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April2022

Techtalenttectonics:Tennewrealitiesforfinding,keeping,anddevelopingtalent

Largeincumbentscancompetesuccessfullyfortechtalent—butonlyifthey’rereadytocompletelyrethinktheirentireHRapproach.Techtalentthinkandactdifferently.

bySvenBlumberg,RanjaRedaKouba,SumanThareja,andAnnaWiesinger

Credit:KonstantinMishchenko/Pexels

1PensionMarketsinFocus2016,OrganisationforEconomicCo-operationandDevelopment,.

2Investment&PensionsEurope,August2017.

Latelastyear,Facebookannouncedplanstohire10,000peopleinEuropetobuildoutits“metaverse,”anaugmented-realityspace.1Amazon,meanwhile,announcedplanstohiremorethan55,000peopleforcorporateandtechnologyjobsintheUnitedStates2evenasGoogleismovingtohirethousandsoftechnologists.3

ExacerbatingthisissueistheGreatAttrition,whichisalreadybeingfeltinmanycompaniesastechtalentstreamsoutthedoortopursuebetteropportunities.Beingabletoworkremotelyhasmadeiteveneasierforpeopletoleave,sincegeographyislessofabarriertopoachingtalent.

Formanycompanies,thesemovescomewithabigwarning:thereisamassivepushhappeningtograbtalent,andyoumaybemissingout.

Theseseismicshiftscomeatatimewhentheshortfallfortechtalentisalreadyacute.Ouranalysisshowsthatsignificantskillgapsexistinsevenareas,?andweexpectthemtobecomemoresevereovertime(seesidebar,“Techtalent:Skillsindemand”).InGermany,forexample,780,000additionaltechspecialistsareneededby2026tomeettheeconomy’sdemand.?Globally,morethanthreemillioncybersecuritypositionswereunfilledasof2020.?

Businessleadersarefeelingtheheat.AccordingtoaMcKinseysurveyofmorethan1,500seniorexecutivesglobally,some87percentsaytheircompaniesarenotadequatelypreparedtoaddresstheskillgap.?AndaccordingtoanotherMcKinseysurvey,61percentofHRprofessionalsbelievehiringdeveloperswillbetheirbiggestchallengeintheyearsahead.?

1RyanBrowne,“Facebookplanstohire10,000peopleintheEUtobuilditsvisionfora‘metaverse,’”CNBC,October17,2021.

2JeffreyDastin,“AmazonCEOunveils55,0000techjobsinhisfirsthiringpush,”Reuters,September1,2021.

3SherylEstrada,“Googlehashiredlikecrazyfortechtalent,”Fortune,February2,2022.

4MatthiasDaub,RanjaRedaKouba,KateSmaje,andAnnaWiesinger,“Howcompaniescanwinintheseventech-talentbattlegrounds,”McKinsey,October19,2020.

5“DieLückewirdgr??er:Bis2026fehleninDeutschland780.000Tech-Spezialisten”[“By2026,Germanywilllack780,000techspecialists”],StifterverbrandandMcKinsey,November24,2021.

6SteveMorgan“Cybersecuritytalentcrunchtocreate3.5millionunfilledjobsgloballyby2021,”CybersecurityVentures,October24,2019.

7AccordingtoasurveyconductedinNovember2017with~1,550respondents,splitequallybetweentheUnitedStates,Europe,andtherestofworldandincluding~1,100fromcompanieswithrevenuesof$100millionormore.

8BryanHancockandBillSchaninger,“HRsaystalentiscrucialforperformance—andthepandemicprovesit,”McKinsey,July27,2020.

