The Post-Pandemic Future of Talent Pipelines

Kristie P. Paskvan, CPA, MBA Board Director and Leadership Fellow
Strategies for Today's Corporate Finance Leaders

Talent is a top priority for boards and management teams, and succession isn’t the only focus—companies need a robust and diverse intellectual pipeline in the coming years as demographic and societal trends transform hiring patterns. These trends include changes in the delivery of education, geographic migration, an acceleration of hybrid work environments, and the speed of digital transformation. Succession should be viewed as more than filling a limited number of senior level positions, expanded to include nurturing a vibrant talent pipeline within an organization and ensuring that the next generation of leaders has both an innovation mindset as well as the problem-solving capability needed to take the organization successfully into the future. Here are four major trends that leaders should be aware of as they head into the brave new post-pandemic world.

Changes in Employee Skill Sets

According to the most recent AICPA Trends Report published in 2019, the number of CPA candidates declined by 7 percent in 2018, hitting a 10-year low. This follows an overall decline in both undergraduate and graduate accounting degree program matriculations of 4 and 6 percent respectively since 2016, paired with a decline in U.S. CPA firms hiring new accounting graduates. This change is driven in part by the rapid increase in technological advancement at all firms, necessitating a shift to hiring more non-accounting or combined-degree candidates. As we’ve all seen, the pandemic has accelerated digital transformation as clients and customers now expect seamless digital interactions and instantly available, up-to-the-moment information. In response to the demand for tech-savvy job candidates, many accounting students are acquiring dual degrees, adding data analytics or information systems as a second major. Quoting the AICPA, “We believe that for CPAs to continue to serve the marketplace, they must incorporate new and different skill sets and that it is incumbent upon the profession to take steps to cultivate these rapidly changing skills in accounting graduates and newly licensed CPAs.” I believe this holds true for many professions outside of accounting—I can’t think of an organization that wouldn’t be enhanced by a multidimensional candidate that is capable of changing roles as the business grows.

Transforming Work Environment

During the pandemic, as workers realized they no longer needed to be tied to a geographic location near their office, many migrated not only out of cities but out of state. Some of the fastest-growing states (even before the pandemic) are Arizona, Idaho, Utah, and Nevada. Going forward, many workers expect remote work to become part of the norm, and increasingly want a say in how and where they work. Surveys from the Society of Human Resource Management indicate that most employees (52 percent) are seeking new jobs. This may seem surprising in a time of economic uncertainty, but it shows just how important regular interaction and feedback are for employers trying to keep a pulse on employee satisfaction. “Out of sight, out of mind” works both ways. If you aren’t hearing from your employees, they may be considering other options. One of those growing options has been an increased gig and freelance workforce: According to Forbes and Upwork, the gig economy is expanding three times faster than the U.S. workforce as a whole. Going forward, managers and coaches will no longer be focused on individual workers but rather emphasize the importance of diverse teams and networks as the definition of “workforce” expands.

Declining Birth Rate

Boards and senior management should also note that the future talent pipeline across all disciplines will be affected by the decline in birth rates, which was significant during the last economic recession starting in 2008 and is worse now. According to data from the Center for Disease Control, the birth rate in 2020 fell to a 36-year low, indicating organizations could face a lasting future talent shortage. Additionally, children born during the previous recession show skepticism about attending college—at the same time that companies have a growing need for technologically skilled employees that can work in an automated environment next to machines that have fully developed AI capabilities.

Shifts in Education

How can educational institutions and employers work together in the future? How can organizations adjust their hiring and talent development processes to ensure they can hire who they need now, while developing the necessary capabilities for a technologically advanced and diverse workforce? Organizations must start by realizing that a four-year college degree may no longer be a prerequisite for positions that have traditionally required one. Higher learning institutions are already adjusting by creating shorter degree programs and certificate plans. I think the time may come when a student can take a variety of shorter certificate courses to master specific skill sets and then stack those certificates to achieve a broader degree. Experiential learning through company projects has also gained momentum.

The Opportunity for Organizations

While these changes will create many challenges for organizations, they also create a unique opportunity to change how we approach talent development. At the same time that birth rates are declining, older workers are staying in the workforce longer—AARP notes that the age 65 and older population is a growing segment of the workforce—and McKinsey research estimates that there are upwards of 40 million adults that will require additional technology training. It will become important for organizations to create upskilling opportunities for workers at all stages of their careers. Virtual classes and online degrees make this easier than ever. Andrew Allen, the director of experiential learning at the University of Illinois Gies College of Business, says, “Workers will be able to on-ramp and off-ramp educational opportunities as needed throughout their careers to maintain expertise with technology, social, and other skill sets needed to continue working.”

Of course, there are aspects of in-person instruction and real-world experience that provide socialization, problem-solving, and collaboration skills that don’t translate well to virtual learning. As organizations move away from requiring traditional four-year degrees, they’ll need to consider how to replicate or teach these desirable attributes. Incorporating significant education into each employee’s development plan will be critical, curated based on position, company needs, and individual goals. Education—and its costs—will be more broadly utilized as a value-add employee benefit, similar to health care or wellness.

As these four trends change the workforce, boards and their management teams will need to educate themselves on the changes coming and implement new strategic initiatives. Organizations with innovative talent acquisition and development plans will find themselves with a robust and truly diverse talent pipeline, full of workers who are more than able to take the reins when their time comes.