who would seek to take away some traditional aspects of HR and put them under a different hat or a different authority.
I'll give you an example of what I mean. Some senior leaders view recruitment as so important now, because the talent equation is so vital, that they see it being taken out of HR and given to a senior director at board level. That's because of the skill sets and behaviors required of recruiters: aggressive, invasive, highly focused and highly energetic. They see HR as being everything you do once someone has joined the company, which is a different skill set from the one recruiters need to adopt going forward, and they don't see those two sets of behaviors sitting comfortably under the same roof.
00:38:54 Hannah (Host)
Interesting.
00:38:55 Mike Rugg-Gunn
HR people watching this podcast will probably rail against that, but I just put it out there as a thought, because some senior leaders are taking that viewpoint going forward. It's one way to make sure the right talent is delivered to the business at the right time.
00:39:19 Hannah (Host)
Really interesting. I think that's a whole other podcast episode we could do on that topic. You suggest in the book, Mike, that the digital revolution spells the end of jobs as a structural unit of work. Tell us a bit about that.
00:39:42 Mike Rugg-Gunn
Yes. It's not my thought. It comes from two good sources. One is a book called The End of Jobs by Jeff Wald. The other is a researcher at Deloitte in New York, Sue Cantrell, and they both write quite extensively on this. It comes from the viewpoint that work is becoming much more fractionalized and much more project-focused. The key structural unit that determines membership of your project team is not going to be your job role anymore. It's the skills that you bring. So the work of the future is seen as people with complementary skill sets who swarm around a particular project, complete that project, disband, and may reform some time later, perhaps for a different organization, to attack a project in the same way. It's the complementarity of the skills, rather than the job title, that determines membership of those project teams going forward.
That's part and parcel of on-demand talent, which is one reason why so many people are working in the gig economy these days, and that's predicted to keep growing. It's been caused by a number of other things as well. There's a worldwide skills gap, particularly in digital talent. Even China, with its huge population, can't get enough digital talent into its businesses, and again has to turn to on-demand talent to do that. Work is becoming more fractionalized in the way I've described. It's more broken up and more project-based, and people are being paid per project rather than per hour. Team-based work is much more to the fore than has ever been the case, particularly agile teams, so people need competencies in working in agile teams as well.
More holistically, organizations have to move away from traditional structures. Very big organizations are struggling to get people to work for them these days. Young talent coming in prefers to work for nimbler, trendier, more agile organizations, so big organizations are struggling to compete for talent in that area.
00:42:00 Hannah (Host)
Absolutely. And I've certainly heard a number of larger organization clients talk about the fact that they are pivoting to skills, for the reasons you've described. For huge multinationals, that is a task and a half. What do you think the main challenges are going to be for those really big organizations trying to do this?
00:42:31 Mike Rugg-Gunn
They have to make themselves a whole lot more attractive to younger talent coming in, and they have to start thinking about how they go about attracting digital talent to the business. There's a really good case study by Cisco UK, who went into schools with a pathways project designed for 11 to 12 year olds, just at the time when people are thinking about their careers. Two things in particular came out of that project. One was that it increased the ratio of BAME and female children interested in pursuing a STEM career. And secondly, 70% of them said they would consider a job with Cisco when leaving school, either as an apprentice or in a full-time role. So getting in early like that organization, going into schools and universities and putting themselves out there, is one way around it.
Secondly, they've got to wake up to the fact that people don't want to work for stovepiped, hierarchical organizations anymore. The world of work just isn't about that, and they need to change rapidly. Otherwise, they'll be disrupted.
00:43:51 Hannah (Host)
Absolutely.
00:43:53 Hannah (Host)
And coming back to data and platforms, having the information you need so you can pull together teams in the way you need to, when you need to, is really critical.
00:44:12 Mike Rugg-Gunn
Yes. And having a flexible, responsive work culture and environment, where people are comfortable working in those sorts of ways and regard work as fun.
00:44:23 Hannah (Host)
And finally, something we've touched on at a couple of points in our conversation, and a really important thing to think about in this context. You discuss diversity and inclusion extensively across the book. What would you say are the key messages for the future here?
00:44:48 Mike Rugg-Gunn
With the shortage of digital talent, or just talent as a whole in the Western world, it makes real commercial sense to cast the net as wide as possible, to give yourself the best chance of employing people who can help you achieve your business goals. So there's a commercial reason to do that. I think artificial intelligence actually helps diversity and inclusion, because it can eliminate bias in both recruitment and selection when it's used appropriately and effectively. So that's a positive going forward.
Moving on, there is some advice I would give around training and development on diversity, and that is not to mandate it. Don't make it a compliance objective. Don't design and develop specific courses around it. Rather, make it part of every learning and development intervention that happens in your business. That way it becomes culturally embedded, and it's much more likely to find acceptance rather than being regarded as a compliance objective.