Techtalent:Skillsindemand

WithnewtechnologiesanddemandsonITemerging,companiesneedtoexpandtheirtechcapabilities.McKinseyanalysisshowsthatthefollowingskillareasaremostindemand:

—DevOps:agileproduct-life-cyclemanagement,scrummanagement,agilecoaching,continuousintegrationand

continuousdelivery(CI/CD)

—Platformsandproducts:productownership,life-cyclemanagementacrossplatformlayers,IndustrialInternetof

Things(IIoT)

—Automation:cognitiveAI,robotic-process-automation(RPA)technologies,AI-enabledanalytics

—Customerexperience:designthinking,userresearch,journeymapping,test-and-learnatscale,prototyping

—Cybersecurityandprivacy:data-protectionlawsandpractices,shift-leftsecurity

—Datamanagement:analytics,datascience,dataengineering,use-caselife-cyclemanagement,automatedmachine

learning

—Cloud:multicloudandhybrid-cloudarchitecture,smartdistribution/metering

2Techtalenttectonics:Tennewrealitiesforfinding,keeping,anddevelopingtalent

Techtalent

Top10thingstogetrighttoind,keep,and

growthetechtalentyouneed.

1

2

3

4

5

Talentmanagement

Talentmanagementisacomplete“hiretoretire”program.Youcan’tbegoodatjustoneaspectoftalentmanagementandexpecttosucceed.

Talentgap

Beclearaboutthetalentyouneedandthetalentyouhave—yourtalentgapiswiderthanyouthink.

Candidateexperience

Insteadofa“recruitingprocess,”putyourselfintheshoesoftherecruitandcreateagreatcandidateexperience.

Employeevalueproposition

Understandwhatyourtalentreallycaresabout.Toptalentisinterviewingyou,nottheotherwayaround.

Skillbuilding

Youcan’thireoroutsourceyourwayoutofyourtalentproblems.Muchofyourtalentwillhavetocomefromwithin,sorampupyourreskillingandupskillingcapabilities.

6

7

8

9

10

Empoweredteams

Giveyourteamsthefreedomtoworkby

buildingsmall,empoweredteamswithaclear

mission,andthenlettingthemexecute.

Craft

Eliminatemeaninglesstoilandbadpractices—

toptalentwon’tputupwithit.Focuson

eliminatingbarrierssoyourtalentcanfocuson

theimportantwork.

Developerexperience

Createanenvironmentthatdelightsand

inspiresyourdevelopers.Productivityand

performancewillfollow.

Careerpath

Morethantwo-thirdsofdevelopersdon’twant

tobecomemanagers.Createcareerpathsfor

engineerstogrowandbuildontheircraft.

Diversity

Diversity,equity,andinclusion(DEI)are

strategicnecessities.Createadiversework

environment—techtalentincreasinglyexpects

it,anditbringsbetterresults.

Techtalenttectonics:Tennewrealitiesforfinding,keeping,anddevelopingtalent3

Despitetheformidablechallengesinfindingtechtalent,incumbentcompaniescannotexpecttosucceedinthedigitalworldwithoutbeingtechnologicallystrong,whichissimplynotpossiblewithoutadeepbenchoftechtalent.Infact,developingrobustpeopleandtalentstrategiesareamongthehighest-valueactionsabusinesscantake.?Techtalent,therefore,shouldbeaCEO’stoppriority.

Basedonourworkonmorethan80technology-talenttransformations,wehaveidentifiedasetoftenrealitiescompaniesneedtofaceandwhattheycandotoaddressthem.

1.Youcan’tbegoodatjustoneaspectoftalentmanagementandexpecttosucceed

Fulfillingyourtech-talentneedsisincreasinglyamultifacetedcontest.Findinggreattalentdoesn’thelpifthetalentdoesn’twanttoworkforyou,andhiringgreattalentdoesn’tmatterifthetalentleavesquickly.Companieshavetoinvestsimultaneouslyacrosstheentire“hiretoretire”lifecycle.

Thatstartswithdevelopingadigital-talentengine,afocusedteamdedicatedtomanagingtheentireemployeeexperience,fromhiringandonboardingtocreatingnewcareerpathsandcontinuouslybuildingskills.Onelargeagriculturalcompanyestablishedadigital-talentengine,whichfocusedonmodernizingtalentsourcingbyusingcontract-to-hireagreementsandleveragingnewdigitalchannels(suchasTopcoder),includingcodingexercisesincandidateinterviews,andimplementingacandidate-trackingsystemtomanagethehiringjourney.

Thekeyactivitiesofthismoreholisticapproachtotalentcanbebrokendownintothreeareas:

—Workforce:Developaclearandsurgicalunderstandingofyourtalentgaps,apracticalplantofillthem,and

ahiringapproachcenteredoncandidateexperience.

