Rethinking talent in the digital age

Let’s face it. We are all thinking it. With record-high retail store and high street bank closures, and predictions of robots driving our cars and taking our jobs – what does the future hold for our careers and those of our children?


With 31% of organisations saying Artificial Intelligence (AI)* is firmly on the agenda for the next 12 months, what once seemed like only part of a fictional movie is very much becoming a reality.

Robotics and AI will no doubt transform the workforce, but are we ready? After all, “recruiting, developing, motivating, and retaining highly skilled, talented people is the single biggest barrier to CIO success” (Forbes, Jan 2017). According to the British Chamber of Commerce 2017 study, three in four UK businesses have reported a digital skills shortage among their employees.

What impact will the digital age** have on our search for talent? How can leaders identify the skills they need in the future and how can they ensure their organisation can adapt to the changing digital landscape? This blog explores the steps leaders can take, today, to bring their talent strategies in line with the digital age.

Rethinking skills in the digital age 

The digital age promises expansion through widespread, rapid and radical change to the nature of work. Automation will have a huge impact on the global workforce: by 2030 an estimated 50% of current activities will be automatable, and 6 of 10 current occupations have technically automatable activities. Work, and workers, will be displaced, meaning millions of people worldwide may need to change jobs, re-train or upskill. At the same time, AI and Machine Learning are also creating jobs elsewhere. AI alone is an emerging field that is expected to create 2.8 million jobs by 2020.

The skills organisations need for the future are changing, with a greater focus on innovation and creativity. With the rise of AI leading to quicker gains, people are freed up to focus on creating innovative products and solutions. According to the 2018 Deloitte Global Human Capital Trends survey human skills, such as cognitive abilities (55%) and social skills (52%), are predicted to be in tremendous future demand. This change in the skillset needed by businesses is creating a key challenge for leaders today with 73% of CEOs saying they see skills shortage as a threat to their business, compared with 46% just six years ago.

To address this challenge, leaders should be developing hiring strategies long before the skills gap becomes an issue. First leaders need to consider the skills and capabilities required to execute their strategy in the digital world. Comparing these requirements to their current employee skill base, will enable them to develop a workforce plan and robust talent strategy, defining when to buy, build or borrow skills and how to create an enabling culture. What do employees need to do differently to adapt to a digital culture?

Rethinking sources of talent in the digital age

The advent of a digital economy has enabled a rapid transformation of the shape of the workforce: the gig economy*** and rise of freelance means that traditional models of employment are changing. The notion of lifelong careers and full-time jobs are no longer the norm. In many ways, it has never been easier to go it alone. Geographical boundaries are being eroded as more and more tasks can be completed remotely, with many businesses able to move to 24/7 operations by taking advantage of a diverse workforce bringing not only additional flexibility in operating hours but greater diversity of thought.

With millennials soon to represent half of the workforce, organisations need to rethink the way in which they source talent. According to a recent study by Future Workplace study 91% of millennials expect to stay in a job for less than three years. The rise of the gig economy presents a number of challenges for leaders from adapting recruitment and onboarding processes, exploring internal mobility programmes to energising and engaging freelance talent and preserving an existing culture with a constantly changing workforce.

Leaders need to set themselves up to be able to flex the shape and size of their organisation with changing demand, sourcing skills from the freelance labour market and gig economy as needed. Some of the key activities leaders can begin to implement today include developing a flexible operating model, adapting sourcing and hiring processes to prepare to recruit from a wider range of sources, and mapping out a clear plan for taking advantage of new sources of labour. How will organisations assess and recruit candidates from a new area of skills they currently don’t have?

Rethinking managing and leading talent in the digital age

As the digital economy evolves we can be sure that there will be continuing focus on managing the impact on people, both within organisations, and on a wider economic level. As organisations move to more agile flatter hierarchies, engagement and motivation of the workforce is key with a focus on the employee experience. Leaders and managers should move away from traditional end-of-year appraisals and provide constant real-time feedback alongside creating an environment of continual development, where people can move fluidly internally and externally. The question is no longer about who do you work for but with whom do you work.

Leadership continues to play a critical role in developing a culture in which innovation can thrive, both through direction with the “tone from the top” articulating a compelling digital narrative and also through modelling the desired behaviours and actions. But what are the characteristics leaders need to excel in the digital age? It is clear that leading through change requires a very different skillset and as a result we are seeing a significant shift away from traditional command and control leadership styles. When it comes to predicting leadership effectiveness a recent study shows that personality traits such as curiosity, extraversion, and emotional stability are twice as important as IQ, indicating that inherent traits may prove more important than learned skills.