00:46:07 Hannah (Host)
So you're not doing it to people.
00:46:12 Mike Rugg-Gunn
It just becomes part of how we do work around here. We treat people fairly and equitably, and everyone is treated as they would expect to be treated. And I think that leads us to a slightly different definition of fairness than has traditionally been the case. There's research that suggests people don't actually want to be treated the same. They want to be treated according to who they are as people, where they are in their working life, their personal value set and the quality of work they do. That's one point. And I think people from ethnic minorities don't want to be picked because they come from ethnic minorities, or because they're female, or anything else. Frankly, they want to be picked because they will do a really good job, and their diversity variable is not part of that consideration for them. So there's a shift in opinion in those two areas that I think is important for people to consider when designing diversity interventions going forward.
00:47:21 Hannah (Host)
So rather than, say, designing and running a women in leadership program, it's more about running a leadership program but making sure you have a properly representative demographic as part of your cohort.
00:47:40 Mike Rugg-Gunn
Yes. I'm not averse to women being given supportive learning and development, particularly as in most countries of the world they are still the main caregivers these days, which means they may have missed out on some development that men have had access to. So in that context, I'm comfortable that it happens. But training people on diversity and inclusion specifically is best done as part and parcel of every other training intervention you do.
00:48:14 Hannah (Host)
I see.
00:48:15 Mike Rugg-Gunn
Rather than as a one-off.
00:48:16 Hannah (Host)
Yes, that makes sense. Mike, it has been an absolute pleasure. Thank you so much for joining us today.
00:48:25 Mike Rugg-Gunn
Thank you.
00:48:28 Hannah (Host)
Take care.
00:48:38 Hannah (Host)
We hope you've enjoyed today's episode of the Deep Dive. If you have, please remember to like and subscribe, and stay tuned for all our latest content. If you want more information on any of the topics you've heard today, check out the show notes for case studies, resources and articles. I've been Hannah Mullaney. See you next time on the Deep Dive.
Hello and welcome to the Deep Dive. I'm Hannah Mullaney, Client Solutions Director at Saville Assessment, and each episode I'll be joined by an industry expert to discuss the hottest topics in assessment today. Let's dive in.
00:00:20 Hannah (Host)
Hello. In today's episode, we're talking about managing talent in a digital age. I'm joined by Mike Rugg-Gunn, who's written an excellent and very interesting book on this topic. Welcome, Mike.
00:00:34 Mike Rugg-Gunn
Hi, Hannah.
00:00:35 Hannah (Host)
Mike, you start the book by talking about the importance of the business context. How does the business context impact talent management strategies and solutions?
00:00:48 Mike Rugg-Gunn
Well, it's a very large topic, and it's impacted by both external and internal factors. If you look at external factors, the most important one at the moment is AI. There is no part of talent management that is not impacted by artificial intelligence. Recruitment in particular is impacted by machine learning that's able to reduce the cost of hire and free up recruiters to do more meaningful and strategic work than they perhaps have been able to do in the past. In selection, we also see volume assessment processes being automated, again reducing the cost of hire. In retention, it is helping to predict attrition and measure performance. And finally, in learning and development, it's able to personalize learning pathways, based on machine learning that can estimate the impact of different learning content. So across all areas, AI is making a big difference.
The critical thing here is to understand that, just as we are naturally concerned about the ethics of AI generally, that matters in talent management too. I can give you one particular example in facial recognition. Recent research has shown that African American and Asian faces have been misidentified 10 to 100 times more than Caucasian faces. That research came out of airport surveillance, but it has proved relevant to talent management too, which is why facial recognition has been dropped from video interview processes by organizations such as HireVue. So there are dangers out there, and AI does need some constraints on it, not just in talent management, I would suggest, but nationally and globally.
So AI is the first thing. The second area, I guess, is data. More data traverses the internet every second now than was stored 20 years ago. If you speak to senior leaders and managers, they say it's like a fire hose coming at them. They're being drowned and drenched in it. There's a real need to understand how to make the very best use of the data coming through, whether that's structured or unstructured. I think one solution is to have a data strategy. That's about identifying, collecting, collating, warehousing and democratizing data, so the people who need it have easy access to it when they need it, to make the right choices going forward. That's a particular challenge for people at the moment.
The next area is understanding the difference between digital transformation and digital disruption. People sometimes tend to confuse the two. Digital disruption, if we deal with that one first, is much rarer. This is where a new entrant comes into the marketplace with an offer that creates so much value that the existing businesses can't compete. It's usually a platform-based business that disrupts a product business. I'll give you an example of what I mean. InterContinental Hotels Group, which owns the Holiday Inn brand, started in 1954, has over 6,300 hotels and resorts globally, and has a market capitalization of about 12 billion US dollars. It has been disrupted, as most hotel groups have, by Airbnb, which started in 2008, has no hotels and no hotel staff at all, and has a market capitalization of 100 billion US dollars. In other words, around eight times that of InterContinental Hotels.