—Workmodel:Putinplaceaworkmodelthatenablessmallteamsofengineerstoworkonthemost

interestingproblemsunfetteredbylayersofmanagement.

—Workplace:Createaworkenvironmentthatnurturestalentthroughdiversityandasupportiveculture,

whichisespeciallyimportantwithinthecontextofhybridandremotemodels.Thisincludesprovidingdifferentcareerpathsthathelptalentdeveloptheirmostvaluedasset:theirskills.

Workforce

2.Closeyourtalentgap;it’swiderthanyouthink

Themosteffectivetalentstrategiesaregroundedinaclearviewofwhatcapabilitiesthebusinessneedstogeneratevaluecomparedwiththoseitalreadyhas,especiallyintheareaofcloudtalent.While58percentoforganizationsanalyzetheirskillgaps,10ourexperienceshowsthatcompaniestypicallyunderestimatetheirsize.That’softenbecausecompanies’talentanalysisstopsattherolelevelratherthanprobingwhatskillstheirpeopleactuallyhave.

Whenonedigital-attackerbankdidadetailedassessmentofitstalent,forexample,itwasshockedtofindthatonly35percentofitsseniortechtalenthadtheskillsthebankneeded,andmorethan50percentofthetalentrequiredsignificant,systematiccapabilitybuilding.

Workforceplanningalsoneedstohappenmuchmorefrequentlythanthetypicalonceortwiceayearinordertokeeppacewithchangingdemandsandshiftsinthemakeupoftheorganization.

9“Sevenlessonsonhowtechnologytransformationscandelivervalue,”McKinsey,March11,2021.

10“Buildingworkforceskillsatscaletothriveduring—andafter—theCOVID-19crisis,”McKinsey,April30,2021.

4Techtalenttectonics:Tennewrealitiesforfinding,keeping,anddevelopingtalent

Workforce

3.Thinkcandidateexperiences,notrecruitingprocess

Toimproverecruiting,HRdepartmentsandhiringmanagerstendtofocusonimprovingtheirrecruitingprocessesandintroducingefficiencies.Amoreeffectiveapproachisto“thinklikearecruit”andfocusonthecandidateexperience.Thatincludesimprovingthevirtualcandidateexperience,since70percentofcompaniesinarecentsurveysaidtheirrecruitingandonboardingwasatleasthalfvirtual.11Waysofdoingthatincludethefollowing:

—Techtalentwantstomeetothertechnologists,somakesurethatengineersandotherrelevantrolesare

partofyourinterviewteam.Bringyourbestpeopletointerviews,onlineevents,andconferences.

—Goodcandidatesareambitiousandhavemanyoptions.Developaninterviewandevaluationapproach

thatcanleadtoadecisioninaslittleasoneday.Beforecandidatesevencomethroughthedoor,assesstheirskillswithtoolssuchasHackerRank.

—Postandprayisnotastrategy.Techtalentisn’tjustgoingtojobsites,sobeactiveinnontraditional

channels,suchashackathons,open-sourcechannels,andspecificcuratedsitesfordifferentskills.Forsomecompanies,GitHubistheirbestrecruitingchannel.

—Toptalentiseagertogetgoing,sowhennewhiresshowuptostartwork,makesurethereisan

onboardingpointofcontacttohelpthemnavigatethecompany.Theonboardingprocessshouldbestreamlinedsothat,bytheendofweekone,developersareabletocommitcode.

Anentertainmentcompanyrevampedthecandidateexperiencebyreducingthestepsintheprocess,creatingclarityonthebarforeachrole,andensuringthatengineersconductedtheinterviews.Thesethreeshiftsreducedtheir“first-touch-to-offer”timefrommorethan90daystofewerthanten.

Workforce

4.Toptalentisinterviewingyou,nottheotherwayaround

Whywouldtechrockstarswanttoworkforyou?Whilemoneyisimportant,topcandidatescareaboutworkingwithnewertechnologies,buildinguptheirskills,beingpartofaculturethatvaluestechnology,connectingwithapurposetheyfindmeaningful,and,mostimportantly,workingoninterestingandinspiringproblems.TheCIOofaleadingEuropeanonlinemarketplace,infact,choseScalaoverJavabecausethatwastechtalent’spreferenceatthetime.

