Talent Acquisition at a crossroads between true strategic advisory and transactional role, finds new report by AMS and The Josh Bersin Company

• Despite the clear need to move to skills-based work redesign, TA (Talent Acquisition) still not seen as strategic
• TA teams being asked to concentrate on saving costs in a transactional relationship—not join in the wider transformation conversation
• Unexpected on-going importance of DEI to both organizations and TA leaders
• Professional Services emerging as first locus for major hiring impact of AI

April 24, 2024, Cleveland, OH — The Josh Bersin Company, the world’s most trusted human capital advisory firm, and global talent solutions business AMS, today cautioned that despite the proven benefits of strategic workforce planning, organizations are failing to fully capitalize on the transformative potential it offers.

Surprisingly, defying prevailing reports portraying Diversity, Equity and Inclusion (DEI) initiatives as toxic and being de-prioritized by major U.S. corporations, the evidence indicates that such programs maintain robust investment and emphasis, at least for now.

The results emerge from a research project, the latest in the ongoing global Talent Climate research initiative, which has drawn on half a million hire-related data points of global HR and recruitment records and a global survey of executives.

The main findings of the report, Talent Acquisition at a Crossroads, include that while skills shortage remains the top issue for TA leaders (60%), they are also under tremendous pressure to improve the efficiency of their recruiting processes (58%).

While 44% of respondents cited a need for more training, this alone may prove inadequate to address the problem, as TA practitioners feel they are perceived as “order-takers” and their contribution is insufficiently recognized. Despite 55% of companies viewing TA specialists as an integral part of the business, only 32% of TA leader respondents feel they serve as a truly strategic partner to their organization.

Notably, when asked how to enhance their value, 40% responded: "The business is not ready to take a strategic approach to talent acquisition.” An even higher proportion, 45%, were told to prioritize cost reduction over strategic talent advisory.

42% also disclosed that their company does not have a workforce plan. When asked “Will DEI continue to be an important focus for you in the next 12 months?” despite the headlines questioning DEI's corporate emphasis this was agreed as a high priority—ranking it above “Skills-based hiring is too difficult for us to implement right now” (3.7 versus 2.8).

Another concern: despite the well-documented positive impact of AI (Artificial Intelligence) on the delivery of world-class TA programs through enhanced efficiency and agility, respondents ranked AI as less of a priority than increasing the efficiency of the TA team and reducing costs.

Interestingly, while overall cost reduction and efficiency remain major concerns, the metric of "reducing cost per hire," once a classic top priority for TA, is now ranked much lower on the list of KPIs, at least for the next 12 months.

Sector dynamics appear to influence these trends. Pharma stands out with 67% citing skills shortages as a top concern, which may reflect the specialized nature of roles in this sector and the critical need for specific expertise. Comparatively lower percentages in Digital & Tech (44%) and Defense & Engineering (45%) indicate that while skills scarcity is significant, it is less acute in these industries.

Overall, respondents indicate a range of organizational and operational challenges in transitioning to a more strategic position. The most prominent barrier may be the dynamic nature of business priorities, which complicates strategic TA planning.

Finally, the Professional Services sector (38%) ranked the impact of AI and automation among its top three disruptive forces. This industry is at a critical point of technological integration that will profoundly transform service delivery models and talent utilization strategies.

Commenting on the latest Talent Climate round-up, Terry VanQuickenborne, VP Research, The Josh Bersin Company, said: “With 40% of TA leaders highlighting readiness gaps, there's a clear call for strategic integration of TA into business planning.

“And while skills shortages continue to pose a significant challenge, necessitating innovative approaches to talent sourcing and skills-based hiring, the concern for AI and automation underlines the urgent need for structured technology adoption in modern Talent Acquisition.

“It also seems that DEI remains central in expanding talent pools and combating skills shortages.”

Josh Bersin, global industry analyst and CEO of The Josh Bersin Company, said: “These findings further emphasize the need for closer alignment and integration of TA teams within broader organizational strategy discussions.

“TA’s lack of inclusion in strategic discussion and a seemingly widespread absence of a clear workforce plan are significant obstacles that prevent the TA team from aligning its efforts with long-term business plans.

“Additional internal constraints such as insufficient capacity and capability, along with organizational readiness further complicate the landscape—and the lack of a convincing AI adoption plan does put this vital business function at a ‘crossroads,’ where it is straining to achieve its full potential but hampered by a continuing lack of consistent CEO support.”

Janet Mertens, Managing Director, Data, Insight & Analytics, AMS said: “Talent acquisition teams have a key role to play in enabling the strategy of the businesses they serve.  Their ability to analyse key labour trends, skills requirements and candidate behavior puts them at the forefront of establishing how effectively organizations can build for the future and achieve growth.

The current global workforce climate means organizations cannot afford to simply have a transactional relationship with talent acquisition.  They are the connection between candidates and employer brands and are increasingly sophisticated in their use of data and insights to spot the trends which can help to engage that harder to reach talent.

With time-to-hire rates increasing and an increased focus on the need for technology and AI skills in the workforce, building strategic relationships with the teams at the forefront of understanding the future workforce are critical for success.”

On Methodology

Talent Acquisition at a Crossroads is the latest in The Josh Bersin Company "Talent Climate" series, offering an in-depth exploration into the current talent acquisition landscape. Produced in close collaboration with AMS, the study leverages a robust data set amalgamating over half a million data points from AMS's business intelligence, supplemented by The Josh Bersin Company's extensive database spanning hundreds of HR practices. Together, the data provides a panoramic view of the hiring volumes, internal hiring trends, and time-to-hire statistics in the talent acquisition ecosystem. Data from more than 13 industries in a wide variety of countries around the globe was analyzed.