00:05:01 Hannah (Host)
That's some disruption.
00:05:02 Mike Rugg-Gunn
It is some disruption, and it shows the value of platforms over products. Digital transformation is much more common. That's where businesses are evolving business models that are new and different, to provide and create value for customers, employees and shareholders. So I maintain in the book that digital disruption is quite rare. You might see it with Airbnb, Uber and Netflix, but digital transformation is much more common.
The pandemic had a transformative effect across both consumers and the wider population. Behaviors that were predicted to change over three or four years actually changed over three or four months. The most obvious one in terms of talent management is people working from home, which is now so-called hybrid working. I think the cat's out of the bag now, and I don't think it's going to change any time soon. But the honest assessment is that there is a tension between leaders who want their workers back in the office and workers who have found newfound freedoms and really don't want to go back to the boring commute.
00:06:25 Hannah (Host)
Five days a week.
00:06:26 Mike Rugg-Gunn
Absolutely. So this has had a significant effect on people's working habits and has impacted talent management in many ways. The other element I discuss is the growth of the gig economy, which is freelancers. Some people predict that by 2040, 40 to 50% of employees will be working on their own. Large organizations find it really quite difficult to recruit these gig economy workers. Freelancers understand their value in the talent market, particularly digital talent, and they want to work on their own because that gives them the flexibility to work with whom they want, when they want and where they want. That's a challenge, particularly for HR business partners, in understanding how to blend full-time employees with gig economy workers to provide a cost-effective solution to their talent needs.
00:07:32 Hannah (Host)
And I guess that's where data is really important, right?
00:07:35 Mike Rugg-Gunn
Yes, it is. Absolutely critical, and getting the right sort of data to understand what is going to make the best choice.
00:07:46 Hannah (Host)
That idea of democratizing data is really, really interesting.
00:07:50 Mike Rugg-Gunn
It is. Sharing it with everybody.
00:07:52 Hannah (Host)
Yes, definitely. Giving everyone access to the power that it gives.
00:07:59 Mike Rugg-Gunn
Indeed. And we just touched on the importance of unstructured data. Structured data tends to be more quantitative, but what's really exciting today is unstructured data, which is much more qualitative in nature. A lot of it comes from social media, and how you clean and gather that and check it for reliability and validity, to make sure it's fit for decision-making purposes, is a really interesting challenge. But it does provide insights that are much richer in detail than you sometimes get from more established quantitative data sources.
00:08:35 Hannah (Host)
Interesting.
00:08:36 Mike Rugg-Gunn
Internally, talent management is impacted by strategy and the rules of strategy. You've probably followed Michael Porter, who has been writing about business strategy for about 30 or 40 years. Some of his rules and models still hold sway, but some of them have changed, because digital transformation and digital disruption have changed the rules of competition. For example, they've encouraged a two-way conversation between the business and the consumer, and it's now possible to personalize content for each consumer. These weren't imaginable 20 or 30 years ago. So parts of his theories are still relevant, but you have to adapt them for the new world that's upon us right now.
The other area I'd certainly like to talk about is culture. Peter Drucker said that culture eats strategy for breakfast, and I think he's right. You can have the best strategy in the world going forward, but it means nothing if you don't have an enabling culture to action it in the business. I talk quite a lot about culture in the book, because I see it as a vital component. The key element in terms of talent management is how you take your employees with you when you are seeking to change culture and get them to adopt new behaviors that are relevant for the digital age. That's best done by keeping some areas of the old culture in place, so they act almost like a cultural guardrail for employees as they move towards a new culture. That way, they feel comfortable and happy with the transition, and they won't feel they're moving too quickly or be alienated by what's in front of them.
00:10:28 Hannah (Host)
So it's not a wholesale change. It's incremental steps.
00:10:33 Mike Rugg-Gunn
Yes, and I think that's really important. You need to take people with you all the time. If you are scaling up at pace, as some digital businesses will, and you don't take everyone with you, or they feel culturally disconnected, then frankly I think you risk disaster in your scale-up attempts.
00:10:54 Hannah (Host)
Absolutely.
00:10:55 Mike Rugg-Gunn
The next area internally that I'd like to look at is business models. A business model is really just the logic of how a business creates value, and in digital businesses it's very different. This is because digital work takes place in dynamic and fluid work environments where things are changing very fast. Therefore, the winners are those who constantly review their business models for relevance, even when the business is doing well, and who check what the competition is doing with their business models too. There's a really good website, actually, for anybody not sure what a business model is, called businessmodel-x.com. I'd encourage people to go there to understand more about this. That is the enabler of technology, if you will.
