Is talent management dead? Long live employee experience!

Talent management is dead! Don’t get me wrong: people still need to be managed but changing employee expectations demand a new approach to engaging, nurturing, and valuing your workforce. A shortage of talent with the right skills also means your future employees can afford to be choosy. If you don’t match what candidates are looking for, plenty of other employers will. Further, a Capgemini study found that more than 65% of executives agreed the gap between the skills their organizations needed and the ones that people possessed was widening.

So, what does today’s talent expect? Perceived thinking is that employees are looking for more than just ‘a job’. They want an experience, not management; a purpose, not just profit. This quest begins long before they join a company. Potential new hires will check out social media and read employee (current and former) reviews to get a feel for a company. They’ll also explore the brand’s publicly-stated commitments to the environment, social impact, diversity, and more.

In the end, they want to work somewhere they can grow and learn; where they feel part of a broader purpose. And where they have freedom to shape their own way of working. This is employee experience (EX) and now, more than ever, it has become an important differentiator in the talent market.

Better business outcomes

Shifting from talent management to employee experience has wider ramifications for the business beyond just recruitment and retention. We believe that to win more customers in the market, employers must first win their internal customers — their employees. Indeed, research suggests that companies with highly engaged employees outperform their competitors by 147 percent.  The following quote from Sir Richard Branson, entrepreneur and founder of the Virgin Group, reinforces that belief:

“Clients do not come first. Employees come first. If you take care of your employees, they will take care of the clients.”

Thus, the successful companies of tomorrow will be those that prioritize their workforce as a crucial component of growth. Analyst firm Forrester supports this in ‘It’s Time for CMOs to Pay More Attention to Employees’ report, saying:

“Our latest data clearly demonstrates that there is a correlation between EX, CX (customer experience), and business performance: Engaged employees are more likely to become brand ambassadors.”

To this end, talent experience needs to mirror the customer experience — on demand, any time, anywhere. Organizations that invest in EX successfully attract, retain, and empower employees to do their best work, achieving 50 percent higher productivity, and being six times more frequently ranked as an in-demand employer.

A formula for success

On the understanding that EX can negatively influence operational performance and customer experience when employees are not personally invested in their jobs and organization, we’ve given this its own formula: CX = Strategy^EX.

So, how should organizations make the shift to an employee experience strategy, as opposed to more traditional talent management approaches? At Capgemini Invent, we advocate broadening the responsibility for talent beyond that of HR to embrace the Marketing function in an alliance of the Chief Marketing Officer and Chief People Officer. This strategic and operational alignment will increase the success of both. How? Because EX will accelerate the performance of CX — our CX = Strategy^EX formula.

Forrester too expounds on this in its report, saying:

“EX leaders should leverage the talents of the CMO to amplify their efforts to activate company values and develop employees’ relationship with the brand for which they work.”

We believe that the CMO and CPO can benefit from each other’s skills in this respect. Interestingly, their skills and outcomes are similar. For example, while the CMO is the creator of data-driven insights, the CPO is the planner of a data-driven workforce; the CMO is a brand builder and storyteller, while the CPO shapes culture and connects the workforce. Finally, the CMO is responsible for customer satisfaction and engagement, while the CPO has the same responsibility for employees.

Tying this alignment back to business outcomes, the Forrester report continues:

“EX has become a critical component of business success, so a coordinated effort between marketing and employee functions is necessary to sustain this success long term. Employee engagement is entering a new era, sitting at the crossroads of HR, IT, and Marketing, which means CMOs need to foster these relationships.”

New structures and a new cultural mindset

In some organizations we’re already seeing a merging of EX and CX responsibilities, or of People and Marketing functions coming together under a single business leader. This enables a more strategic focus on employee experience as it aligns with customer experience. Of course, this also suggests a need for some restructuring and, at Capgemini Invent, we help our clients redesign their organizations — see ‘A new employee experience model’, below.

A new cultural mindset is also part of the shift to employee experience. Today’s workforce is looking for a more personalized experience at work. For example, there is an expectation for self-led, continuous, and personalized development. Getting this right has an impact on reducing talent churn. Some 94 percent of employees would stay longer if the company invested in their learning and development (L&D). Managers should be provided with learning that equips them with EX behaviors and practices so that they can better understand their teams and tailor L&D around individual needs.

The role of leaders in shaping employee experience is also implied in our report ‘The Future of Work’ assessing new hybrid working models enabled by digital and data. It asserts that in defining ‘authentic leadership’, businesses should:

“Encourage autonomy, empathy, and transparency. Redefine the role of leaders to empower employees to make data-driven decisions, use data to manage the remote workforce, and enhance remote leadership skills, such as empathy, active listening, and adaptability, etc.”

At Capgemini Invent, we put this thinking into practice for German railway company Deutsche Bahn when we helped to reshape the job profiles of its leaders. Managers had been getting lost in administrative tasks, leaving little time for good leadership. We worked with the company’s leadership team to prototype future leadership roles, enabling managers to reduce administrative and technical activities and invest up to 14 hours per week in focused management tasks.

 A new employee experience model

We have identified the following components of the new employee experience model and work with our clients to bring them to life:

• Organizational Design: modifying governance and process to support EX initiatives and routinely measure EX throughout the employee lifecycle.
• Workspace: transforming the workspace environment to empower employees, drive innovation, and optimize employee experience.
• Culture & Purpose: adapting to changing workplace expectations and embedding EX as a core value in the organization.
• Leadership: establishing an EX-driven leadership mindset that creates and maintains a strong employee-first approach promoting employee well-being.
• Technology & Tools: providing innovative, intuitive and fit-for-purpose digital tools that empower employees to do their best work within a ‘frictionless enterprise’.
• Career & Growth: establishing mechanisms for professional growth that ensure employee satisfaction, motivation, and retention.

Several of the above components came together in a project that we delivered at Siemens. Its Supply Chain Management organization recognized that it needed to look closely at how digital transformation was changing its leadership. We helped to develop a Learning Journey for Digital Leaders, and a #Digital Leaders training product is now being implemented throughout the Siemens Group.

When enterprise computing company Cisco sought to shake up internal silos and systems in order to better foster a design-led thinking mindset, it turned to our creative agency Idean. Together, Cisco and Idean developed and launched the Cisco Design Thinking program giving employees, partners, and clients a new set of tools and methods to work better together. Design thinking has since become a practice shared by thousands of Cisco employees across the organization, including product, sales, and services teams, with both team performance and deal size increasing as a result.

Creating competitive advantage

Of course, we know that adopting an employee experience model isn’t going to happen overnight. Nonetheless, it is a necessary transformation. To quote author and futurist Jacob Morgan:

“In a world where money is no longer the primary motivating factor for employees, focusing on the employee experience is the most promising competitive advantage that organizations can create.”

 So, while it is tempting to focus on financial metrics to help meet ambitious goals, you first need employees who are excited and care about their work. Improving your team’s performance (and its emotional well-being) begins with ensuring what you say, how you say it, and your metrics communicate one simple message: Your work matters.

I recommend every leader shifting the communication focus from internal metrics to customer-outcomes. The result? A next level of customer empathy and value, yielding higher employee satisfaction and performance.