CEOs and CHROs began 2023 facing a multitude of exceptional challenges. A weakening economy, a stubbornly tight labor market, persistent inflation, banking instability, war and a new cultural dynamic in which workplace talent is dispersed globally make the job of managing modern workforces exceptionally trying and turbulent.
5 Top Tips To Get Through Turbulent Times
- Offer flexible work arrangements to attract and keep talent.
- Review workforce needs often to help prevent layoffs.
- Challenge employees to identify and nurture top performers.
- Build resilient leadership to help your company thrive.
- Constantly communicate with employees to build trust in your organization.
Navigating these challenges will require an honest, hard look at talent strategy. Those who succeed will be willing to make some hard and sometimes significant changes to emerge from 2023 in a position of strength. Here are seven practical tips for leaders to consider.
Consider Lower-Cost Hubs
Areas like India, Mexico, Spain, and Southeast Asia (Vietnam, Cambodia, etc.) are all investing significantly in building infrastructure to support global business.
Many are offering attractive tax incentives to lure potential employers. A number of these areas possess talent hubs that have been building for a number of decades, where knowledge companies can find quality staff able to complete a number of roles that were previously not viewed as easy to do outside their traditional headquarters.
The move to diversify global talent and supply chains outside of China are also accelerating these plans. Determine what work can be placed into these hubs, redirect hiring efforts to focus there and capture savings to either lower costs or redeploy to ensure you can be competitive in main talent markets.
Embrace Flexibility
Recent reports suggest many CEOs are trying to mandate people back to the office out of a concern for productivity and culture. While having some face-to-face time is important for core staff, reducing your overall office footprint can save significant costs. Those companies with flexible work are more likely to attract talent, keep talent and mitigate accelerating salary inflation.
Additionally, embracing part-time workers, retirees or contractors can help address needs that may not require a 100 percent full-time head, but can be done quite effectively by these types of workers. These workers can often also help identify other areas of efficiency as they bring additional reference points from other companies and can be a way to test out talent you may want to bring on full-time when needs grow or recover.
Regularly Reevaluate Your Workforce Plan
Many companies determine their hiring plan at the beginning of the year and then execute for 12 months, only to reevaluate when they plan for the next fiscal year.
During a turbulent time like this, review headcount plans every quarter and add additional processes to ensure each hire is in line with current needs. The last thing companies want to do is bring on talent only to discover they aren’t needed a few months later.
Plan for the Organization You Will Need
When market forces change, companies need to reevaluate their business strategy, product plans, product market fit, marketing approach and more.
With these strategic reviews, CEOs and CHROs should be integrating talent plans from the beginning, looking at the implications of these shifts on their workforce:
- Do we have the capabilities today to deliver these new products or business plans? When will we need these capabilities?
- Where are the main gaps?
- What is our plan to close these gaps?
- Do parts of our organization now have skills we don’t need? Can staff be retrained for the areas we will grow? How will we do that and what will it cost?
- If not, how can we provide the right solution over time to reduce this portion of our workforce?
- What does this mean for who we consider our talent peers, and as that shifts, how should we change our recruiting approach and recruiting structure?
Emphasize Performance Measurement
Top performers, according to Marc Effron of the Talent Strategy Group, can be anywhere from 50 to 900 percent more effective than your average employee. The best way to identify and quantify your high performers is through a rigorous and challenging goal-setting process. If you don’t have a formal goal setting or OKR process set up for your employees, build one.
If you do, make sure the goals are challenging enough, and that they are focused on the right areas:
- Are they aligned to your go-forward strategy?
- Are they meaningfully contributing toward the associated goals for the year for the company and for their respective departments?
- How are you cascading them and reviewing them?
These are all good questions to ask to help refine your approach. In some cases, this will also involve training your managers to help them identify high performance. Some can confuse potential for performance, and a clear goal-setting process can help better distinguish the two.
To further reinforce your performance-oriented culture, ensure your rewards and recognition processes are properly supporting performance assessment:
- Does your bonus program appropriately differentiate high performers and low performers?
- When you have limited merit or salary increases, how are you identifying who is most important to keep and allocating accordingly?
Establish talent reviews to ensure you have a clear line of sight to the top 10 to 20 percent of employees, and ensure they get the right time and attention from you, the leadership team, and the organization overall.
Train Leadership to Be Resilient
An October 2022 study by McKinsey indicates that organizations rated in the top quartile for resilient behaviors were 50 percent less likely to go bankrupt over the next two years than those in the bottom quartile.
Just like with anything else, building resiliency takes time and dedicated training. Building resilient leaders includes:
- Skill-building in active listening to understand what’s really happening on teams
- Minimizing bureaucracy and unnecessary meetings to make sure people have the time, space and authority to get things done
- Giving employees time to think with meeting-free days and other time-saving tactics
- Ensuring leaders are clear on how decisions should be made by establishing a matrix for who handles higher-risk decisions (and how), and empowering less risky decisions to be made quickly at lower levels
- Teaching leaders about self-sufficiency and self-care so they can de-stress, be as effective as possible and instill that behavior in their teams
Build adaptable leaders with self-sufficient teams that can shift in an agile manner as business circumstances change.
Build Trust and Dedication
Only 32 percent of employees “trust senior leaders at my organization to do what is right” and only 46 percent trust their direct manager, according to a recent study of nearly 14,000 leaders by global consultancy DDI. That’s an astounding trust gap.
The best way to close that gap is through constant communication. Consider providing regular business updates on strategy, plans and progress. Hearing from the top is important. A regular monthly session with the CEO or other senior leaders to provide updates, ask questions and celebrate success can all help. Address existing problems and the plans to fix them.
Use more modern communication methods: live presentations on Zoom so more employees can attend and original short-form video clips with updates from leaders on new programs (similar to what you would see on social media). These methods make updates to your organization more consumable, which will increase their reach.
The next 12 to 18 months are likely to remain dynamic and full of risk. To emerge in a position of strength, companies must take proactive steps to build the right organization with capabilities needed for their future, have a resilient and agile leadership team, and communicate clearly, regularly and transparently.
