Trading, like many other verticals, has been experiencing a period of market-driven, technology-enabled change for a while. With the impact and pace of change varying on a commodity-
specific basis, trading organization’s skills, inventories, and talent pipelines are changing shape to fit.
In this uncertain climate, executive search and specialty recruiting firms must exercise risk management in hiring processes to optimize the attraction, and perhaps more importantly, the retention of core talent in high-impact energy & commodities roles.
This risk management perspective is why we often refer to this process as talent optimization. Much like investment strategies that depend on mathematical models and algorithms to determine their investments, so must human capital professionals analyze the market needs and other measurable factors when investing in human capital.
The Role of Talent Optimization
Talent optimization is a series of behavioral and cognitive assessments within a series of robust recruitment and succession planning processes. Role requirements and team “fit” [a standalone topic in an upcoming article in this series] are measured prior to assessments being made. The team’s near-term strategic direction is then superimposed to provide further context. From there, team design is iterated until the desired model and subsequent plans are clear.
Talent optimization uses an analytical approach, systematically removing bias from decision-making processes. With a range of tools and techniques at its disposal, The Energists typically
partners with Predictive (PI) Index to perform these tests to reduce risk in hiring and succession planning processes. As a certified PI partner, the firm has also used the same tools to optimize
its own team design and skills inventory for some time now. Removing all bias (most of all subconscious bias) from the hiring process ensures optimal talent is in place.
Additionally, these and other talent optimization routines are all designed to help drive communication, alignment, and employee engagement aiding productivity and morale way beyond the time of hire or promotion.
Within today’s commodity space, traders are well served exercising risk management strategies to their own people and culture processes to optimize business outcomes. This is where
talent optimization comes into play. Collecting and analyzing market data better than the next person is often how businesses gain competitive advantage. Collecting and analyzing people
data better than the next person has the potential to make that advantage sustainable.
Quantifying the Risk
So, we use workplace assessment tools and techniques that measure behavioral drives and cognitive ability. It can help business leaders understand the needs of a role, team, or project,
and make more informed decisions. But how much risk does this remove? Well, we conflate risk in this context with predictive ability. In doing so the 58% “predictability” quoted in a recent
research paper¹ on the topic is in line with our own experiences. This compares to 1% for Education; 10% for EQ; 7% for reference checking and only 12% for GPA.
However, it is important to bear in mind that tools are just that, they rely on humans, processes, and techniques to deploy and respond appropriately. Which is interesting in itself, as the very
topic is about predicting future outcomes – and past performance does not guarantee anything.
The Energists are Showcasing Talent Risk Management in the Woodlands
Next week, The Energists are attending Energy Trading Week Americas on October 29-30, 2024 in The Woodlands, Texas. This event features more than 1,000 delegates from the energy
sector who will gather to discuss risk management, the trends in trading, and all things related to the energy industry. At our booth, we will be offering behavioral assessments, moderating at
least one panel, and speaking with professionals in the industry about their views on the sector’s human capital challenges of today and tomorrow. Learn more about this event on ETWA’s
website here.
As the energy industry changes, its people must evolve too. At The Energists, we are committed to utilizing the best and most appropriate tools and techniques available to ensure appropriate
risk management is applied to clients’ talent strategies.
Be sure to follow The Energists on LinkedIn to keep up with us and look out for the next installation of our Insights series.