There is a growing consensus that 2024 will see the start of some fundamental changes in Talent Acquisition. The adoption of Skills-based hiring and the rapid development of AI are the catalysts here, but to truly understand what is happening, we must take a step back and understand the forces driving this potential revolution.
Work is changing fast, skills have an ever-shortening shelf life, and talent is still in short supply in many markets. Companies need to think differently about talent to grow and deliver value, and this is the driving force that will use skills-based thinking and AI to re-engineer the corporate talent function.
So what are the practicalities around this, and what kind of mindset does TA need to adopt to help drive rather than resist the change?
My guest this week is Jason Cerrato, VP of Market Strategy at Eightfold. In addition to working in an AI-driven HR Technology business, Jason has been a Director of Talent Acquisition and industry analyst. In our conversation, he draws on all of this experience to explain why talent-centered design is a critical foundation of the future of talent acquisition.
In the interview, we discuss:
• The main talent challenges in 2024
• What is talent-centred design?
• Building around talent rather than around jobs
• The accelerating shelf life of skills
• Real-time data and intelligence
• The role of technology
• Prioritising skills over job titles and previous experience
• Redefining talent management
• The future role of recruiters
• How much change will happen in 2024?
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Transcript:
Matt: Support for this podcast comes from Eightfold AI. Eightfold AI’s market leading talent intelligence platform, helps organizations retain top performers, upskill and reskill their workforce, recruit talent efficiently and reach diversity goals. Eightfold is patented deep learning artificial intelligence platform is available in more than 155 countries and 24 languages enabling cutting edge enterprises to transform their talent into a competitive advantage. For more information, visit eightfold.ai.
[Recruiting Future theme]
Matt: Hi there. This is Matt Alder. Welcome to Episode 584 of the Recruiting Future Podcast.
There is a growing consensus that 2024 will see the start of some fundamental changes in Talent Acquisition. The adoption of skills-based hiring and the rapid development of AI are the catalysts here, but to truly understand what is happening, we must take a step back and understand the forces driving this potential revolution.
Work is changing fast, skills have an ever-shortening shelf life, and talent is still in short supply in many markets. Companies need to think differently about talent to grow and deliver value, and this is the driving force that will use skills-based thinking and AI to re-engineer the corporate talent function.
So what are the practicalities around this, and what kind of mindset does TA need to adopt to help drive rather than resist the change?
My guest this week is Jason Cerrato, VP of Market Strategy at Eightfold. In addition to working in an AI-driven HR Technology business, Jason has been a Director of Talent Acquisition and an industry analyst. In our conversation, he draws on all of this experience to explain why talent-centered design is a critical foundation of the future of talent acquisition.
Hi, Jason, and welcome back to the podcast.
Jason: Hey Matt. It’s great to be here. Happy to talk to you again. Looking forward to the discussion.
Matt: Great stuff. Please could you introduce yourself and tell everyone what you do?
Jason: My name is Jason Cerrato. I’m the Vice President of Market Strategy here at Eightfold. I’ve been with Eightfold for about two and a half years. It’s been almost two years since the last time we chatted. Very excited to talk about what we’re doing here at Eightfold, specifically around the topic of talent intelligence, and happy to talk about what’s happening in the HR function and talent acquisition and talent management. In a former life, I was ahead of talent acquisition and have also been an industry analyst. So this is something I’m very passionate about and looking forward to chatting with you today.
Matt: Fantastic. And obviously, a lot has changed in the last two years. There’s lots of things to talk about. But let’s start with that bit first. So obviously, you’re hugely experienced in the market, and also the role that you have now gives you unique insights into what’s going on. What do you see as the main challenges for organizations when it comes to talent at the moment?
Jason: The pace of change and the continuous nature of change. I think we’re coming from a function that has historically been built around a certain center of gravity focused around jobs and focused around annual calendar and specific talent cycles. The way work is getting done today is vastly different. Jobs are changing at a very rapid rate. Just think of the impact of generative AI and all of these things that are layering on top of hybrid, remote, asynchronous work, all at the same time. But also, we are shifting to a process which is becoming one that is increasingly continuous.
