Most modern professionals would have heard the term VUCA by now. Although VUCA is still used as a convenient “shorthand” for the general trend of modern work, very few systematic studies have been carried out on the VUCA phenomenon.
Today, most researchers, practitioners, and professionals express that VUCA is a permanent phenomenon and its impact will increase day by day. Nonetheless, let us take a look at what the acronym refers to:
- Volatile
- Uncertain
- Complex, and
- Ambiguous
But what are the implications of working within a VUCA world, and more specifically, what can we learn from talent assessments, a practice that has amassed more than 100 years’ worth of scientific data on human capabilities?
The VUCA world: A closer look
To fully appreciate the relevance of talent assessments to a VUCA world, we first need to take a closer look at what exactly the constituent elements of the acronym represent, as well as the challenges they pose to professionals.
Starting with volatility, teams, and individuals will have to deal with increasing instability and unexpected events, taxing their capacities to deal effectively with pressure, demands, and stress. An example is fluctuating prices brought on by up-stream climate change and natural disasters.
Next, uncertainty refers to an increased lack of information about environmental, competitors, and other critical factors, brought on by rapid technological advancement, among other things. An example is experiencing disruption in business projections because of unexpected competitor innovations.
With complexity, modern workers will increasingly face potentially overwhelming volumes of information, interconnected variables, and complexities that will place high demands on their internal, problem-solving resources.
An example is dealing with a business problem that references different national regulatory environments, tariffs, cultural values, and local SOPs.
Finally, ambiguity references the increasing number of “unknown unknowns” modern professionals are likely to face. This lack of clear causal data can prove to be disconcerting to those who demand certainty and stability.
An example is responding to the pressure of launching in unknown or immature markets without knowing all the facts.
When looking at the above VUCA factors, organizations need to respond on two different levels to such challenges:
- The operational-strategic level. On this level, business decisions, strategies and operational innovations can all play a role in mitigating the threats that VUCA factors represent. For instance, to mitigate volatility a company may elect to stockpile inventory, or overbuy talent. To mitigate the threats posed by uncertainty, a team may decide to invest in adding information analysis networks to its SOPs, or to enhance its learning effectiveness.
- The personal-talent level. The best-laid plans and strategies are vulnerable to failure if the right people are not there to implement them. At the personal-talent level, companies will have to ensure that they have talented employees on board who are able to absorb the impact of a VUCA world and keep on functioning despite its many challenges. This must include not only maintaining business-as-usual but thriving in a VUCA reality.
The evolution of objective talent assessments (and the decline of subjective talent judgments)
It might seem somewhat counterintuitive that a venerable practice like psychometric science and the assessments that it created would have a critical role to play in a VUCA world.
Surely measurements of such “old-fashioned” constructs such as problem-solving, conscientiousness, and reasoning do not have much to contribute in such an ever- and fast-changing world?
Let us examine this concern more closely.
For one, the world of psychometric assessments has developed in sophistication a great deal since its humble roots in the late 30s. And even then, it contributed significantly to the Allies, especially the American Military’s ultimate successes in the Second World War.
In the last 100 years, talent assessments have matured to incorporate adaptive technologies, mobile devices, Artificial Intelligence, and increasingly sophisticated statistical analyses of human behavior and performance.
Indeed, the old categories of “IQ” and “Personality” have been expanded on, revised, and some cases abandoned to make way for ever-more nuanced understandings of the various cognitive and behavioural capacities required to perform well in the modern workplace[1].
In contrast, modern psychological science has described a multitude of cognitive biases and similar effects that reveal subjective judgments of talent to be highly dubious:
- Dealing with self-assessed competence, the eponymous Dunning-Kruger effect, named for the psychologists who first observed it experimentally, suggests that individuals are mostly unable to accurately assess their own level of competence, often overestimating their abilities[2].
- The subjective judgments of talent by managers have been shown to be highly flawed. For instance, a multitude of studies and meta-analyses have illustrated that irrespective of industry job type and manager experience, subjective judgments of talent are consistently outperformed by even the simplest of objective criteria or decision-rules by as much as 50%[3]
Unlocking the talent puzzle: Why assessments are vital
When it comes to the personal-talent level of responding to VUCA, the question most on the minds of managers and business leaders is (or should be) this:
- How can I ensure that I have the right talent onboard to succeed at my goals in the VUCA world?
This is not a trivial question. When it comes to recruitment practices, most large-scale reviews reveal that companies are behind the times[4]. Few have evolved past the interview-and-hope-for-the-best strategies that their parents and grandparents employed when they were working.
By ignoring advances made in the scientific understanding and measurement of human capacities, such business leaders walk a potentially dangerous path that can only lead to grave problems down-stream in a VUCA reality.
In response, many organizations across the globe have begun to adopt more objective and scientifically credible assessment approaches to source, select, and develop the right talent. To this point, a recent global survey of talent practices conducted by Aon, using data gained from multiple sectors and more than 48 million assessments[5], shows the following key trends in the use of assessments:
- An increase of more than 85% in assessments world-wide used in talent selection and development
- Increases in gender and ethnic diversity in the workplace as a direct result of using more objective, scientific assessments
- A doubling in the use of AI-supported assessments like one-way video interviewing over the last 3 years
- Rapid expansion of measurement of future skills such as agility, learnability, digital readiness, and curiosity among Forbes 500 companies and other top employers.
Therefore, companies that want to thrive in a VUCA world need to heed the fundamental contributions that talent assessments make to our understanding of human performance and job success. This is the topic that we now turn to.
