Now more than ever, organizations are under pressure to grow talent pools while cutting costs. Many are turning to models like fungible talent pools to improve outcomes. In fact, Deloitte reports 85% of HR executives plan to redesign work structures to flexibly deploy skills within three years.
Could fungible talent be right for your organization? In a recent podcast, I explore how leaders and their employees can prepare to implement fungible solutions.
What does “fungible” actually mean?
The term originated in the financial world. It refers to assets that can be used interchangeably, such as money or a commodity. In the HR world, we use the term to talk about how we can help make more fluid choices around our talent. This mindset allows us to think about jobs less as, “This is the team you sit in and the organization you’re always going to represent.” It gives us a chance to think about how we can use our talent in a more fluid manner.
Why has this concept become more relevant today?
Fungible talent helps organizations: Organizations need the flexibility to maximize the talent that they have on board and bring more capabilities to the table without increasing headcount. Most organizations have many people with very diverse capabilities. Fungibility gives us a chance to maximize and optimize our existing talent by looking beyond job descriptions. We can pursue capability-based hiring opportunities rather than investing in additional headcount to fill a siloed set of work activities.
Fungible talent benefits employees too: This approach is also good for employees. I think many of us would enjoy the chance to be a bit more of a MacGyver. We may be less of an expert in one space, but we’re able to come in with our duct tape and fill different gaps in different ways. It can give your team a chance to flex new muscles or maybe dust off some capabilities that they’ve had on the shelf.
How can leaders enable fungibility?
Making sure you identify and source the right skills is only part of the equation:
Flexibility: You need a mindset of flexibility and ambiguity, because you and your team members are going to be entering into new scenarios. They will be picking up new work activities that may still be taking shape before you can provide clean “standard operating procedures.”
Learning Agility: You also need a little bit of learning agility. That’s probably true for most any role, but specifically if you’re in a fungible talent pool, you have to have an appetite for figuring things out. Again, like MacGyver: you’ve got to make the best of this situation and figure out how to best add everyone’s talents in this space.
Talent Sharing: You also need leaders who are very comfortable sharing talent. While that seems like a no-brainer, we do find leaders who tend to take a protectionist perspective on their high performers—sadly to the disadvantage of that talent. They are hesitant to give them up because they provide such big benefits to their team. Leaders should almost reimagine their brand as an internal talent developer: “I’m an internal talent scout finding the best talent and I’m also helping them move to the place where they can have the biggest organization impact.”
Continuous Improvement: Having a continuous improvement mindset helps you be a good coach of people who are in a more fungible talent play. You’re looking at metrics to measure real-time data so you can give them good coaching. You’re helping them stay on these milestones while they are learning and moving and becoming more agile. At the same time, if it’s not working well, you need to be willing to scrap everything and start over, such as looking for different capabilities in the next round of movement.
How do you help employees shift away from rigid role identities and fixed career paths to something more flexible?
That’s a good question because our job architectures are, by definition, fairly rigid. If we can broaden them to think more about talent families vs. a specific career ladder, it gives employees a little more room to move sideways.
Increased Flexibility: My first suggestion is around how HR and leaders architect roles to give employees more flexibility. You wouldn’t want to design your career paths to create a negative consequence. Employees won’t want to go down a job grade or reduce their salary to enjoy the kind of flexibility we want to enable.
Employee Mindset Change: How employees think about their own performance also needs to change. Beyond an individual mindset, a person should think differently about their career when they’re in a more fluid talent landscape.
Tracking individual performance certainly has merit. As a former HR leader, I think you need to have a good pulse on your performance at an individual level. But ultimately, fungible teams are rewarded more at the team level than at the individual level. Employees need to be more open to sharing work and sharing results because that is also how they are being measured and rewarded.
Is fungible talent just for large corporations?
Some people are wonder if fungible talent is better for larger companies. If you’re a mid-market company, say less than 200 employees, you might ask: “Could it work for me?” My answer is, “For sure.” Most of my organization clients are thinking about how to “double hat,” or build on an individual’s capabilities–because they don’t have funds to increase headcount.
I think organizations of any size and in any industry could benefit from thinking about capabilities that hang together, and how they can hire for more diverse capabilities in any one individual in the future. Then they have portability around employees and around their future.
