Companies’ talent needs are changing, but the way companies manage talent isn’t keeping up. Workforce demands evolve in a matter of months, leading to widening skills gaps. Nearly two-thirds of leaders (64%) reported using generative AI (GenAI) to reshape their organizations, a sign of the magnitude of the shift. Geopolitical and global economic tensions are exacerbating the situation.
To find, develop, and retain people with needed capabilities in dynamic and sometimes volatile business conditions, companies must balance four core paradoxes: preserving predictability at accelerated speeds, dealing with scarcity in the midst of abundance, managing the need for rapidly evolving skills with slow training methods, and reconciling individual motivation with common incentives. Resolving these paradoxes in an optimal way isn’t about choosing one over the other. It requires figuring out how to turn seemingly incongruous tensions and apparent contradictions into tangible sources of competitive advantage.
Companies that take a strategic approach to navigating the turbulence can create a powerful competitive advantage. Doing so involves focusing paradox-busting activities on the main stages in the talent management life cycle: anticipating, attracting, developing, and engaging employees.
The Paradoxes of Modern Talent Management
A paradox is a situation with seemingly contradictory qualities or phases. Modern talent management is awash in contradictions.
Predictability. Demands for talent evolve quickly in response to equally rapid market shifts. But building skills takes time. This is the predictability paradox, and people management leaders are well aware of it. In a 2023 survey, 70% of HR professionals cited talent gaps and people challenges as their biggest business obstacle. Companies can use scenario planning—imagining multiple “what if” situations—to manage in a climate of ambiguity and to anticipate the types of talent they’ll need in the future. Many companies take that approach for financial planning and for sales and operations planning, but too few do it for strategic workforce planning. Talent planning that’s out of sync with business planning also poses a budget problem, since the company may not be able to identify and reserve funds for needed talent initiatives.
Scarcity. Flexible work models, talent mobility, and access to more hiring channels have given companies access to more talent than ever. Despite the seeming abundance of potential employees, many enterprises can’t find people with the precise capabilities, culture fit, or leadership potential they seek. This is the scarcity paradox. In 2023, 77% of employers worldwide reported having difficulty finding the skilled talent they needed, a 17-year high. At the same time, major talent pools remain underused. In the US alone, about 70 million people are classified as “skilled through alternative routes” because their capabilities come through experience or training rather than in the form of a four-year college degree. Yet many employers lack effective mechanisms to find, evaluate, and integrate people with such skills.
Skills. The skills that companies need change seemingly overnight. And those skills may be outdated by the time companies embed them in learning and development programs. The most common types of learning and development programs, such as on-the-job training, take the most time. The gap in AI skills is particularly noticeable. In BCG’s 2025 AI at Work survey, just 36% of respondents said that their employers provided sufficient AI training. In many cases, companies do not redesign methods for developing critical skills to keep up with the times, and do not measure them properly to determine the return on the investment.
Motivation. A disconnect exists between employees’ motivation and engagement with work and organizations’ tendency to offer generic incentives that may not meet individual needs or foster sustained commitment. Employees derive job satisfaction from various motivations, including meaningful work, connecting with colleagues, financial compensation, and flexible work options. But companies often take a one-size-fits-all approach to engagement, a disconnect that decreases job satisfaction and increases turnover. According to previous BCG surveys, 53% of frontline workers felt burned out and 43% were actively looking for a new job, signs of widespread disengagement and unmet individual needs. READ MORE
By Suketu Shah, Vinciane Beauchene, Ruth Ebeling, Julie Bedard, Frank Breitling, and Chloe Skibba
Source: bcg.com
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