What Is the Talent Ecosystem?

Business needs change all the time, but talent programs and processes don’t. If you want your organization to keep evolving—and your employees to stay—it’s time to adopt a more robust talent management approach.

By Susanna Mlot and Aaron Sorensen, Ph.D.

By now, we all know the tide has turned in the war for talent—and talent has won. Before the new coronavirus hit our shores, it was a buyer’s market. And hopefully it will be again after the pandemic is behind us.

The result: Skirmishes on the talent battlefield were occurring between line managers and human resource centers of expertise (CoEs) who increasingly find themselves as compliance enforcers and risk mitigators rather than strategic business partners. This reality causes many business leaders to challenge HR and talent leaders to evolve programs and processes to meet their business needs and the expectations of a new generation of talent. 

The organizations that continue to be locked into discrete calendar-driven talent programs, and that have siloed talent functions rather than agile talent management capabilities built around clear business requirements, will continue to be the ones that are most challenged in this new world. 

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Now, a more robust approach to talent management is gaining traction. It borrows from systems theory and design thinking to create a talent ecosystem built around delivering a better employee experience and adapting to business needs. Those who subscribe to a talent ecosystem approach can more readily connect talent tools, processes, and programs with frequently changing business priorities and deliver a more magnetic employee experience.

While the talent ecosystem concept isn’t new, the acceleration of the experience movement—combined with new, experience-centered technologies to nudge key interactions—is forcing many companies to move in this direction and make work easier and better for the people doing it.

So What Is a Talent Ecosystem?

The key characteristics of a talent ecosystem are its cohesive, interrelated, and interdependent parts that enable mass customization of the employee experience around talent segments. Just as systems theory describes, a system can be more than the sum of its parts by taking advantage of the interdependencies within the system. Similarly, a talent ecosystem adapts to business needs (or needs of talent segments) as they evolve, ensuring the other parts of the system reflect those needs as well.

Ecosystems can also adapt to business needs without introducing chaos into the system that often grinds established HR processes to halt. The connective tissues holding the talent ecosystem together are the technologies, agile processes, and systems (or ways of working) that enable greater connectivity among the traditional elements of talent management: acquiring, deploying, developing, and engaging and retaining talent. 

Wasn’t the promise of “integrated talent management” supposed to achieve the same goal, you ask? Yes, in some respects. But what’s different about an ecosystem approach is we’re not talking about event-driven linear processes that are bolted together with an integrated human capital technology.

A talent ecosystem is designed to meet needs—the “jobs to be done” for employees and the business. From a tech standpoint, it functions more like the apps on your phone working on a common operating system, pulling data from your locations and usage patterns, but varying by individual preferences and needs. While this creates interoperability and customization, it also allows for business and employee needs to be met.

There are two main benefits of a talent ecosystem versus traditional approaches to talent programs:

1. The ability to flex around the unique needs of talent segments

The talent ecosystem is agile and flexible to environmental shifts, such as changing industry and labor market dynamics. It also provides distinct strategies for managing different talent segments, essential for competing in the “buyer’s” labor market. 

Organizations that have successfully implemented a talent ecosystem recognize a single talent model for a diverse, multigenerational workforce doesn’t work anymore, with employees expecting a more personalized value proposition and experience that’s tailored around their needs and aligned with business needs.

These same organizations understand what matters most to key talent segments across critical moments of truth throughout the employee experience and create nudges to maximize the impact managers can have in these moments. 

For example, targeted strategies to attract, develop, and engage talent in niche roles that drive a growth strategy can be achieved, while at the same time efficiently hiring and developing talent at scale for functions like customer service. For the same population, companies can then get alerts and suggested alternative tactics when new hires don’t seem to be integrating with their teams based on organizational network analytics on email and calendar metadata. 

2. Tighter connections to the business and capacity to scale

Talent ecosystems are also closely linked to the needs and objectives of the business, and to the capabilities most critical to supporting the business in the future. To stay relevant with customers, businesses must constantly adapt their products and services and how they go to market. 

The fluidity with which businesses change to stay competitive necessitates an ecosystem that’s adaptive to feedback from the business—the roles, skills, and areas of the business that are more and less important to growth, and are often rapidly changing.

For example, consider the impact of artificial intelligence and robotic process automation on insurers and financial services. These are industries that require an ambidextrous workforce—one that can deliver a value proposition to customers who expect a high-touch, human-centered experience, and another that’s working to disrupt this model through tech and a more digital experience. The agility that a talent ecosystem can provide is essential in order to mobilize different roles and skills as they race to create experiences for customers that blend a human and tech touch. 