00:11:58 Hannah (Host)
Yeah, absolutely. So Mike, within your book, you dive into a number of different areas of talent management, and what I'd love to do with you today is dip into each one of those. I think it's safe to say we're barely scratching the surface of what's actually in the book, so of course we'd recommend that everyone goes out, buys themselves a copy and reads it. But this hopefully gives people a flavor of what's in there.
The first section we'll dive into is recruitment. The question I want to ask here is, how do recruiters attract key digital talent to their business? That is a challenge we hear about time and time again from clients. We've probably been hearing it for a couple of years, and no one seems to have come up with the answer. So what's your view?
00:13:01 Mike Rugg-Gunn
The answer is multifaceted, as you might have guessed. The first thing is blindingly obvious: pay a competitive wage. We know as psychologists that money is never a satisfier, but it is a dissatisfier. People will be more likely to take headhunters' phone calls if they feel they're not being paid fairly, or if the market rate has moved above what they're currently being paid. So do get that bit right. As a defense mechanism, that will tend to retain more people.
Next, look at technology-specific communities. Slack, for example, is a business communication platform with both open and private channels, and I think that would be one avenue to try.
Look internally as well. There's a really good example on the Saville Assessment website of what you did with Ricoh Europe. They were going through a strategic review and were about to lay off a number of people who were competent in role but not part of the strategy going forward. From my understanding, you assessed their suitability to undertake digital roles in the future. A number of those people went through that and were trained and developed, and Ricoh Europe found 100 people for hard-to-fill roles. For me, that's a cracking example of looking internally and using assessment techniques for the benefit of people going forward.
00:14:41 Hannah (Host)
It really is.
00:14:42 Mike Rugg-Gunn
I think those people would be really grateful. They kept their roles in the same organization and learned new skills. And from the business point of view, these are people who are now acculturated.
00:14:55 Hannah (Host)
Yes. So that links back to the culture piece.
00:14:58 Mike Rugg-Gunn
It does. And you're de-risking their appointment as a result. They're much more likely to stay with you now, because they've been treated very fairly, given a good chance and developed in role as well. So that's one area.
It also pays to build relationships. It does in any recruitment, but it's critical with IT talent. It's no good going to the market once someone has resigned, speaking to a web developer and saying, "Come and join us," because they've already been approached by your competitors. You need to have built relationships over a period of time. Relationship building should be a matter of course. You can't have transactional recruitment in that way. It just doesn't work anymore.
The final thing is to look at new sources of innovation. It takes one to know one, so referrals are one real avenue to look at. There's a business called Real Links that runs something called a referral jam. This is where you get employees from your own business together for a half-hour online jam, where they produce referrals from their contacts. There's a really good case study on the Real Links website of the work they did with Ocado, where they got 354 referrals within half an hour.
00:16:25 Hannah (Host)
That's pretty impressive.
00:16:26 Mike Rugg-Gunn
It is. It's that sort of use of technology for hard-to-fill roles that I think is quite innovative and quite different, and certainly something people could consider.
00:16:36 Hannah (Host)
Definitely.
00:16:37 Mike Rugg-Gunn
So in summary, keep it relational, not transactional. Do offer learning and development, particularly informal learning in the flow of work rather than classroom-oriented learning. Offer meaningful work rather than repetitive work. And offer work that is highly collaborative, rather than stovepiped work in hierarchical settings. Most digital talent these days expects to work in agile environments. If you're offering all that, I think you stand the best chance of recruiting the best talent going forward.
00:17:18 Hannah (Host)
Excellent summary. Thank you, Mike. Let's dive specifically into selection now, which is part of recruitment but much more specific. You argue in the book that for high-stakes selection in digital businesses, we're actually not measuring the right things. Tell us a little bit about that.
00:17:46 Mike Rugg-Gunn
Yes. When we're doing high-stakes selection, we're usually measuring the same competencies: commercial acumen, strategic thinking, communicating and influencing, relationship building, teamworking and all that good stuff. You still need to measure some of those, but in the digital world there are new behaviors you need to measure too.
I'll give you a practical example using the competency of creativity and innovation. You would probably want to assess a senior leader for their ability to set out a culture of creative and innovative thinking, recognize and reward those who do it really well, generate bright ideas, and celebrate those ideas when they're brought to market as a new product. That's what you'd be expected to measure. In the digital sense, though, you'd also be measuring their ability to conduct A/B testing on platforms, trialing new ideas with customers to get real-time feedback on their likely acceptance in the marketplace. I'd expect to see a lot more of those sorts of questions being asked, with the view that this sort of testing delivers minimum viable prototypes that you can test in the marketplace and assess for suitability. So it's those sorts of indicators of a core behavior around creativity and innovation that I'd be assessing for at the moment.
