Talent managers cannot stop the recession, but can they manage its impact? Previous recessions have given us a few bearings that can come in handy this time.
The impact of the Great Recession was so traumatic that no leader would want to address it again. Unemployment in the US touched 10 percent and 8.7 million jobs died immediate deaths. In organizations’ ecosphere, the brunt of this downturn fell on the middle management roles. Brian Kropp, chief of HR research at Gartner says, “During the Great Recession, managers suffered greatly”.
When such turmoil hits, HR and talent managers are so caught up in meeting immediate expectations that they forget to address the most important part of the equation - their own endurance and the organizations’ longevity.
But 2020 need not replay 2008. A lot has changed and a lot can still change.
Digitalization: In 2019, companies spent USD 1.2 trillion on digital transformations. Most organizations have integrated digitalization in their functioning and many others are in the process of doing so.
Remote work has become a norm: Diane Gherson from IBM says 95 percent of IBM’s workers are remote. The list is extending with names like Google, Microsoft, Twitter, and other players adding to it.
Employees’ needs have changed: In research conducted by Gartner, “84% of respondents rated ‘meaning’ as important.” Employees now seek meaning at work and want to create a positive difference around them.
Decision-making is predictable and fact-based: Talent managers are using data science for employee selection, assessing organizational needs, tracking employee engagement, and appraising employee performance. They are equipped to make better decisions.
Agility is a priority: Agile has spread from tech to almost every other function. For talent managers, it is changing how they hire, manage, and develop their people. In a 2017 survey conducted by Deloitte, 79 percent of employees rated agile performance as the highest priority.
An array of employment options is available: Full-time employment is just one form of engagement. Employees can now be engaged on part-time, project, and contractual basis. Many jobs can be outsourced or offshored.
“Only 8 percent of senior leaders say they are ready for a downturn”- Russell Reynolds Associates. This number includes 3 percent CHROs, 7 percent general council, and 5 percent COOs.
The human factor remains unchanged. And the way we address it more so.
While roles are curtailed, the bulk of work is increased to meet the demand. This extra work ultimately trickles down to managers and high performers. They have to work with fewer resources and steer more responsibilities. Aside from added costs, this also results in shifting their much-needed focus from long-term planning to short-term firefighting.
High-potentials are more prone to get discouraged with the shrinking “new opportunities” within the organization. During a downturn, while others slow their job search pursuits, high potentials increase their efforts. Downturns are also ripe poaching opportunities.
How organizations treat their employees leaves a mark on the remaining employees forever. Those who survived the last recession never forgot how their laid-off colleagues were treated.
Gad Levanon, chief economist and head of the Conference Board’s Labor Market Institute, sees two prominent opportunities in a recession. During regular times, organizations do not have time or willingness to “reorganize, to evaluate what types of jobs could be outsourced or offshored,” he says. “At the same time, a recession is — if you have the budget — a good opportunity to pick up some high-quality and cheap talent because many companies are going to cut back significantly on their hiring.”
Overloading of managers and high performers is a short-sighted strategy and needs to be addressed. Often the cost of this extra work is more when performed by managers. Fortunately, unlike 2008, this time it can be better addressed.
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