Talent Finance: A New Consensus and Return-to-Investment
What is Talent Finance?
Talent finance refers to the development and use of public and private instruments for aligning investments in talent development and in managing related downside employment and income risks.
Now Is the Time for a New Approach to Financing Talent
We are in a new economy that competes on talent, yet the talent financing and development systems we rely on were built for a different era and economy. The global pandemic has introduced new urgency and risks that require bold thinking and transformational change. In this dynamic economy, skills and job opportunities are constantly changing and new skills and opportunities are emerging. Amid this change, employers, workers, and government face growing risks in achieving a return on investment in skill development and managing short- and long-term risks associated with employment and income.
The U.S. Chamber of Commerce Foundation and its partners are exploring a new public-private approach to talent finance that is built to address the challenges and requirements of the new economy. Our mission is to promote innovations in public-private talent finance that improves global competitiveness and expands economic opportunity and inclusion in the new economy. The finance innovations we promote will adhere to a set of guiding principles that will focus our efforts in ways that are different from previous public and private investment approaches. Public and private sector financing innovations, combined with access to better data and more robust employer leadership, set the stage for restructuring how we finance and manage the risks in talent development for all relevant stakeholders. Therefore, we need a talent finance approach fit for our time, not one built for past economies and labor markets.
Key Talent Finance Takeaways:
Shifts in employer talent strategies and traditional government-funded supply-side approaches have further separated work and learning and contributed to a growing skills gap.
This skills gap is likely to grow because of the rapidly changing skill needs of employers, shifting employment relationships, and growing lead times and costs in developing talent through traditional government-funded pathways.
Improving signaling and communication between employers and government-funded providers and promoting and strengthening partnerships can only go so far in closing the skills gap.
We now need to change the incentives for employers and government to work together as part of a new public-private approach to talent development that can scale promising employer, private sector, government, and service provider innovations.
We also need to change how we identify, assess, measure, and manage new and changing risks as well as how we provide incentives for employers and government to work together to manage the related employment and income risks of the new economy.
Public and private innovations in talent finance including new approaches for measuring and managing risk will require the expansion and modernization of data and technology systems.
This new public-private approach to talent finance — including risk assessment, measurement, and management — must promote global competitiveness and expand opportunity and improve diversity, equity, and inclusion in the talent marketplace.
Building a Talent Finance Movement
This initiative seeks to do more than simply advance a new framework for organizing the talent finance ecosystem, it also seeks to forge a new consensus and to build a movement. Similar to other Chamber Foundation-led initiatives, this effort will build a broad-based network of public and private partners and stakeholders to explore the paper’s recommendations and, more importantly, take action. We implore you to be part of the change we need, so that together we can promote economic advancement for workers, learners, and employers, while also closing the opportunity gap.