There’s lots to like about generative AI: reduced drudge work, accelerated ability to handle more complex and stimulating tasks, and working at the cutting edge of a technology revolution. But risks also loom. Without deliberate strategies, GenAI could stunt employee and company growth. Fortunately, there are straightforward steps leaders can take to mitigate this possibility and see their organizations thrive.
The Challenge: Undercutting Your Talent Pipeline
GenAI is being used for many tasks that junior talent used to handle — basic coding, front-line customer service, low-complexity operations, writing drafts, and researching information. This has created an interesting dichotomy in which many younger hires are either skipping ahead to higher-value activity and positions or are not getting hired in the first place. Both have definite consequences for fintech and many other industries.
First, executing on highly complex tasks and understanding end-to-end processes requires a mastery of lower-level skills. (Imagine trying to learn calculus without first understanding basic algebra.) Without a foundational level of knowledge, staff won’t be able to resolve the root causes of problems. Say ChatGPT turns up questionable data. Without a solid background in the business, a colleague might not know to challenge the information and unwittingly put the organization’s reputation at stake. GenAI is also fundamentally backward-looking, synthesizing existing data to develop its output. Innovation requires a foundational understanding of current workflows in order to envision a different future.
A second repercussion of GenAI is companies not hiring junior talent. They might save money in the short term, but who is learning the ropes and will be able to lead one day? Hiring from the outside is possible, but institutional knowledge from staffers who scaled the ranks is invaluable. They know the company culture, end-to-end processes, and client dynamics.
A lack of younger perspectives can also create organizational blind spots. As my Smarter Collaboration co-author, Heidi K. Gardner, explained in a recent Harvard Business Review article, companies that capitalize on differences between generations can innovate faster, forge stronger bonds with their customers, and boost learning across ages.
The Solution: Develop an AI-fueled Talent Strategy
Based on input from professional development experts as well as my experience leading teams in financial services, I believe an integrated approach to talent and AI strategy is necessary. It can make the difference between business success and mediocrity.
“Organizations that are more mature in investing in their early talent systems don’t see GenAI as a mere tool. It’s a professional and business development engine,” says Khairunnisa Mohamedali, chief innovation officer at The Smarty Train. “It’s like a hammer — you can use it to hang up a painting or build a beautiful house.”
Here are three ways for organizational leaders to exercise this longer-view approach:
- Don’t cut core training. Keep up your basic skill-building and mentorship programs, even if they overlap with GenAI capabilities. GenAI can only know what is written down, which means it misses nuances about your organization, client base, and market. When juniors learn how to perform standard tasks, they become more effective at complex work and problem-solving. We learn through doing, so make sure that development programs aren’t just lectures but instead offer opportunities for hands-on practice, role play, and experimentation.
- Don’t stop hiring fresh talent. As much as you’d like to reduce costs by hiring fewer juniors, think about the ramifications. You run the risk of your talent pipeline — the people who are supposed to lead the organization one day — becoming too top-heavy and lacking options to handle tasks and interactions outside of GenAI’s abilities. You also lose out on the distinct expertise that new generations bring to the table, such as social media expertise, novel ways to use GenAI, and an understanding of popular culture — including terminology and trends that allow you to connect better to customers.
- Bring GenAI into L&D. GenAI should be a part of your company’s overall strategy as well as your talent development strategy. We are hearing about novel approaches for balancing traditional training with AI-led guidance. For example, new AI-led technologies detect skill gaps and recommend individualized training programs accordingly, with real-time coaching features and immediate feedback.
AI’s startlingly rapid evolution over the past year makes it hard to predict the impact it will have on employees at every level of an organization. Nevertheless, leaders need to be vigilant about how it affects talent recruitment, development, and retention, to ensure a strong pipeline of future leaders.
Ivan Matviak C91 G98 WG98 is executive vice president at Clearwater Analytics, co-author of Smarter Collaboration: A New Approach to Breaking Down Barriers and Transforming Work, and co-founder of Smarter Collaboration Int’l.