00:19:26 Hannah (Host)
So it's a different way of doing creativity.
00:19:30 Mike Rugg-Gunn
Yes, it is. It's not throwing the old ways out. They still matter. If you're assessing customer focus for a sales director, for example, you'd still want somebody who goes out and meets customers, looks them in the eye, has highly developed influencing and persuasion skills and can seal the deal. But they've also got to do the new stuff. They have to use technology to understand customer buying intent, make sure they're fully up to date with the real-time data coming through, and adapt their sales techniques accordingly.
00:20:06 Hannah (Host)
So it's that comfort with data, and the ability to pick it up and use it to help them make decisions about where they should focus.
00:20:14 Mike Rugg-Gunn
And to interrogate platforms to give you early warning of changes in customer behavior. That keeps you ahead of the competition. You're not waiting for surveys or focus groups now. You can action that stuff now and react to it quickly.
00:20:32 Hannah (Host)
So how might your assessment process change? Do we need to do things differently there?
00:20:38 Mike Rugg-Gunn
I think we do, because some of the behaviors are going to change. Generally speaking, digital roles work in quite fluid and dynamic environments. There's probably more complexity now because things are changing so quickly, and that puts a premium on intellectual and aptitude skills.
00:21:00 Hannah (Host)
We were talking about this earlier, actually.
00:21:03 Mike Rugg-Gunn
It does matter that people are comfortable making sound judgments under conditions of uncertainty. We're able to measure that psychometrically, as you know, but I think it's much more to the fore now than it has been with analog businesses in the past.
00:21:18 Hannah (Host)
Yes, definitely.
00:21:22 Mike Rugg-Gunn
Yes.
00:21:23 Hannah (Host)
So thinking now about employee retention.
00:21:28 Mike Rugg-Gunn
Yes.
00:21:29 Hannah (Host)
You're quite critical of annual appraisal systems, and I don't think you're alone there. But in your view, what should replace them? What else should be happening?
00:21:47 Mike Rugg-Gunn
There is no more reviled process in businesses than the annual appraisal review. It's disliked intensely by both the appraiser and the appraisee, for its backward-facing and judgmental nature, and the belief that nothing ever happens as a result. It just sits as a form somewhere and gathers dust. That's the bad news.
The good news is that digital technologies enable a new performance management dawn to emerge. One that is future-focused rather than backward-focused, developmental rather than judgmental, data-driven rather than subjective, and evaluated within the context of team performance. That last point is really important. It's not just about individual contributions. We're looking at how that individual works effectively within project teams, particularly agile project teams.
That means feedback needs to change, and goal setting needs to change as well. If we talk about feedback first, I think it's an erroneous assumption that senior leaders all have both the willingness and the knowledge to give feedback effectively. Some of them don't. We know that.
00:23:17 Hannah (Host)
Why do you think that is?
00:23:18 Mike Rugg-Gunn
Well, some of them find it difficult. Technical leaders in particular have difficulty with it. But we know from research that increasing feedback from around 3.8 sessions a week over a three-week period to ten significantly increased work performance, because it strengthens the relationship between the line manager and the team member, and we know that correlates with improved performance. So there's now a really pressing need to ensure that all line managers, even if they only manage one person, have good feedback training. They know how to do it, and hopefully they're motivated to do it effectively, because that leads to better performance. And that means there's really no need for an annual review, because through a talent platform, feedback is happening regularly, certainly weekly.
Allied to that is the need to set goals constantly as well. We know from psychology that setting ambitious but achievable goals is a motivator, and certainly better than setting easy goals or no goals at all. The beauty of digital transformation is that you can alter the goals as you go along. In other words, you're not setting a goal in the annual review in January that you then review in December. That's pointless these days. The world is far too fractionalized.
00:24:50 Hannah (Host)
Things change too fast.
00:24:51 Mike Rugg-Gunn
They do. But talent platforms enable you to set goals much more regularly and keep them flexible, and as and when they're accomplished or not, new goals can be set. So you might actually have a series of six changing goals over a 12-month period. There's a new performance management dawn on the horizon, and not before time.
00:25:13 Hannah (Host)
How ready do you think organizations are for that?
00:25:16 Mike Rugg-Gunn
Well, it has to be done with a talent platform. I see some organizations doing it well and some not doing it at all. But if you really want to keep digital talent, you do have to keep people motivated. Most people leave, unfortunately, because they don't get on with their boss. So training the boss to give feedback effectively and ensuring good communication between them and their team members is absolutely key.
00:25:53 Hannah (Host)
You talked there about seeing some organizations do this really well and some not. So what are the differentiating factors? What are the organizations doing this well doing that the others aren't?
