There are three fundamentals for getting your talent strategy right in the new normal.

It’s hard now, but can you remember February of 2020? Things were a little different. In just a few months, the world has changed irrevocably. Frontline workers all wear PPE; our most personal interactions happen over Zoom; and consumer transactions via digital are at an all-time high. Around the globe, organizations have had to adapt quickly – e.g. implementing safety protocols, rolling out mobile ordering and curbside pickups and launching entirely new products and services to keep their value proposition relevant.

That’s just what we can see above the waterline. The current health crisis and associated economic impact is also forcing organizations to rethink back-of-the-house business processes as well. Take workforce planning. Faced with rapidly declining revenues, many businesses have furloughed workers or implemented reduced hours to help manage labor costs. Companies have been forced to be as efficient as possible, looking to get the greatest productivity bang for their labor cost buck. The same quest for efficiency has also challenged established business processes with many 10-step approval processes becoming 3-step processes almost overnight. And the crisis has only escalated the need for talent that was already in scarce supply. As organizations shift to products and services that can be delivered or augmented via digital, demand for product owners and digital experience design professionals has gone from “high” to “astronomical.”

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. In the turmoil of 2020, three fundamentals will be especially important in helping strategic workforce planning go right.

1. Start with a clear vision of the future

If the past few months have 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 8 percent increase last year, and all those projects are still in-flight, so 8 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 organizations, 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.

Strategic workforce planning should first be anchored in the capabilities that will be critical to the company’s strategy. That 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 having to leave their pride and perceived functional priorities at the door.

2021 is just around the corner

With so much uncertainty about the future, it’s can feel hard to be strategic about anything these days. It may even feel like planning for next month counts as “long-term.” But 2021 planning processes are in full swing in many organizations. As the global pandemic continues to unfold, it seems unlikely that businesses will want to roll-back the many successful business innovations they have pioneered and go back to the way things were in 2019. More likely, our path to the next normal will be an iterative process. Hiring freezes may thaw briefly, only to refreeze again as businesses seek to maintain their gains. 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