Theemployeevalueproposition(EVP)iscriticalinaddressingthesepoints.OneEuropeanpublic-sectorinstitutionwashavingtroublefilling400techroles.ItrefocuseditsEVPonitsmissiontoworkforthe“greatergood,”suchasestablishingdigitalservicesforallcitizens,improvingthecitizenexperience,andmakingservicesprovidedbytheadministrationfasterandmorereliable.Itwasabletosignificantlyincreasethenumberofapplicationsreceivedandthusshortentheprocesstofillpositionstoamatterofweeksratherthanthemanymonthsitusedtotake.

TheEVPneedstobebackedup“ontheground”withprogramsandaculturethatexplicitlydeliveronthepromise.IftalentseesthatthereisadisconnectbetweenthestatedEVPandtherealityontheground,they’requicktoleaveand,worse,tellothers.Thatcanbedevastating,becausethemostcommonwayjobseekerslearnaboutcompaniesisbyreadingcompanyreviewsfromthird-partysites,suchasGlassdoor

orBlind.12

11Thefutureofwork:2022globalreport,Monster,January2022.

12Developersurvey2020,StackOverflow,May2020.

Techtalenttectonics:Tennewrealitiesforfinding,keeping,anddevelopingtalent5

Description

Action

Workforce

5.Youcan’thireoroutsourceyourwayoutofyourtalentproblems

Theproblemwithrelyingonhiringisthatoftenthereisasignificantlagtimebeforesomeonebecomesproductiveaswellastherebeingageneralshortfallofqualifiedtalent.Similarly,corecapabilitiesneedtoremaininhousetoenablethebusinesstomovequickly,sooutsourcingcan’tbethemainanswereither.Therealityisthatmuchofthetalentyouneedwillhavetocomefromwithintheorganization.Yourworkforceplanningshouldidentifytheappropriatebalancebetweenbuildingskillsinternally,hiringexternally,andoutsourcing(Exhibit1).

Exhibit1

Developaworkforce-prioritygridtoidentifywhatrolestobuild,buy,andpartnerwithintheorganization.

Coretobusinesspriorities

Coreroles

(capabilitiesthatarehigherprioritytothebusiness)

Non-coreroles

(capabilitiesthatarelowerprioritytothebusiness)

Workforce-prioritygrid

2

Buy

Build

Build

Partner

3

Partner

Partner

Partner

Buy

1

Urgent(<3months)

Flexible

Timeconstraintstofillrole

Typicalroles

1

Acorerolewithflexibletimeconstraints

Hiretheseroles(eg,machine-learningengineersmaybedifficulttohireandcantakemonths)

Continuetoinvestintheorganizationbyidentifyingemployeestoupskill/reskill(eg,productowners)

Partneronnicherolesthataretooexpensivetohireandtaketoolongtoupskill/reskill

Full-stackengineerMachine-learningengineer

Productowner

2

Acorerolewithurgenttimeconstraints

Acceleratehiringasmuchaspossibletokeepcorerolesinternal

Identifyemployeesintheorganizationwhocanbereskilled/upskilledasalonger-termsolution

Partnerintheshorttermifrolescannotbeimmediatelyfilledthroughhiringorreskilling/upskilling

Front-end/back-end

engineer

Scrummaster

Agilecoach

Datascientist

3

Allnon-coreroles

Partnerwithvendorsorbuild

partnerships

Designer

Full-stackengineer

6Techtalenttectonics:Tennewrealitiesforfinding,keeping,anddevelopingtalent

Tobuildupskillsinternally,topcompaniesmovepasttraditionalandsubscaleprogramstomaketrainingbothcontinuous(throughongoinglearningjourneys)andtailored(withlearningprogramscreatedforspecificrolesandjobfamilies);seeExhibit2foranexampleofsuchalearningjourney.Theyplaceanemphasisonbuildingexperienceratherthansimplyprovidingcertifications.Effectivereskillingisbasedonaclearunderstandingofwhatexistingskillswillbesttranslateintonewskills.Forexample,projectmanagersdon’ttendtomakegoodscrummasters,whileamotivatedmainframeengineercanoftenlearnnewtechnologystacksandlanguages.