00:26:08 Mike Rugg-Gunn
I think they've invested not just in talent platforms, but in their HR teams as well. They're giving them the skills to adapt to digital work environments and making sure they're upskilled as HR business partners to make the very best use of the tools coming their way. That's a key differentiator these days. HR is often at the bottom of the list, both for IT investment in platforms and sometimes for training. That needs to change.
00:26:44 Hannah (Host)
Definitely. And I guess we're segueing quite nicely into development territory here. You talked about feedback being developmental and not judgmental, and that link to constant appraisal rather than annual appraisal. The question I want to ask here is, how effective is digital learning? You talked earlier about the new world post-pandemic, with homeworking and hybrid working. We've certainly run more virtual training courses than face-to-face courses since the pandemic. It's the new way of doing things. People no longer fly colleagues across the world to meet in one place for a training course. It tends to be digital. So how effective do you think digital learning is?
00:27:45 Mike Rugg-Gunn
Just as effective as face to face is the very short answer. But you're quite right to say that online learning has increased dramatically. Pre-pandemic, about a third of training and development interventions were online. During the pandemic, that rose to at least half, and it's carried on that way post-pandemic. It's saving a lot of money as a result, in just the way you described. I think it's actually less about the modality of learning and more about a number of other factors that affect the quality of learning. For example, the quality of the instructor and how present they are during the learning intervention.
00:28:30 Hannah (Host)
Do you think the instructor needs different skills in a digital, virtual setting compared to a face-to-face setting?
00:28:41 Mike Rugg-Gunn
I do, yes. Probably being more expressive in many ways, because one of the issues with digital, which we also find with Zoom, is that it filters out nonverbal behaviors. It's much more difficult to read a person's body language through Zoom than it is face to face. So yes, there is a big difference between the two.
Other issues are around the quality of learner interaction. You can still interact really well in an online learning environment. You use chat boxes or raise your hand to communicate. Support outside the classroom matters too, and you can do that both virtually and in person.
A couple of other issues are unique to the online learning environment. Firstly, making sure everybody's comfortable with the technology. That means having some sort of induction program beforehand to take people through it virtually, so they know how to operate it and can make the best use of the learning and development that's available. And I think learning overall is best done in the flow of work: just in time, just enough and just for me.
00:30:03 Hannah (Host)
Absolutely. I could not agree more. Staying on that for a moment, how do you do that most effectively? If you think about what you've seen organizations do over the years.
00:30:21 Mike Rugg-Gunn
Yes. Okay.
00:30:22 Hannah (Host)
What advice would you give people who are thinking about setting that sort of thing up?
00:30:26 Mike Rugg-Gunn
One piece of advice I give to learning and development professionals is don't be swayed by the bells and whistles of new technologies. The old theories about the principles of applied human learning, and the transfer of training from the classroom to the workplace, still matter. I know they were written 30, 40 or 50 years ago, but they're still relevant now. New technology is not a reason to discard those in pursuit of trendier ways of learning, so to speak. That's not going to help transfer learning from the classroom to the workplace, and that's what we're after, because that's how people adopt new and different behaviors to achieve a commercial goal, which is my definition of learning.
00:31:17 Hannah (Host)
Absolutely. And linking to the post-pandemic world and hybrid working, one thing that comes up a lot in my conversations with clients in the learning and development space is about more junior employees who joined the organization during or after the pandemic. For them, this isn't a new world. This is the world. But what maybe hasn't caught up is what I hear referred to as learning by osmosis. In our old world, that would be sitting amongst your colleagues, overhearing conversations and listening to them on the phone. It's much less structured, very much on the job.
00:32:06 Mike Rugg-Gunn
Yes.
00:32:08 Hannah (Host)
But we get so much less of that now that we're all sitting on our own, in our homes, at our desks. Have you got any thoughts on how to manage that type of learning?
00:32:20 Mike Rugg-Gunn
Learning in the flow of work is clearly one. There's also a greater understanding that people can learn through their mobile phones and take that learning with them anywhere they want. So you can take it on the commute with you, if you will. Using modern technologies so that people learn wherever they happen to be, whenever they want to learn, is certainly a way forward.
00:32:47 Hannah (Host)
That's a very good point. I did an online course on my phone on the way in this morning.
00:32:50 Mike Rugg-Gunn
Fantastic. Okay, good.
00:32:55 Hannah (Host)
So maybe we'll finish up by thinking about where we go from here. Maybe I'm a bit premature to say finishing up, because I've got a few questions on this topic. First of all, what do you think the implications of digital transformation are for HR and talent teams? What will they need to be doing differently?
00:33:22 Mike Rugg-Gunn
Yes, sure. A number of years ago, IBM came up with the notion of HR 3.0, which contains ten points. If I briefly run through those in succession, I think that may be helpful.
Firstly, HR teams should be measuring employee performance continuously, just in the way you described earlier. There's no use waiting for the annual appraisal. That now forms a key part of performance management.