Whereas in the past, we may have had annual cycle, or we may have done a talent review every six months, or we may have picked our head up and looked around to see what we learned every so often. We are now in very rapid, continuous cycles of learning, which is changing the way organizations are building strategies and looking at their talent.
Matt: One of the things that you talk about a lot is this idea of talent centered design. Tell us what that is and why it’s important.
Jason: Sure. So if you think about it, organizations have been leading talent with a process that was very inside out. You start with the job or the need or the requisition, and then once that’s identified, you gather the data and you learn about where does this job reside, and in which department and in which cost center and who’s the hiring manager and what’s the job description, and then you start to carry out your HR activities from there. As a result of that, there’s very specific inputs that drive very specific outcomes. And a lot of that is done in service of the organization and built around the job.
I think today, our job descriptions are getting less and less reliable. They’ve always been a lagging measure of how the work was done. And the changing nature of skills and the availability of talent is putting more pressure on this. So if you think about it, it’s balancing the conversation from a process that’s historically been built around the organization and built around jobs to increasingly looking over the fence at what’s happening outside of your organization and what’s happening in real time with your talent. And if you start to take that type of a view, it gives you a deeper lens of all the things that are happening in your organization, in your industry with talent in the market and you can get a deeper perspective through the lens of talent acquisition, talent management, DE&I employee experience.
So it’s shifting the center of gravity to one that is at the very least more balanced, but also built around talent and work and information that’s coming in real time to read and react to the environment dynamically.
Matt: I want to ask you about the real time information bit in a second. But before we do though, I suppose to give this a bit more context. When it comes to skills, just how quickly are things moving in terms of the shelf life of existing skills, the requirement for new skills, what is the sort of pace of change out there?
Jason: So we’ve been looking at this for quite some time. And going back to my days as a researcher and analyst, the shelf life of skills was getting cut in half. Even the validity of a degree of a recent grad, their recently earned education and credentials coming out of school were having less and less of a shelf life, even when they were spending all of their time getting educated on the latest and greatest capability. So the world is changing much faster. How you’re doing your job is getting impacted significantly, but then also factor in AI and automation.
There are certain things that are happening where a lot of administrative tasks, a lot of transactional tasks are coming off the plate of a lot of roles, or a lot of automation and AI are acting as virtual assistants and concierges for a lot of different functions and a lot of decision making. So the way in which jobs are getting done and work is being conducted is changing rapidly. And just the nature of skills, the makeup of skills, the prioritization of skills is in a very dynamic place.
Think about how we’ve done this before. You would go to the manager and you would ask the manager to help with the job description or to understand what the job is. Well, the way that manager got the job done when they were in that role is very different from how that work is being done today. I was just telling a story around. I’ve been in recruiting or in the recruiting space for quite some time, but I remember when I was recruiting, racing people to the fax machine. [Matt laughs] The way recruiting is done today is significantly different. And you don’t even have to look that far back between how recruiting is done now and maybe how it was done even as recently as two or three years ago.
Matt: Yeah, I think that’s really interesting. And also, it’s a great reflection on how things do change, because I think sometimes there’s a temptation to say that, “Well, recruiting is the same as it’s ever been,” but it’s blatantly not because of the way technology has moved things forward. Focusing on this idea of organizing around talent rather than organizing around jobs, you mentioned real time data inputs and things like that. How does technology facilitate this process, and what kind of data and intelligence needs to go into it to really make that work?
Jason: Well, if you think about what we do here at Eightfold in this category of a talent intelligence platform, not only are you learning from market insights and an AI understanding of skills, you’re learning from the users using the platform and you’re learning from the organization that’s deploying the tool and integrating the tool with their other sources of data. So you have this three-legged stool of market insights, organizational information and user activity where it continues to feed and learn and absorb information in real time to help talent leaders, help employees, help applicants have additional context for a variety of decision points.