Workmodel

6.Buildsmall,empoweredteamswithaclearmission,andletthemexecute

Anexpertdeveloperismorethantentimesmoreproductivethananovice.13Butmanyofthesetop

engineerscan’tworkintraditionalorganizationswhereasurfeitofmanagersandbureaucraticprocessesinhibitthemfromdoinggoodworkatpace.Inmanyorganizations,theratioofengineerstomanagementandcoordinationandsupportpeopleis30:70;thatneedstobeflipped.

TechleadersreshapetheirITorganizationsaroundsmallsquadstocreatehighlymotivated,self-managing,agileteams.Insteadofmanagingtheteamdaytodayorsimplytellingthemwhattodo,successfulleadersfocusonclearingorganizationalroadblocks,enablingteam-leveldecisionmaking,andsettingvisionanddirection.

Onegroupinsurerstrugglingtomodernizehowitonboardednewclients,decidedtobuildasmall,autonomousteamwithacoreofitsbestengineeringtalent.Itgavetheteamabroadchartertoreinventtheonboardingprocessandprotectedthemfrommostoftheredtape.Theteamdesignedacompelling

13PeterJacobs,KlemensHjartar,EricLamarre,andLarsVinter,“It’stimetoresettheITtalentmodel,”MITSloanManagementReview,

March5,2020.

Exhibit2

Anexperiencedappdevelopernewtocloudwillneedtogothroughatailoredlearningjourney.

Cloud

platform101

Individual

performanceexpectations

Cloud-security

specialization

(elective)

In-personsessionVirtuallivesessionSmall-groupcoaching

IndividualcoachingandperformancemanagementVirtual-learningcommunityactivities

Targetedcoaching1

Seniorleader“iresidechat”

Eicientclouddevelopment

Cloudrisk(elective)

Cloud

accelerator

Targetedcoaching1

Cloud

operations(elective)

Interim

performanceassessment

CloudSRE

Cloudcost

management

(elective)

1Inadditiontoday-to-day,on-the-jobcoachingfromleadersandpeers.

Source:McKinseyanalysis

Techtalenttectonics:Tennewrealitiesforfinding,keeping,anddevelopingtalent

Annual

performancereport

7

clientjourneyanddevelopedagroundbreakingtechnologythatconnectedtoeachclient’shuman-resourceinformationsystem(HRIS).Ituploadedemployeeinformation,automaticallydeterminedinsurability,andonboardedemployeesintothenewplan.Thisapproachhelpedtheinsurercloseitsfirstmultimillion-dollarsaleonlyfourmonthsafteritwaslaunched.Inaddition,theteammembersembracedtheexperienceandbecamechampionsofthenewwayofworking.

Workmodel

7.Eliminatemeaninglesstoilandbadpractices—toptalentwon’tputupwithit

Youcan’thirevirtuosojazzpianistsandhavethemjustpracticescalesallday.Inthesameway,toptechtalentneedsaworkenvironmentwheretheycanfullypracticetheircraft.Leadingorganizationsfocusoneliminatingasmanybarriersaspossiblefortheirtopcoders.Theyinvest,forexample,indevelopinghigh-quality,reusablecodeandprovideworld-classplanninganddevelopmenttoolstomakeengineers’workliveseasier.Theystrivetomakemorethan80percentoftestingautomatedandcontinuous—withdevelopmentdoneonlyaftertestcasesarewritten.1?

State-of-the-artproductionandpreproductionenvironmentsarewellintegratedwithdevelopmentandtestingenvironments,whilebestpractices,suchascontinuousintegrationandcontinuousdelivery(CI/CD)andworkinginthecloud,arethenorm.

Leadingcompaniesarealsoinvestinginlow-codeandno-codeplatformsthatenabletheaveragebusinessusertodevelopapplicationswithoutanysoftwareexperience,freeingupseasoneddeveloperstofocusonthemostchallengingtasks.Onepharmaceuticalcompanygrewitslow-codeplatformbasefromeightusersto1,400injustoneyear.1?