Leadership teams should look at whether they are truly aligned on their vision of the future and this may result in hard decisions about whether the right individuals are in place to continue to lead the business. Any leadership team needs a mix of skills and styles but they all have one thing in common and that is the need to constantly evolve, developing new skills and never settling for complacency. It is also imperative to create an environment for middle management to speak up and for leaders listen to the “tone from the middle” and act on it. Are leaders ready to let go of their empires and direct from the sidelines?


Even though we are starting to predict what the future of work might look like, and understand how digital and AI will shape the workforce moving forward, there is still a great deal of ambiguity in any vision of the future workplace. This is mainly due to the exponential speed of technology development. We therefore need to feel “comfortable with being uncomfortable” when it comes to how our jobs (and those of our children’s) will look like in the future and embrace this as a positive change.

To survive and thrive in the new digital age, companies must first and foremost focus on defining the skills and capabilities required to drive their vision, underpinned by a robust talent strategy and enabling culture, driven by an effective leadership.


*Artificial Intelligence (AI) falls under the “digital umbrella”, as a branch of computer science that aims to create systems that can function intelligently and independently

**Digital age: the current era of technology, characterised by automation, mobile, cloud-computing, big data analytics, social media

*** Gig Economy can be defined as an environment wherein temporary positions are common and organizations engage independent workers on short-term contracts


OC&C Talking Shop, the rise of voice commerce. Feb 27, 2018

People strategy for the digital age, PWC, 2015

What the future of work will mean for Jobs Skills and Wages. McKinsey Global Institute, November 2017

Workforce of the future. The competing forces shaping 2030. PwC, 2017

Extreme onboarding: how to wow your new hires rather than numb them. Dr John Sullivan, July 2015

Rewriting the rules for the digital age. 2017 Deloitte Global Human Capital Trends

How the meaning of digital transformation has evolved, Harvard Business Review, May 2017

Managing talent in a digital age. McKinsey Quarterly, March 2016

What AI can and can’t do (yet) for your business. McKinsey Quarterly, January 2018

Forbes Top 10 CIO Priorities, January 2017

Artificial intelligence is going to completely change your life. World Economic Forum, November 2017

Are you ready for the workforce of the future? World Economic Forum, February 2015

Jobs are changing. But two skills will always be in demand. World Economic Forum, September 2017

7 skills your child needs to survive the changing world of work. World Economic Forum, September 2017

AI Explained in 5 minutes, YouTube, 2017

Intelligence and Leadership: A Quantitative Review and Test of Theoretical Propositions, Journal of Applied Psychology, 2004

Talent strategy for the digital age, People Matters, Oct 2015

The role of SM&CR in changing culture in Financial Services

In today’s world the financial and reputational importance of managing conduct and culture cannot be underestimated. According to Reuters by 2015 misconduct had already cost UK's banks £53bn over 15 years and the world’s top banks £200bn. The Financial Services market remains plagued by high profile incidents and declining public perception, leading to increased scrutiny and reform. Corporate culture and conduct continues to be a significant focus for regulators globally, with many seeing individual accountability as a key instrument for control with regimes such as the Manager in Charge (MIC) in Asia and Senior Manager & Certification Regime (SM&CR) in UK.

But regulation and legislation alone cannot control an individual’s behaviour and decisions. What role does culture have to play, who is responsible for managing culture and conduct, and how can we embed and measure progress against such an intangible concept? This blog explores the role of SM&CR in managing culture and conduct.  

The role of the Boards and Senior Managers in shaping Corporate Culture

There has not been a case of a major prudential or conduct failing in a firm which did not have among its root causes a failure of culture as manifested in governance, remuneration, risk management or tone from the top” Andrew Bailey, CEO FCA.

As defined by John McLaughlin culture is a system of shared assumptions, values, and beliefs, which governs how people behave in organisations. Whilst conduct is the way culture manifests itself in people’s day to day intentional and unintentional behaviour and decisions.

There is a growing understanding across the industry that leadership drives culture which in turn will drive performance. Culture can ultimately be a competitive advantage or an organisation’s Achilles heel. Demonstrating the right behaviours is not only paramount to institutions which have lost trust in the eyes of the regulator, the public, and their stakeholders, but also to candidates, particularly millennials, when choosing their employer for whom brand, reputation and ethical behaviour is a key deciding factor.

The FCA, PRA and FRC in the UK believe culture starts with leadership. “Boards must have a responsibility for culture and must exercise oversight” FRC. The Board themselves must also lead by example, behaving in accordance to the culture they wish to instil. There is a prescribed responsibility under SM&CR for Culture, which often resides with the Chairman, but who is responsible for the conduct of an organisation, managing and overseeing Conduct Risk on a daily basis? Many organisations have struggled with this question as we see responsibility for Conduct Risk moving between CEO, CRO, CCO and COO.