So if you’re searching for a job and applying for a role, give some skills intelligence to help match to jobs but also explain why you’re being seen as a match or not being seen as a match. If you’re an employee, it’s helping build career planning capabilities for where can I take my skills in this organization? And it’s not entirely based on a static job hierarchy or a career ladder. It’s based on a real time understanding of skills using skills mapping that’s potentially presenting a variety of paths, some traditional, maybe some adjacent, some nontraditional, but all using skills intelligence to do that. And then as a leader, it’s giving you more information around what’s happening in your industry, what’s happening in your talent network, what’s happening in your employee base and what is the pull through of how skills are interacting with those audiences to potentially plan for a future that is fast approaching.
So if you think of a lot of the apps we use in our everyday life, they’re gathering data from other users and learning in real time to make recommendations on people similar to you or what they’ve learned from other users that may be ahead of you on a specific path or on a specific course. This is a very similar capability where in real time, it’s reading and reacting to what’s happening in the environment and taking what it knows about you and what it knows about people like you and what it knows about your organization and what it knows about similar organizations in your industry, and pulling all that data together to inform all the participants in the process.
Matt: Just to dig a little bit deeper, I mean give us an example of maybe particular talent challenges or types of challenges that this approach can solve.
Jason: So for example, if you think about a very org centered or job centered approach, when you’re looking at talent, you’re always looking at them through the framework of who can fill this job. As a result of that, it creates just some inefficiencies by design. You’re carrying out this mass messaging effort to generate this very broad audience to try to fill this opportunity. And let’s say, you’re very successful at that. So you gain 100 applicants, you’re only hiring one person. In HR for the last decade, we’ve been trying to figure out, “Well, how do we make best use of those other 99.”
If you shift that and you start from a process that’s really more built around talent, the inputs aren’t necessarily the job or the department or the manager. It’s the skills, the capability, the work, the persona, the motivation. And this allows you a completely different approach. You move from trying to attract the largest audience for this one opening to trying to understand an audience of talent for a variety of potential opportunities, and you shift from this feeling of being an order taker trying to fill a requisition to truly being a talent advisor, trying to nurture and guide talent.
You can also provide more personalized information, because now you’re reacting to the person and the talent rather than this one job. But also, if you’re very successful in generating that audience and identifying that talent, the conversation that results is very different. So no longer are you having a conversation through the lens of the job? Who did this job before? how does this job compare to the job the person did at their last organization? Is this the right title? Is this the right level?
You shift to a conversation around talent. This individual or this audience of people definitely has skills we can use in this organization, where are all the people in our organization that need to meet with them, where are all the places they could potentially go. You start to have decisions based on the talent rather than the job, and you focus on what’s the work that we need to get done, what are the tasks that are involved, what are the skills we’re looking for. So, it opens up opportunity.
I was in charge of doing pipeline development for specific critical skill roles and specific diversity initiatives. When we used to do that, we would often bring hiring managers to go to these events or to review talent with a specific requisition in mind. And when we shifted that mindset to say, let’s not come to this event with a specific requisition, but let’s come with an eye for talent. And once we identify talent, then let’s try to figure out all the places that they can go in our organization and figure out who needs to meet with them. When we have that more of an open portfolio strategy versus a pipeline strategy, our results tripled. With AI and with skills mapping, you’re able to do some of this at scale very quickly.
Matt: I suppose extending that internally within the organization into talent management, how does that redefine things like people with high potential and the whole way that organizations map talent currently?
Jason: I used to be in charge of leadership development programs and leadership development rotational programs. You’re trying to identify people with high potential and you’re trying to create some mobility, rotating them around the organization, and it is trying to open up a variety of potential paths for them in their career. But a lot of that was very manual and very targeted and very limited in size, and scale, scope. If you start to deploy this capability to do this in real time very quickly with AI and talent intelligence, you can shift this approach and shift this mindset and scale it for the organization.
I was recently at an event, and I was talking with a talent management leader, and I wish I knew her name to give her credit. But she said something that almost stopped me in my tracks and really resonated with me. She said she’s trying to shift the culture of her organization to do just this. They’re trying to move beyond identifying a few groups of select high potentials or hypos to trying to put together strategies that can help everyone at scale throughout the organization to make them high grow. And if you can shift that mindset from a few high pose to making everyone high grow, not only are you making the most out of the workforce you already have, you’re potentially finding untapped talent that’s right in front of you because you’re looking at them in a new way.
