Connecting Talent with Opportunity in the Digital Age in Asia
Technology will continue to have a great impact on the job market. Michael Gryseels, director in McKinsey & Company and leader of the McKinsey Digital Campus, and Susan Lund, partner at the McKinsey Global Institute, summarise new findings from McKinsey Global Institute on how the digital space is impacting the job sphere and how companies can capitalise.
The digital revolution has transformed the way job seekers connect with the world of work over the past decade. Online talent platforms have amassed hundreds of millions of users — and are poised to create economic impact on a global scale.
Rewiring the Job Market
Digital platforms have already had a powerful impact on specific sectors — most notably in e-commerce, where they have altered the entire retail landscape. When they reach critical mass, digital platforms can transform the way markets work, making them more efficient and transparent. Talent platforms are quickly reaching that kind of tipping point; they have become the primary job-search tool in Singapore, and are gaining traction in other Southeast Asian nations. Some, like job platforms LinkedIn and JobStreet. com, bring together candidates and employers to fill traditional jobs. Others, such as freelance marketplace Upwork or ride-sharing service Uber, create online marketplaces for freelance work. Other digital platforms include tools that use big data and analytics to transform the way companies hire and manage talent.
A 2015 report by McKinsey Global Institute examined what impact these platforms might have on the economy over the next decade. By creating better, faster matches between workers and available jobs, they can cut unemployment. By creating flexible part-time opportunities, they can draw more of the inactive population into the labour force. And by putting the right person into the right role, they can boost productivity. All told, online talent platforms could increase global GDP by US$2.7 trillion annually by 2025.
This technological revolution is arriving at just the right moment for Southeast Asia’s labour market, where many companies struggle to find candidates with highly specialised skills or management experience. One of the most important goals of the ASEAN Economic Community (AEC) is addressing this talent gap by allowing the freer movement of skilled labour across borders. But filling these gaps has to begin with creating better and more publicly transparent information about the opportunities that exist and the skills that are in demand. As the job search goes digital, individual users are gaining a wider array of work options, more mobility and a better sense of the wages they can command on the open market. So far, the clear winners have been educated and skilled professionals.In fact, the most sought-after talent may not need to apply for jobs at all. Increasingly, companies will recruit passive candidates, rather than placing an ad and waiting to see who responds.
The War for Talent
For employers, though, the news is mixed. The clearest value of digital talent platforms to date has been in harnessing the power of search technology for hiring, whether through traditional job sites, passive recruiting or social referrals. Speeding this process is critical, since unfilled positions reduce output and interviewing eats into staff time. Companies can engage with candidates on job boards and social networks, and deploy big data-driven platforms internally for everything from screening and assessment to training, team formation and employee engagement.
Now that individuals have publicly visible profiles, the war for talent is heating up. Greater job mobility is a plus for workers and the broader economy, but businesses may face higher turnover costs as competitors can lure away valued employees and even entire teams. It is important to treat employees well and create the kind of workplace where people will want to stay for the long term. Companies must maintain their reputations as employers as carefully as they maintain their consumer brands. Beyond investing in new technology tools, companies will also have to develop the analytical capabilities to use them — and to begin integrating data about people and talent development into the heart of their business strategies. In an increasingly knowledge-based economy, having the most skilled and creative talent can make or break corporate performance.
McKinsey Global Institute’s research found that digital talent platforms could impact the bottom line for companies, especially for firms in knowledge-intensive industries. Early adopters will be best positioned to land the most skilled and productive talent and gain the benefit of their contributions over the long term. At a broader societal level, there is also an enormous opportunity to design a better overall system for developing skills and guiding people through educational and career pathways. The enormous volume of data being gathered by these platforms can offer real-time insight into the demand for specific skills and occupations, as well as career outcomes associated with particular educational institutions and programmes. More accurate and predictive modelling could help individuals make more informed decisions about education and training, while giving policy makers and education providers more accurate signals about how to target their funding and shape their programmes.
Online talent platforms will not cure all of the problems associated with job creation and skills shortages. But they can make the labour market more fluid and responsive. Their continued growth could help Southeast Asia tackle its persistent skills gaps and create a more seamless regional market.
This article first appeared in HQ Asia (Issue 9) 2015.