The essence of SM&CR is personal accountability requiring Senior Managers to be comfortable that they are taking reasonable steps in discharging their responsibilities. In order to satisfy these requirements, Senior Managers must ensure that their strategy, governance, business model and underlying culture are aligned and can adapt to regulatory changes. Thus ‘culture, conduct and accountability’ go hand in hand, yet still we see many organisations tackling SM&CR, Conduct Risk and Culture in different projects/teams with little alignment or ownership.

A failure to meet the standards imposed will render an employee liable to enforcement action. In addition, "any employee will be liable to disciplinary action by the PRA or FCA if they are found to have been “knowingly concerned” in a breach" Berwin Leighton Paisner. As in the recent case of Charles Palmer, CEO Standard Financial Group Ltd. The regime is a step change for the industry, but how many institutions are set up to manage this? Do Senior Managers really understand the implications of the regime?

Creating an environment for success

As SM&CR extends to all FCA-regulated firms, bringing an extra 47,000 firms within the scope of the regime, are institutions creating sustainable change or just seeing it as a tick box exercise? How many institutions are embedding the management of conduct, culture and accountability across their organisations or are they just updating job descriptions and responsibility maps to get them over the line?

SM&CR is a key instrument to manage culture, but it can’t be implemented simply through an updated governance structure. An organisation’s operating model needs to align to ensure the full employee lifecycle considers SM&CR from recruitment to exit. The most challenging aspect of the SM&CR is facilitating a culture of risk management and compliance. A number of financial institutions have embarked upon cultural change programmes. Not a surprise after the number of fines that have been issued since the crisis - it’s a lot cheaper investing in good practice, than being subject to another long investigation by the regulator. Yet many organisations will struggle to demonstrate that the SM&CR requirements are properly embedded, so what still needs to change?

Create the environment to ‘speak up’ – Many leaders of organisations talk about having an ‘open door policy’ and capturing ‘the voice of the people’ but are they truly listening to what is being said or do they think they know better? John Higgins’ work on speaking truth to power, emphasises the importance of open and transparent communications and explores the concept of being silenced and silencing others. We believe it is the responsibility of people in a position of power to create the environment for people to speak freely, only then will they be aware of the conduct of the organisation and how to manage it.

  • Define what good looks like and focus on desired critical behaviours –many organisations take a scattergun approach to addressing challenges in their culture without identifying those elements that have disproportionate impact on business outcomes. It is more effective to prioritise a handful of behaviours and embed them across the operating model, starting with defining what they look like at their best. This focused effort can help to prevent the organisation from reverting back to established norms.
  • Build robust processes underpinning the employee lifecycle – it is essential that the introduction and ongoing management of the SM&CR is built on a foundation of robust processes across the employee lifecycle, ensuring that the business can focus on addressing the cultural behaviours which need to be adopted and embedded. Many organisations are just considering the new HR processes and not enhancing the end to end lifecycle and implications across all areas of the organisation.
  • Measure and govern Culture, Conduct and Accountability – bringing culture, conduct and accountability together and using the right metrics to measure behaviour is paramount. Many organisations pull together a list of metrics they have to their disposal rather than thinking through what outcomes they are looking to measure and therefore what metrics can directionally impact the behaviour. It is also important to consider trends not just incidents, in order to identify a ‘dripping tap’ before it becomes an issue. Creating a governance structure that presents a voice from all levels of the organisation is key to bring qualitative and quantitative data together.

Final thoughts – what’s next?

It’s been a long, winding road since 2008 for the entire Financial Services industry and distrust is still prevalent throughout. Financial institutions appreciate the importance of implementing and complying with SM&CR and are taking steps to change culture. Nonetheless, there is still a way to go before trust is restored and with the onset of further regulation and scrutiny, leadership and sustainable change are the key to long term survival.


Culture in Financial Services, a regulator’s perspective - Andrew Bailey (May 2016) Bank of England.

Corporate Culture & the Role of Boards – (July 2016) Financial Reporting Council.

The problem with saying “My door is always open” - John Higgins (2017) Harvard Business Review.

Senior Managers’ Regime for insurers, what you need to know – (July 2017) Berwin Leighton Paisner.

Getting culture and conduct right – the role of the Regulator - (July 2016) FCA.

Extending the Senior Managers & Certification Regime - (July 2017) PWC.

The FCA is making Senior Management responsible for the culture in their firms - (Sept 2016) The Guardian.

UK: FCA Consults On Transition To SM&CR – (Jan 2017) Mondaq.