The rapid pace and development of Artificial Intelligence (AI) and digital trends in recent years have caught business leaders off guard. According to a recent global CEO survey by PWC, 70% of CEOs anticipate disruption to their business models in the next decade. With business models rapidly evolving in unprecedented ways, it is imperative for CEOs and business leaders to reconsider their talent strategy to ensure that their employees can navigate the complex landscape of skills transformation.

In contrast to the past, where technical skills had a lifespan of at least a decade, in today's era of AI, technical skills can become obsolete in a matter of months and years. A highly-skilled professional could swiftly become redundant. Addressing this issue by repeatedly hiring new talent with updated skills leads to productivity challenges, decreased engagement, cultural misalignment, risks, and a discernible impact on the bottom line.

Boards, CEOs, HR, and business leadership must now approach talent strategy as a critical business issue rather than viewing it solely as a support function issue. Failing to do so may result in a demotivated, highly anxious, and unproductive workforce sooner than anticipated. A forward-looking talent strategy centered on reskilling and cross-skilling is the solution to this dilemma.

Reskilling involves transitioning employees to different roles, while cross-skilling entails adding complementary functional skill sets to employees in new areas relevant to the organization. Many business leaders hesitate to invest significantly in reskilling projects as they perceive it as an additional cost without recognizing the business case. While acknowledging the skills challenge, some believe it is more feasible to release redundant talent and recruit new talent with updated skills. However, this is not a sustainable business strategy, as the newly hired employees may also encounter skills issues in a short time, trapping the organization in a cycle of hiring and firing and resulting in diminished productivity and bottom-line consequences.

A study by the UK Financial Services Sector Commission (FSSC) reveals potential savings of around GBP50,000 per person through reskilling compared to the costs and impact of letting employees go and hiring new talent. Exit packages, recruitment costs, onboarding, temporary productivity loss, and organizational culture alignment contribute to far more significant financial and organizational challenges. A well-designed reskilling strategy can be a revenue-generating proposition rather than a training cost, enhancing employee engagement, service standards, and customer experience.

However, reskilling is a complex endeavor that necessitates a talent strategy roadmap, including detailed skills gap analysis, the creation of reskilling and career paths, establishment of a talent marketplace, and ensuring employee engagement and commitment to the initiative. Reports from the World Economic Forum indicate that 43% of current operational tasks could be automated by 2027, underscoring the urgent need to reskill the workforce in more productive and business-enabling areas.

Cross-skilling is another proposed talent strategy to enhance productivity, reduce costs, and drive revenue. An exemplary case is the recent announcement by Etihad Airways that their pilots are now trained to operate A350 and A380 aircraft interchangeably, significantly boosting employee productivity and financial savings for the airline, which otherwise would require dedicated teams for each aircraft.

One promising application for cross-skilling is on the ESG (Environmental, Social, and Governance) agenda, which is a critical imperative for all organizational functions. Instead of incurring substantial costs by creating new functions and layers for ESG aside from control and risk areas, an initiative to skill employees in business functions on relevant ESG aspects can enhance productivity, expedite results, and generate significant cost savings.

Embracing change is the only way to survive and thrive in this era. A futuristic and comprehensive new talent strategy can serve as the panacea for the current and future challenges facing organizations. It is high time for senior leaders to prioritize talent strategy as one of their foremost concerns.