We’re continuing our foray into the top barriers to success that we outlined in our top barriers post that chronicles the barriers that keep coming up over and over again in every Procurement survey in our effort to ensure that you don’t have to read another state of procurement study for the next 5 years. Today’s topic: the talent gap!
A Brief History …
As we have previously noted in our discussion of category and market complexity, with each successive innovation, business, and process improvement, processes and tasks became more complex and required more education and experience to perform. As a result, with each successive innovation, the available talent pool shrinks. When you consider that traditional post-secondary programs haven’t kept up with the pace of innovation in business in decades, there’s a lack of formal training programs, mentorship programs disappeared decades ago (and every time there’s a workforce reduction, the older generation is the first to be let go or be bought out), and most businesses haven’t invested properly in training in decades, you can see that, for many traditional complex tasks, the talent pool is shrinking quickly.
But the lack of talent in traditional areas is just one side of the coin. The other side is that technology is progressing faster than even technology professionals can keep up. Combine this with the recent SaaS explosion in most corporations, with some large corporations using over 1,000 different SaaS applications, and the increasing complexity of “AI”-X applications, and the talent gap is expanding in tech as well.
The Problem
The problem here, as we expounded upon in our brief history, is multi-fold. There’s not enough talent in many domains, and in domains where there is talent, the rapid pace of development and innovation is still leaving top talent behind.
The Necessary Realization
In theory, the multi-fold solution is easy, but in practice, it will take a lot of human effort to realize, just like execution support can’t be solved overnight.
1) Bring Back Training
Stop trying to hire someone with all the skills and knowledge they need to do the job that is at least somewhat customized to your operation and start training again. Formal programs. Ensure all the materials are accessible online all the time so the parts your employees tend to forget (because they don’t perform the tasks regularly) are quickly and easily accessible.
2) Mentorship and Shadowing
Don’t wait until someone leaves to start looking for a replacement. Start training a replacement for a key position within three months of someone new taking the role via shadowing and mentorship. Make sure there is no task that relies on one person (even if always done by one person as it’s not demanding enough to require more than one employee) and that there is always a backup person. Stop trying to replace teams with agentic software and start trying to empower small teams with augmented intelligence so they can do the work of teams three, five, and ten times their size but still ensure the knowledge remains in the organization.
3) KMS: Knowledge Management System
Despite being introduced in the late 2000s, these never caught on and this is, honestly, one of the biggest reasons we have a talent gap today. Not only do most organizations not do enough planning around succession for those that perform key functions (it’s not just the C-Suite you need a plan for), but they don’t capture the key knowledge built up by long time employees who know how to run certain functions efficiently and effectively. That’s why performance degrades over time as people leave and new people are hired because the days when you’d join a company and stay for five, ten, twenty years or life disappeared with the last millennium. When organizations failed to properly capture this knowledge when the first round of massive layoffs hit in the dot com crash of 2000, and then never learned from it (and we saw the same mass exodus of senior, knowledgeable, people in the financial crisis of ’08), we ended up with massive increases in the “talent gap” as the knowledge required to forge talent suitable for your organization was lost. (On top of the fact that knowledge was increasingly leaking to China with the global outsourcing system.)
The reality is that unless the knowledge needed to run your business is captured, you’ll never have the talent you need, real or virtual (as these new-age AI-based agentic systems that will, according to the marketing, solve all your problems won’t work at all unless properly trained, and they can’t be properly trained unless the right data, processes, and organizational knowledge are appropriately captured — that’s a big reason these efforts continually fail and will continue to fail).
4) Augmented Intelligence Systems
For well-defined tasks for which mature (pre Gen-AI) agentic workflows exist that can be appropriately defined, controlled, and tailored, implement such systems to ease the burden on new employees as they attempt to learn the role and be productive and strategic.
The Technological Requirements
The technological requirements, especially for the KMS and the Augmented Intelligence Systems, are considerable and require supply chain aware sourcing and sourcing aware supply chain and expertise from source to sink and back again on both sides.
A continuing reminder that if you want guidance in the short term, hope that your favourite provider reaches out to Bob Ferrari of Supply Chain Matters or the doctor and enables us to focus on writing the series (or in-depth e-book) explaining what modern Procurement and Supply Chain Tech needs to look like (and how it needs to be implemented) to address the challenges, reduce the risks, and address the priorities versus just dripping out tidbits as free time permits.