Matt: You mentioned already the way that this elevates the role of the recruiter. There’s been a huge discussion this year about the future role of recruiters, particularly in the context of generative AI and other advances in technology. What do you think the future looks like for that role? Will we still have recruiters in three years’ time? And if so what is it that they’re going to be focusing on?
Jason: I think we’ll still have recruiters. I think their focus is going to be very different. For the last decade or more, they’ve been working behind very transactional administrative systems. If you work for an agency, you’re already doing a lot of this talent centered approach, maximizing the exposure of the talent you have to as many possible sources as possible, because there’s a supply demand, there’s a monetary value, there’s a lot of motivation, but you’re also not as tied to the job.
I think if we bring this inhouse to more internal recruiters, what this does is this shifts them from this strong linkage to the job and a very administrative staffing type of role to one that goes back to true recruiting where you’re interacting with people, you’re building relationships, you’re understanding motivations, you’re acting as a talent advisor. And part of this is because a lot of that administration and that transactions comes off your plate with AI and automation, but it’s also because that really is what recruiting means. You’re trying to influence, you’re trying to motivate, you’re trying to identify, you’re trying to make someone aware of something they may not have been aware of themselves, and that’s the definition of recruiting.
So I think the role of the recruiter is almost like, I don’t want to say this, but it’s almost like back to basics. But it’s because a lot of the learning curve of learning, the applicant tracking system and the administration, and the transaction, and the compliance is being done in a very different way, that now it’s back to relating to individuals and sharing and exchanging information, and understanding a variety of potential paths, but advising to ones that meet that talent need the most. So I do think we are in a very changing time for recruiters and there’s probably some recruiting teams that are going to be restructured or reduced. But for the people that are in this field, what they’re doing and the work they’ll be doing will be very different.
And if you think about the decision that people are making when they’re getting a new job or changing careers, you do want to talk to someone and talk to a person and get a feel for the company and the culture. We have a mutual friend in the industry, Tim Sackett. He put out his predictions for next year and he was talking about, “When you actually get to talk to a recruiter or interact with a person, it almost becomes a luxury experience.” That was the way he phrased it. But I think it’s removing a lot of the transaction administration actually emphasizes the role of the person in the interaction.
Matt: So moving towards a talent centered, skill centered way of thinking is quite a shift for a lot of organizations. Now you’re working with some very progressive organizations who are already making or have made that shift. What have you learned? What have you seen? What advice can you give to companies who want to make this transition in terms of the mindset that they have?
Jason: Some of the immediate learnings that come out of organizations that have gone down this road is some of the traditional constructs they’ve used, competency models, resumes, specific profiles. When you open your eyes and your aperture to exploring new ways of doing this and allowing some of the talent intelligence and the AI to surface things like talent adjacencies and learnability, in many cases, it’ll not, only open the audience for consideration, but it may surface audiences or raise profiles that you weren’t considering otherwise.
So a lot of feedback we get is that when they looked at how they traditionally approached this, and the results that came from it, and they looked at what skill mapping and expanding the data set and using some of this talent intelligence surfaced, it completely expanded and shifted what they had to work with and the audience they had to choose from. So it does provide the insight and the context that this brings to balance out or provide both sides of the mirror, as I like to say.
The other thing is, it gives you a deeper lens at the work that needs to be done and the results that come from it. So for example, from a talent acquisition perspective, there’s been a continuous discussion around job descriptions, and are our job descriptions accurate and how do we keep them up to date. So there’s been a lot of organizations that have been shifting to more emphasis on the work, and the tasks and listing more and more skills in their job description. But part of that is, if you understand what skills are involved, you can also look at things like adjacencies and capability and learnability.
