Your AI talent planning algorithm is common sense

Your talent pool is running dry as you freeze hiring, cut workers and worship at the altar of agentic AI utopia. If not careful, enterprises are going to find themselves in a world of hurt and massive experience gaps. Here's an argument for some common sense and nuance to talent planning in the AI age.

Common sense? Puhleeze, you'll say. But I'll argue that common sense is the only way enterprises will manage through a time where you just don't know what you don't know.

And when it comes to the labor market, no one knows much of anything.

The labor market headlines go like this:

• AI is decimating jobs, especially white-collar gigs.
• The impact of AI is leading to more jobs (that argument was the flavor of the week courtesy of TrueUp data).
• The economy is creating jobs, but only in healthcare, says the Bureau of Labor and Statistics, which will revise whatever it reported a few weeks from now. Never trust those headline numbers and check back for revisions.
• We'll need a new org chart modeled after fever dream from Block CEO Jack Dorsey. A better move is to read Deloitte's take. The bottom line is the org chart will change.

Simply put, no one really knows what's going on (beyond that your friendly neighborhood college grad has trouble finding positions). Constellation Research's Esteban Kolsky, our chief distiller, said the human is the linchpin even in an AI-driven enterprise, but a specific kind of work--the connective work that existed because enterprise architecture was never truly cohesive--will be replaced by agentic AI.

"We know what we need, at a high level, but it does not exist yet. This is similar to when we shifted to personal computers. We didn't need people who knew Word or Excel, we needed people who understand how to work with computers (AI today) and that takes time to train, from elementary school to college. Thus, we're in an intractable problem resolution," said Kolsky.

Here's the problem. Intractable problems don't fit into a neat narrative made for LinkedIn or X or a snappy headline. There is a lot of nuance to consider. Even the run on layoffs doesn't fit into a neat box.

Pick your layoff announcement, check out the SEC filings and you're likely to find that many companies (especially in technology) are going back to 2019 levels after a three-year COVID induced hiring binge. AI is often cited as a reason but the reality is that bloat is another factor. Oracle's recent layoffs are one data point, but you can almost pick any company and find they're merely reversing FOMO hiring. Fun fact: I participated in writing an academic case study on how Meta scaled hiring during COVID. I need to update those teaching notes to document the hiring hangover and reversal.

Why common sense needs to be your algorithm

When it comes to AI and the future of work, the babbling class loves to make up org charts and prognosticate that we'll report to CEO Claude. There may be some truth to that talent planning, but common sense, which is in short supply, is going to be your guide.

Common sense would dictate that enterprises simply can't stop hiring college grads because you need to train and give employees experience. If you follow the mantra that AI is going to replace all entry level work, you're going to have one gaping hole and no one to manage (orchestrate) your company in just a few years. The people with experience will age out. Critical thinking will die and so will your company.

I get that this is the US where nuance doesn't exist. Typically, the US overcorrects in one direction only to overcorrect in the other. Nevertheless, you may want to refrain from following the org chart of your fave tech bro.

Constellation Research CEO R "Ray" Wang walked through the talent issue on our recent BT150 call with CXOs.

"The point that we've been making across the board is expertise is now the commodity, experience isn't And so that leaves us with a very tough challenge," said Wang, who has been talking to global systems integrators and HR leaders to get a read on hiring. Are you getting rid of everyone? Just cutting the middle? Only keeping the top people? Only entry level?

The early read is that there is some commonsense creeping in. Integrators are starting to recruit college grads again because they realize they're quickly going to be in a situation where they won't have people with enough experience. The plan for now is to hire experienced people that can manage newbies and coach them up. Skillsets will change because you'll have to manage human and digital labor.

In Dorsey's view, the org chart will be broken down into individual contributors, directly responsible individuals and player coaches. The system will orchestrate and align and humans will sense, act and be much closer to the work and customer.

Wang said:

"Experience is going to be a lot more important. There's a bunch of experience hires, there's a bunch of digital labor that they manage, and there's a bunch of humans that are going to be building with them, side by side. Does that mean you go from 400,000 people to 100,000 people? Maybe. Do you do it like the next week? No, it's just going to happen over the next three to five years."

What will some of the other folks do? Some are going to run AI exponential companies and are going to be just as successful. "We don't know exactly how it's going to pan out," said Wang.

The biggest issue going forward is figuring out how to give employees experience. Remember that expertise is a commodity. Wang said simulation may play a big role. Think of Star Trek's holodeck. "You need a safe place to fail. You need safe place to simulate. Simulation is very, very important. And so just like when you have oil rig platform safety, right? They do simulations before you get onto an oil platform. In an oil rig, you're going to have to do that for almost every activity, like how to interview, how to actually do a contract negotiation, how to do a job," said Wang. "I think the training is going to be very hands on simulation, more than anything else. Make sure that you're going to pass that tacit knowledge on to someone."

Universities will have to adapt with less focus on teaching stuff that you can find. "You'll have to teach how to build experience and understand things and how to synthesize it. It's critical thinking and connecting dots. In the next five years, we're going to see a new breed of graduate that's not focused on what you've done or what you know but what you can do to actually get things done," said Wang.

Unfortunately, you don't have the luxury of waiting 5 years for a new breed of worker. You need to hire talent, coach them up and muddle through the enterprise of the future with a hefty dose of common sense.