Economic uncertainty can drive pressure on business leaders to compromise their priorities. HR leaders must work to keep talent needs front and center.
The uncertainty that pervades business today doesn’t just relate to macroeconomic conditions, although threats such as recession obviously loom large in the minds of many. Uncertainty also stems from any number of strategic, operational or other microeconomic changes — including reorganizations, mergers, and acquisitions, or the sudden appearance of a new competitor from outside your industry.
No matter the reason, HR leaders must continue to attract, develop and retain the critical talent needed to drive sustained business performance. Only now, they are required to do so amid the short-term demands that arise when conditions aren’t entirely positive or stable.
“You have to be creative and always come up with ideas on how to work efficiently without compromising on talent,” a vice president of talent and organizational management told a group of HR leaders recently assembled by me and my Gartner colleagues.
We came together to discuss how to best manage organizational talent needs during uncertain economic times. All agreed that despite such challenges, progressive leaders commit to their talent strategies even while driving short-term efficiencies. Below are a few key ways to do so, as identified by your fellow HR leaders.
4 Ways to Stay Strategic on Talent
- Establish people as your organization’s biggest and best investment. For most companies, people are their biggest investment throughout the economic business cycle, making payroll vulnerable to cost-cutting during times of uncertainty. Progressive talent leaders work constantly with the business to align their strategies and goals with changing business environments and to demonstrate the role of talent as a critical driver of innovation and growth.
- Embrace cost optimization. The Gartner 2019 Global Labor Market Survey of 10,035 managers and employees showed that active cost-cutting, or plans to cut costs, are prevalent in more than 50% of organizations. The key is to avoid reactive cost-cutting decisions, and instead to be proactive about cost optimization — the continuous discipline of prioritizing initiatives based on their benefits and risks, not just their costs. Progressive leaders find ways to retain their talent while saving costs — for example by reprioritizing services or using technology more efficiently.
- Align stakeholders on resource priorities. To optimize costs effectively, stakeholders must be aligned on the priorities for allocating resources. Our survey showed the top two barriers to successful cost optimization are leaders failing to understand how work really gets done and employees resisting the cost-saving efforts. Progressive HR leaders play a key role in driving consensus and managing tension and conflict among stakeholders. For example, managers, labor unions or employees may have opposing views about where and how to save costs. HR leaders also need to make sure cost optimization initiatives are implemented and articulated in a way that protects employee engagement and the employment value proposition — and doesn’t trigger employee attrition.
- Adapt policies and guidelines to changing times. While it’s difficult to navigate uncertain times, make potentially tough trade-offs and build consensus about resource priorities, progressive leaders use periods of uncertainty as an opportunity. They realign global policies and guidelines, redesign major learning and development programs and generally guide their function to support the organization in driving innovation and growth. They also prepare employees for frequent change and support managers and employees in overcoming entrenched but counterproductive mindsets and ways of working.
Use these strategies for more improved, efficient and proactive talent management that doesn’t require you to make unnecessary, and potentially harmful, compromises even in the face of unexpected change and uncertainty.
Matthias Graf, senior director, analyst and part of the HR Cost and Operations team, wrote this article, which can also be found here.
The views and opinions expressed in this article are those of the author and do not necessarily reflect those of HR&DigitalTrends.