Win the War for Talent with a Game-Changing Strategy
It’s time for leaders to take off their “day job” hats and think about the entire enterprise.
While talent planning may occur with a regular cycle of annual planning, the pandemic knows no dates and this is an important time to revisit your plans and adjust as needed.
The COVID-19 crisis and associated economic impact forced organizations to rethink their back-of-house processes. Take workforce planning. Faced with rapidly declining revenues, many businesses had to furlough workers or implement reduced hours to help manage their labor costs. Companies needed to be as efficient as possible, looking to get the greatest productivity bang for their labor cost buck. The same quest for efficiency also challenged established business processes, causing many to go from 10-step approval processes down to three almost overnight. As the economy picks up the pace again and companies seek to add talent, a huge pool of high potential hires has re-emerged with new priorities. They are seeking new work arrangements for companies whose values align with their own. In short, the last year has only escalated the need for talent that was already in scarce supply.
With vaccinations well underway across the globe, people are optimistically looking ahead to what comes next. For consumers, it may mean taking long-delayed vacations or spending with confidence they couldn’t have over the previous months. Businesses likewise will need to look at the coming months to understand and respond to these shifts in demand. With many hoping to take vacations this summer, United Airlines, for example, recently announced that it will resume pilot recruiting – and made a commitment to do so with a new lens – committing to hiring 50 percent women and people of color candidates
If there were ever a time to be strategic about investments in talent, it’s now. Strategic workforce planning must start from a good foundation.
Strategic workforce planning is by no means a new concept. As far back as the 1960s, management thinkers have prescribed methods to balance the talent supply and demand equation. And in financial downturns, the topic usually finds renewed interest among HR leaders and executives.
As the dust begins to settle and life begins to resume something closer to normality, these three fundamentals will be especially important to build a game-changing talent strategy:
1. Start with a clear vision of the future
If the past year has taught us anything, it’s that the future is unlikely to look like the recent past. It’s looking increasingly likely that the “next normal” will look very different from the pre-COVID world and business planning needs to account for that. Where organizations have not already started to conduct strategic workforce planning in earnest, a common practice is to allocate headcount investments according to last year’s plan, e.g. “IT got an eight percent increase last year, and all those projects are still in-flight, so eight percent sounds about right this year.” While easy to administer, a backward-looking approach is far from strategic.
Forward-looking strategic planning needs to have a clear vision of the company’s business strategy over multiple horizons – say six, 12 and 24 months. While no one has a crystal ball into what 2021 will hold. Even a directional view of the organization’s near, mid and long-term needs will provide a solid foundation for making strategic investments in talent.
2. Focus on capabilities
New people and skills will be a critical part of delivering on that strategic vision. But they’re only part of the equation. Responding to the crisis has forced companies to reimagine business processes (bye-bye, 10-step approvals), adopt new technology like mobile ordering or robotic process automation (RPA) and adapt to distributed teams and ways of working. What the crisis has really done is accelerated digital transformation for most organizations. For many businesses, workforce planning is focused solely on headcount – e.g. “how many new reqs should Marketing get this year?” But any strategy that thinks only about talent in terms of headcount is missing the bigger strategic picture of what the enterprise really needs.
“Any strategy that thinks only about talent in terms of headcount is missing the bigger strategic picture of what the enterprise really needs.”
Strategic workforce planning should first be anchored in the capabilities that will be critical to the company’s strategy. This means considering the talent needed to support those capabilities, but also the processes and tools to deliver them. Thinking holistically about capabilities also allows an explicit discussion on how best to acquire or develop them. For example, if digital service design is an urgent business need, with limited available talent in the market, does it make more sense to hire, partner or outsource for it?
3. Adopt an enterprise mindset
Some of the above capabilities may be tightly coupled to individual functions in the organization. For example – managing technology infrastructure normally resides in the IT department. Managing campaigns is usually the remit of marketing. And that’s fine. But how might we decide which is more important to the company’s enterprise strategy? If it came down to investing headcount in one or the other, how might we choose? In some organizations, this kind of negotiation devolves into horse-trading allocated headcount. Or worse, those tradeoffs are never even discussed.
To navigate these questions effectively, leaders across the organization need to take off their “day job” hat as leaders of a function and focus on the strategic goals of the entire enterprise. Adopting an enterprise mindset will help identify capabilities that will best serve the enterprise as a whole and avoid creating the usual inefficiencies that result from duplicative capabilities scattered across functions. For example, if your company needs to embed more data-driven decision-making in the organization, it might be more efficient and effective to incubate an advanced analytics group serving the enterprise, rather than hire data and analytics talent in each function. But that means leaders have to leave their pride and perceived functional priorities at the door.
Put your organization in a strategic position to manage workforce planning
With so much uncertainty about the future, it can feel hard to be strategic about anything these days. It may even feel like planning for next month counts as “long-term.” But we have a clearer view of 2021 than we did during the typical 2021 planning process and now is a great time to revisit your strategy. It seems unlikely that businesses will want to roll back the many successful business innovations they have pioneered and return to how things were in 2019. More likely, our path to the next normal will be an iterative process. Navigating this environment and enabling your employees to thrive will take a thoughtful approach.
If your organization isn’t yet taking a strategic approach to workforce planning, consider starting with a solid foundation around these three principles. You may find that reimaging back-of-the-house planning processes with the same passion and innovation as customer-facing aspects of business doesn’t just prepare your organization for the next normal; it may help ensure you have the right talent to weather the next disruption.
If you’ve had to reset your workforce assumptions and want to learn how to capture competitive advantage from new talent scenarios then our Organization & Culture experts can help. Get in touch today.