And what that does is it helps expand the audience for consideration. It helps explain to people why they may be able to do this. It gives people confidence to apply. We see a higher rate in conversion of people looking at a job and actually applying for it. We also see significant increases in women and people of color applying for roles with transparent AI that’s explaining how their skills match, especially as people tend to underreport their skills or feel they have to be a perfect match before they apply. We also see impact around employee experience.
So again, you’re creating better transparency and visibility and democratizing some opportunity, but you’re also allowing people to have more control and awareness over their career. So you’re shifting from simply looking at someone’s experience at work through an employee engagement survey or their experience with work through giving them better digital tools to what is their experience from work. Are they able to develop skills they’re interested in developing? Do they understand how they apply to this organization? Do they feel valued because of their ability to contribute? Are they able to develop skills to maybe do a career change or a career pivot? Does the organization know that they’re trying to do that? So this gives a deeper level of awareness and understanding of your talent that creates some of this agility. And it has a variety of benefits.
I’ll also just say it shifts the equation around supply and demand, because you’re able to handle things with greater speed and agility and understanding. You’re not looking at a supply and demand equation of one person to one job. You’re looking at a supply and demand equation of skills to work, and you can solve that conversation in a variety of different ways. So people may be able to develop their skills outside of their immediate role or you may be able to tackle challenges for today that may be short lived, but need to get done. So it creates this multitude of adventures in a very much like a choose your adventure experience.
Matt: Final question for you. It’s very obvious. It’s been obvious for most of this year that we’re at the start of a period of immense change in HR, in talent acquisition, particularly. As an industry, change isn’t something that happens very quickly, traditionally. How quickly are things going to change? I mean, what shifts are we going to see in the next 12 months? What are things likely to look like in two- or three-years’ time?
Jason: It’s a great question. I think we just came out of the pandemic and COVID. That was a forcing function that required things to change immediately. And a lot of organizations didn’t have any say in whether they were going to do it or not. They had to do it for survival or to sustain their ability to deliver to customers. I think what’s happened is, as we’ve come out of it, we’re celebrating that we don’t have to deal with that anymore and that we’re on the other side of it, hopefully. But we tend to get back to our old ways. And then now we’re introduced with things like generative AI, and we’re introduced to organizations and industries pivoting into new areas, and we’re introduced to this return to the office or stay remote battle.
So I think now the world of work is changing. There may not be that pandemic forcing function, thank God. But we still have to deal with the way we’re going to work going forward. And a lot of this is really challenging the way we do this. And a lot of people, again, as we started talking today, have been looking at things like change in the frame of change management. How do I manage that change for what comes next, and how do I create tips and tricks and a playbook for what comes next? I think we’re moving into a world of work where it’s just going to be constant change. So it’s not one of change management and tips and tricks. It’s a culture of this dynamic processes and dynamic strategies and a variety of scenarios. Because things are changing fast. We are not able to predict the future as well as we could because the future is changing very fast and it’s getting closer and closer.
So it’s this ability to read and react to the environment in real time that gives you that agility to be able to live in this type of a world. Agility is more than just speed. It’s the ability to turn quickly left or right by having a lot of organization, process and systems built around jobs for how you operate today, very important. But by giving the other side of the conversation for what’s really happening with your talent in real time and what’s the work that they’re doing and what’s happening outside of your organization that you may not be seeing gives you that full picture to have some of that agility.
Matt: Jason, thank you very much for talking to me.
Jason: Appreciate it, Matt. It’s a great conversation. We live in very dynamic times. It’s never been more difficult to be in the HR function, but it’s also probably never been more exciting because we really are building the function for the future, and at the center of just about everything organizations are trying to do. So it was wonderful to have a chance to talk with you. I look forward to talking with you again in the future.
Matt: Thank you. My thanks to Jason. You can subscribe to this podcast in Apple Podcasts, on Spotify or via your podcasting app of choice. Please also follow the show on Instagram. You can find us by searching for @recruitingfuture. You can search all the past episodes at recruitingfuture.com. On that site, you can also subscribe to our monthly newsletter, Recruiting Future Feast, and get the inside track about everything that’s coming up on the show. Thanks very much for listening. I’ll be back next time and I hope you’ll join me.