Onemodeltoconsideristhesite-reliability-engineering(SRE)approach,wherespecificchampionsareentrustedwith,andaccountablefor,eliminatingtoilfordevelopers.

Workplace

8.Focusondeveloperhappiness,andproductivityandperformancewillfollow

Retainingtoptalentrequiresanenvironmentwheredevelopersaretreatedlikeinnovators,notcodewriters,andareactiveparticipantsinthebusiness.McKinsey’sOrganizationalHealthIndexresearch,however,hasshownthatITfunctionsoverallscorewellbelowtheaverageintermsoforganizational“health”(theabilitytoalignaroundandexecutestrategicgoals).

Businessleaderscanreversethissituationbymakingthequalityofthedeveloperexperienceaprimarymetricofsuccessandusingdatatocloselytrackjobsatisfaction.Microsoft,forexample,turnedtocalendaringdata(amongothersourcesofinformation),whichrevealedthatinthecompany’sdevicesunit,managementpracticesrelatedtomeetingswerereducingengineers’jobsatisfaction.1?Oneofthemostimportantmetricsishowmanyofyourdevelopersarerecruitingotherdevelopers,becauseitsignalshowstronglyyourpeoplebelieveinyourcompanyanditsvision.Somakereferralprogramstransparentandefficient.

Growthisalsoessentialinbuildinganengineeringculture,anditcantakemanyforms.Topengineersdon’twanttojustbangoutfeatures;theywanttoexperimentwithnewcode,becomebetterdevelopers,and

1?OndrejBurkacky,JohannesDeichmann,StefanFrank,DominikHepp,andAndréRocha,“Whencodeisking:Masteringautomotivesoftwareexcellence,”McKinsey,February17,2021.

1?ShivamSrivastava,KartikTrehan,DilipWagle,andJaneWang,“DeveloperVelocity:Howsoftwareexcellencefuelsbusinessperformance,”

McKinsey,April20,2020.

1?NeilIrwin,“Themysteryofthemiserableemployees:Howtowininthewinner-take-alleconomy,”NewYorkTimes,June15,2019.

8Techtalenttectonics:Tennewrealitiesforfinding,keeping,anddevelopingtalent

followpassionprojects,suchasreducingtechdebtoroptimizingsystems.Topcompaniesbuildinextrabuffertimetoallowengineerstotrynewlanguagesortoolsthataren’tnecessarily“inscope.”Bythesametoken,however,engineersexpectcleartargetsandrapidfeedbackloopstoletthemknowifthey’rehittingtheirmarks.

Creatinganenvironmentof“psychologicalsafety”(wheredevelopersfeelsaferaisingissuesquickly,forexample)isalsoanimportantelementofanengineeringcultureandisthenumber-oneenablerintermsoftechnology’simpactonbusinessperformance.1?Techleaderscanrole-modelspecificbehaviors,suchasdemonstratingconcernforteammembersasindividualsratherthanjustemployeesandactivelysolicitingtheirinput.

Workplace

9.Stopturninggreatengineersintobadmanagers

Don’texpectyourengineerstoaspiretobecomepeoplemanagers.Morethantwo-thirdsofdevelopers,infact,don’twantto.1?Theseexpertsinsteadprefertokeeptheircraftsharpandpursueevermoresophisticateddigitalchallenges.

Forthisreason,digitalorganizationsoftenhavebothmanagerialandnon-managerialcareerpathsfortechtalent.Leadingcompaniesuselateralcareermovestopromotecareergrowthandexcitingcareeroptions.AtAmazon,forexample,peopleareencouragedtomoveacrossdifferentproducts,channels,and/orrolestolearnnewskillsandgainexpertiseinmultipleareasofthebusiness.Similarly,atSalesforce,itiscommonforengineerstomovelaterallyacrossmultipleproductstogainexperience.Thetechnicaltrackshouldbeorganizedaroundclear“jobarchitectures”andexpectationsforadvancementateachlevel.

Workplace

10.Diversity,equity,andinclusion(DEI)arestrategicnecessities,notspecialinitiatives

Gender-diversecompaniesare25percentmorelikelytofinanciallyoutperformlessdiversecompanies,whileethnicallydiversecom

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