The ecosystem also helps achieve scale in ways that are challenging under traditional approaches to talent management. Models that seek economies through “one-size-fits-all” programs are static, event-driven, and reactive to business needs, ultimately inhibiting transformation.

Consider, for example, strategic workforce planning in the new ecosystem model. Progressive companies are shifting focus from a static, long-term forecast of workforce needs and anticipated gaps to a more dynamic and adaptive approach that functions more like a talent marketplace to match talent supply with demand through machine learning algorithms. In many respects, the talent marketplace is an ecosystem whereby business needs (such as project staffing needs) and the development and experiential needs of your workforce are being met through algorithms that enable “matchmaking” to happen at scale. 

Talent Ecosystems in Practice 

In one recent example, an ecosystem approach enabled a financial services client to quickly pivot and address a significant skill gap related to digital and tech talent, which was constraining growth.

The Talent Acquisition team sourced candidates based on a set of targeted personas, while Learning & Development initiated an upskilling and reskilling of talent in adjacent roles. At the same time, Total Rewards and Communications launched a tailored employee value proposition and career site. Through a cohesive set of interdependent tactics, a new process and way of working for the HR CoEs emerged by simply pulling together a cross-functional “swarm team,” enrolling them in the business need, and establishing a shared channel on MS Teams to track progress, best practices, and adapt as shifts in the business occurred.

Furthermore, features of this approach wove a “red thread” through each element of the ecosystem to ensure a consistent candidate and employee experience at key moments of truth like onboarding and performance conversations. This “red thread” answered the question, “How do we make this role and our employee experience consistently attractive and magnetic to the talent we need?” 

Another example is that of an insurance organization that identified both Business Intelligence and Claims roles as critical to its growth strategy. In order to compete for talent in these positions, the company first needed to “tear down the walls” that were built over the couple years between the Talent Acquisition, Learning & Development, and Rewards teams and better connect each element of its ecosystem. 

Then it engaged hiring managers and leaders in much more cogent, strategic, and business-oriented discussions about the specific capabilities and skills needed in these roles, and how they could partner to address the talent challenges. Simply having one focused end-to-end conversation with the business about how to attract, mobilize, develop and motivate talent versus many tactical exchanges with HR CoE leaders yielded tremendous benefits across the talent spectrum.

Avoid the Pitfalls of a Tech-First Approach 

The talent management tech industry has created a buzz about what’s possible using new technologies and artificial intelligence to power the employee experience and better meet business needs. While we’re optimistic that experience-centered talent tech can be a game changer, it’s important to avoid an emphasis on technology and tools too quickly when standing up an ecosystem. The right sequence, therefore, is to first establish new ways of working, agile processes and then use technology to accelerate and scale. 

The unsexy and less flashy fundamentals are still important to get right first, including: 

  • Aligning around the capabilities and associated roles that create the right to win.
  • Establishing a talent strategy that outlines important rules for how you invest in talent.
  • Understanding what type of performance culture needs to anchor our competitive position.
  • Determining what employee experience we want and actually can substantiate in the market.
  • Aligning around how much flexibility or customization in the employee experience the organization and culture can and will embrace.
  • Getting answers for questions around how much and how fast do we need to scale talent management capabilities.
  • Building partnerships with HRIS and IT to avoid process impediments down the road. 

There’s significant lift for organizations that are intentional about building strategic HR advantage through a talent ecosystem. By developing a coherent, adaptive approach to talent management that starts with the needs of the business, organizations gain an advantage in creating employee experiences that strengthen their ability to attract and retain talent.

Once the shift to the talent ecosystem has occurred, the battlefields of the talent wars become a win for business leaders, the people they need on board, and HR. And ultimately, this will create momentum toward the business results they’ll achieve. 

Susanna Mlot is a partner at Axiom Consulting Partners. As a 30-year consultant and healthcare executive, Susanna has partnered with clients to enable their achievement of excellence in execution and building capabilities in the critical pathways to profitable growth. Susanna’s expertise includes change management, strategy development and articulation, organization design, and workforce planning and development.

Aaron Sorensen, Ph.D., is a partner at Axiom Consulting Partners. As a psychologist with a background in organization transformation and talent management, he is known for developing innovative, yet pragmatic solutions that blend behavioral science, analytics, and practical business savvy.