Secondly, investing in new leadership skills. Leaders are going to have to adapt to changes in their work and in technology and adopt new skill sets, and that includes HR business partners too, as we talked about earlier.
Next, HR has to feel comfortable designing and managing agile project teams, understanding how to do that really well and training people to work effectively in teams. Sometimes I don't think team training gets the high profile it should. You just put people into a team and assume they're going to collaborate and communicate effectively. Actually, they need to be taught how to do that, and team training is a vital component.
Next, they need to consider paying for performance rather than tenure. It's not how long you've been in the organization that determines your pay rise at the end of the year, it's how you're performing. For some organizations, that's going to be quite a quantum shift.
00:35:01 Hannah (Host)
Yes.
00:35:02 Mike Rugg-Gunn
We've also described learning in the flow of work, whether that's learning on your mobile phone on the way into work, and giving people the flexibility and the toolkit to develop themselves really effectively. That's important. So is modernizing HR technology systems and investing in the best platforms to enable people to do the very best job they can.
And critically, applying data-driven insights. This introduces us to the relatively emerging science of people analytics. There's even an MSc course in people analytics at the University of Hull.
00:35:47 Hannah (Host)
So interesting.
00:35:48 Mike Rugg-Gunn
That's why I say it's an emerging science. But the data suggests it has not had the take-up amongst HR that you might expect.
00:36:00 Hannah (Host)
And why do you think that is?
00:36:03 Mike Rugg-Gunn
I think because it is quantitative, and some people find that very dry and cold by nature, so they'd be put off by it.
00:36:18 Hannah (Host)
Possibly find it a bit daunting.
00:36:20 Mike Rugg-Gunn
I think so, and possibly it's not the reason they came into HR, to attach numbers to people.
00:36:25 Hannah (Host)
Yes.
00:36:25 Mike Rugg-Gunn
And therefore they're put off by it. But if they use it correctly, it does enable them, or senior leaders, to ask different questions of HR teams. For example, rather than asking, "What is the attrition rate in our business?" you might ask, "What are the people factors that are impacting business performance?" That's a different, more strategic question, and it's driven by the sort of data that people analytics will generate.
00:37:00 Hannah (Host)
How do you instill a desire in more HR folk to get into that stuff?
00:37:12 Mike Rugg-Gunn
It's a difficult question. I think HR teams will have to incorporate more analysts than has been the case in the past, especially people who are comfortable in this arena, to generate this data, make sure it's valid and reliable for decision-making purposes, and feed it to the HR team and senior leaders. Because it is predictive, as we know, if it's used properly.
00:37:40 Hannah (Host)
Absolutely.
00:37:41 Mike Rugg-Gunn
The evidence suggests that only about 10% of HR teams have achieved what you've just described, which is the basic HR 3.0. But I think it's important they change, because there are some people out there who would seek to take away some traditional aspects of HR and put them under a different hat or a different authority.
I'll give you an example of what I mean. Some senior leaders view recruitment as so important now, because the talent equation is so vital, that they see it being taken out of HR and given to a senior director at board level. That's because of the skill sets and behaviors required of recruiters: aggressive, invasive, highly focused and highly energetic. They see HR as being everything you do once someone has joined the company, which is a different skill set from the one recruiters need to adopt going forward, and they don't see those two sets of behaviors sitting comfortably under the same roof.
00:38:54 Hannah (Host)
Interesting.
00:38:55 Mike Rugg-Gunn
HR people watching this podcast will probably rail against that, but I just put it out there as a thought, because some senior leaders are taking that viewpoint going forward. It's one way to make sure the right talent is delivered to the business at the right time.
00:39:19 Hannah (Host)
Really interesting. I think that's a whole other podcast episode we could do on that topic. You suggest in the book, Mike, that the digital revolution spells the end of jobs as a structural unit of work. Tell us a bit about that.
00:39:42 Mike Rugg-Gunn
Yes. It's not my thought. It comes from two good sources. One is a book called The End of Jobs by Jeff Wald. The other is a researcher at Deloitte in New York, Sue Cantrell, and they both write quite extensively on this. It comes from the viewpoint that work is becoming much more fractionalized and much more project-focused. The key structural unit that determines membership of your project team is not going to be your job role anymore. It's the skills that you bring. So the work of the future is seen as people with complementary skill sets who swarm around a particular project, complete that project, disband, and may reform some time later, perhaps for a different organization, to attack a project in the same way. It's the complementarity of the skills, rather than the job title, that determines membership of those project teams going forward.
That's part and parcel of on-demand talent, which is one reason why so many people are working in the gig economy these days, and that's predicted to keep growing. It's been caused by a number of other things as well. There's a worldwide skills gap, particularly in digital talent. Even China, with its huge population, can't get enough digital talent into its businesses, and again has to turn to on-demand talent to do that. Work is becoming more fractionalized in the way I've described. It's more broken up and more project-based, and people are being paid per project rather than per hour. Team-based work is much more to the fore than has ever been the case, particularly agile teams, so people need competencies in working in agile teams as well.