What to measure: General and specific predictors of talent
Given both the inaccuracies of subjective talent judgments as well as the increasing need to assess for talented employees in the VUCA world, it is important to understand both general (i.e. universal) and specific factors that may influence any given employee’s performance at work.
Universal predictors
By “universal predictors”, we mean factors that have the following characteristics when predicting job performance:
- Robust across time: Indeed, the universal predictors of talent and positive job performance seem to remain stable across time, having been observed in one form or another, since the advent of objective testing of human capacities.
- Universal across industry and job type: Universal predictors of job performance seem to predict job performance across a wide range of industries, job types, and levels.
Universal predictors of job performance are best viewed as a fundamental basis for talent, a sort of human “operating system” of capacities and behaviours that are the minimum requirements for being an effective worker.
These predictors of job performance are well known to psychological scientists, and various meta-analytical studies, which combine hundreds of individual studies across time, have shown the following trends:
- General Mental Ability (GMA), as measured by standard cognitive aptitude measures, remains one of the strongest, most universal predictors of job performance, achieving correlations of around .65 with job performance across industries and job levels as well as similar predictions of job-related learning[6].
- Integrity and conscientiousness as measured by standard behavioral and personality measures can add substantively to this predictive ratio, increasing it to around .78, and .70 respectively[7].
In terms of measurement devices and tools, the instruments most able to measure universal predictors include objective psychometric assessments of cognitive abilities, personality measures, structured, competency-based interviews, job samples and knowledge tests.
In stark contrast are attributes that are sometimes believed to be indicative of job performance in the popular imagination, but turn out to have only modest relationships with this outcome such as:
- Years of education (.10 correlation with job performance)
- Age (.00 correlation with job performance)
- Job experience (.16 correlation with job performance)
Specific predictors
Once the basis of successful job performance (i.e. universal predictors) is understood and objectively measured, employers can turn to more specific constructs that can answer questions such as:
- To what extent does a prospective employee fit the requirements of a specific job?
- To what extent will a prospective employee be able to adapt to changing demands in a VUCA workplace (e.g. agility, resilience, flexibility)?
- To what extent can a prospective employee develop, grow, and ultimately move to the next level within the organization?
- Does a prospective (or current) employee have the right skills and capacities to adapt to the future workplace and the demands this represents?
Although not always the case in all instances, many organizations utilize universal predictors as a filter for screening out potentially unsuitable employees whereas specific predictors are used to select in the best candidates from a pool of high-potential ones as described by universal predictors.
Measurements that focus on behavioral competencies, such as workplace behavior measures and personality assessments, as well as those that test workplace judgment such as Situational Judgment Tests, are well suited to measuring specific predictors.
In recent years, there have been major advances in the objective measurement of so-called future skills and capacities within psychometric science, with attributes such as agility, learnability, and curiosity leading the way in predicting how future and digitally ready prospective and current employees are likely to be.
Indeed, research on these attributes shows that high scorers on such constructs are likely to be:
- 30% better at continuous improvement
- 25% stronger at problem-solving
- 15% better at managing their own workload while engaging in self-development
- Receive 20% higher job performance ratings from their managers[8]
Conclusion: Facing a VUCA world
From the above discussions, it seems clear that talent assessments not only have much to contribute to our understanding of the shape of talent in the VUCA world, but that as a scientific discipline, it holds to key for organizations to unlock talent potential in ways that traditional, outmoded methods simply cannot.
In summation, using objective, scientifically credible assessments allow organizations to accomplish two key goals within the talent landscape of the future:
- Measuring universal predictors of human performance at work will ensure a solid foundation for attaining and developing high-performance employees, and
- Accurately measuring prospective and current employees’ capacity to behave in ways that are functional, goal-orientated, and in line with VUCA challenges.
Sources
Aon (2021). Closing the Future Skills Gap to Drive Business Success.
Aon (2023). A Guide to Making Better People Decisions with Talent Assessment.
Kausel, E.E, Culbertson, S.S, & Madrid, H.P (2016). Overconfidence in Personnel Selection: When and why unstructured interview information can hurt hiring decisions. Organizational Behavior and Human Decision Processes, 137, 27-44.
Kruger, J., & Dunning, D. (1999). Unskilled and Unaware of It: How Difficulties in Recognizing One’s Own Incompetence Lead to Inflated Self-Assessments. Journal of Personality and Social Psychology, 77 (6): 1121–1134.
Kuncel, N.R, Klieger, D.M, Connelly, B.S, & Ones, D.S (2013). Mechanical versus Clinical Data Combination in Selection and Admissions Decisions: A Meta-Analysis. Journal of Applied Psychology, 98 (6), 1060-1072.
Sackett, P.R., Lievens, F., Van Iddekinge, C.H., & Kuncel, N.R. (2017). Individual Differences and Their Measurement: A Review of 100 Years of Research. Journal of Applied Psychology, 102 (3), 254-273.
Schmidt, F.L., & Hunter, J. E. (1998). The Validity and Utility of Selection Methods in Personnel Psychology: Practical and Theoretical Implications of 85 Years of Research Findings, Psychological Bulletin, 124 (2), 262-274.
Schmidt, F.L., Oh, I.S. & Shaffer, J.A. (2016). The validity and utility of selection methods in personnel psychology: Practical and theoretical implications of 100 years of research findings, Working paper.
[1] Sackett, et al. (2017).
[2] Kruger & Dunning (1999).
[3] Kausel et al. (2016); Kuncel et al. (2013).
[4] Aon (2021).
[5] Aon (2023).
[6] Schmidt, et al. (2016).
[7] Schmidt, et al. (1998, 2016).
[8] Aon (2021).