More holistically, organizations have to move away from traditional structures. Very big organizations are struggling to get people to work for them these days. Young talent coming in prefers to work for nimbler, trendier, more agile organizations, so big organizations are struggling to compete for talent in that area.
00:42:00 Hannah (Host)
Absolutely. And I've certainly heard a number of larger organization clients talk about the fact that they are pivoting to skills, for the reasons you've described. For huge multinationals, that is a task and a half. What do you think the main challenges are going to be for those really big organizations trying to do this?
00:42:31 Mike Rugg-Gunn
They have to make themselves a whole lot more attractive to younger talent coming in, and they have to start thinking about how they go about attracting digital talent to the business. There's a really good case study by Cisco UK, who went into schools with a pathways project designed for 11 to 12 year olds, just at the time when people are thinking about their careers. Two things in particular came out of that project. One was that it increased the ratio of BAME and female children interested in pursuing a STEM career. And secondly, 70% of them said they would consider a job with Cisco when leaving school, either as an apprentice or in a full-time role. So getting in early like that organization, going into schools and universities and putting themselves out there, is one way around it.
Secondly, they've got to wake up to the fact that people don't want to work for stovepiped, hierarchical organizations anymore. The world of work just isn't about that, and they need to change rapidly. Otherwise, they'll be disrupted.
00:43:51 Hannah (Host)
Absolutely.
00:43:53 Hannah (Host)
And coming back to data and platforms, having the information you need so you can pull together teams in the way you need to, when you need to, is really critical.
00:44:12 Mike Rugg-Gunn
Yes. And having a flexible, responsive work culture and environment, where people are comfortable working in those sorts of ways and regard work as fun.
00:44:23 Hannah (Host)
And finally, something we've touched on at a couple of points in our conversation, and a really important thing to think about in this context. You discuss diversity and inclusion extensively across the book. What would you say are the key messages for the future here?
00:44:48 Mike Rugg-Gunn
With the shortage of digital talent, or just talent as a whole in the Western world, it makes real commercial sense to cast the net as wide as possible, to give yourself the best chance of employing people who can help you achieve your business goals. So there's a commercial reason to do that. I think artificial intelligence actually helps diversity and inclusion, because it can eliminate bias in both recruitment and selection when it's used appropriately and effectively. So that's a positive going forward.
Moving on, there is some advice I would give around training and development on diversity, and that is not to mandate it. Don't make it a compliance objective. Don't design and develop specific courses around it. Rather, make it part of every learning and development intervention that happens in your business. That way it becomes culturally embedded, and it's much more likely to find acceptance rather than being regarded as a compliance objective.
00:46:07 Hannah (Host)
So you're not doing it to people.
00:46:12 Mike Rugg-Gunn
It just becomes part of how we do work around here. We treat people fairly and equitably, and everyone is treated as they would expect to be treated. And I think that leads us to a slightly different definition of fairness than has traditionally been the case. There's research that suggests people don't actually want to be treated the same. They want to be treated according to who they are as people, where they are in their working life, their personal value set and the quality of work they do. That's one point. And I think people from ethnic minorities don't want to be picked because they come from ethnic minorities, or because they're female, or anything else. Frankly, they want to be picked because they will do a really good job, and their diversity variable is not part of that consideration for them. So there's a shift in opinion in those two areas that I think is important for people to consider when designing diversity interventions going forward.
00:47:21 Hannah (Host)
So rather than, say, designing and running a women in leadership program, it's more about running a leadership program but making sure you have a properly representative demographic as part of your cohort.
00:47:40 Mike Rugg-Gunn
Yes. I'm not averse to women being given supportive learning and development, particularly as in most countries of the world they are still the main caregivers these days, which means they may have missed out on some development that men have had access to. So in that context, I'm comfortable that it happens. But training people on diversity and inclusion specifically is best done as part and parcel of every other training intervention you do.
00:48:14 Hannah (Host)
I see.
00:48:15 Mike Rugg-Gunn
Rather than as a one-off.
00:48:16 Hannah (Host)
Yes, that makes sense. Mike, it has been an absolute pleasure. Thank you so much for joining us today.
00:48:25 Mike Rugg-Gunn
Thank you.
00:48:28 Hannah (Host)
Take care.
00:48:38 Hannah (Host)
We hope you've enjoyed today's episode of the Deep Dive. If you have, please remember to like and subscribe, and stay tuned for all our latest content. If you want more information on any of the topics you've heard today, check out the show notes for case studies, resources and articles. I've been Hannah Mullaney. See you next time on the Deep Dive.
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