As companies continue to confront a number of ongoing challenges, such as supply chain issues and labor shortages, economists have started to ring the alarm about a possible recession. “Recession risks are high — uncomfortably high — and rising,” says Mark Zandi, chief economist at Moody’s Analytics.
Under such a risk, business leaders need to prepare their organizations to weather the storm.
One aspect of operations they need to be particularly focused on is talent management. As finances get tight, managing workforces becomes more important than ever. During a recession, HR teams are often tasked with maximizing the use of the current workforce so their organizations can still achieve goals even under financial constraints.
This isn’t something that can be done successfully without careful forethought. HR teams must be prepared, proactive, and predictive in planning for the workforce impacts of a recession, writes Cignex’s Ankita Singh.
Two areas that are particularly critical to address as part of a recession-proofing HR strategy are upskilling current talent and succession planning (also see the recent webinar “The New Rules of Succession Planning”).
Succession planning is key to keeping critical positions filled
Although the future can’t be predicted, it can be planned for. In HR, looking to the future in talent management, or succession planning, is important to organizational stability in unpredictable times. Through succession planning, HR teams ensure there is a pipeline of talent to fill critical roles in their companies should someone leave the company.
AI-backed talent intelligence platforms help HR leaders develop those pipelines at scale.
AI drives skills-based succession planning
Succession planning only works when the right people fill the talent pipelines. But who are those people and how can HR prepare them for the future? The short answer is by following the data.
Talent intelligence platforms enable HR to take a data-driven approach to success planning. Technology “can identify potential successors by providing data-driven insights on everything from productivity levels to leadership capabilities,” notes Sarah Gallo, senior editor at Training Industry, Inc.
AI analyzes the potential of all employees by considering data points such as role-based skills, skills adjacencies, and role requirements to gauge how they might fit into future positions. Based on those assessments, the technology can recommend employees who would be able to step into a vacant role.
AI enables succession planning at scale
With technology, organizations can scale their succession planning efforts as needed to cover all critical roles. While it is certainly important to plan for key upper management roles, HR teams need to look past the C-suite in succession planning to all positions that are essential to an organization’s operational success.
“It’s important to take an enterprise-wide approach and look for lynchpin roles at other levels as well,” according to the team at Sigma Assessment Systems.
The sheer volume of such positions can be overwhelming for HR teams that find themselves tasked with finding successors. Again, AI is the solution to this problem. Talent intelligence platforms automate the succession planning process, which means they can show the best person to step into any role at any given point in time.
Upskilling prepares employees for the future
Once successors are identified, they need to be upskilled through learning and development opportunities to take on those future roles. While this can be a significant investment on the part of the company, it’s a necessary one to ensure employees have the skills they need to perform effectively.
“Companies that do practice successful succession planning typically view it as a development process versus a replacement process,” write Todd Hoffman and Stanley Womack in a PwC paper.
This is important during uncertain times because “when critical openings occur, these companies are ready to fill the positions with skilled, experienced internal candidates because they have planned for such a transition – by ensuring that the individuals selected have been exposed to the proper training and career development opportunities,” Hoffman and Womack write.
When developing upskilling programs, what’s important to keep in mind is that upskilling isn’t a one-and-done strategy for learning. It’s a “continuous journey,” explains Eightfold AI Co-CEO & Co-Founder Ashutosh Garg in his presentation at Eightfold’s Cultivate 2022 conference.
AI plays an important part in each step of the upskilling journey
Upskilling is a journey because it’s not enough to occasionally throw some courses at employees and expect them to develop new skills. They need to be constantly learning to keep up with changes. “Upskilling works best when employees experience training as an ongoing effort, not just once or every once in a while,” notes technical writer Kate Brush.
Here are the steps in that journey, according to Garg, and the role of AI in each.
- Understand the market. HR needs to know and understand the important roles and skills in their organizations. AI helps identify the roles and the skills in specific markets.
- Understand your talent needs. Based on the understanding of the market, HR then has to identify the gaps in their organizations and define the roles and skills for each position. AI brings understanding to each role in the company. This is crucial because “if you don’t define the roles correctly you don’t make progress,” says Garg.
- Tap into your talent network. A company’s core asset is its people, and every company has a network that can include customers, current employees, past job candidates, current applicants, contractors, and freelancers. AI brings all of these potential talent pools together in one place.
- Identify the people to upskill. AI enables HR to find the right people in the talent network to upskill for future roles.
- Deliver personalized career plans for each person. “Everyone likes to choose their learning path and that is what makes it most effective,” explains Garg. AI facilitates the creation of those individualized career plans.
“Upskilling is the only strategy,” says Garg, because “what we know today will be out of date soon.” HR must continually upskill their teams to build a more resilient workforce that can help an organization survive volatile times, like a recession.
Invest in upskilling now to build more resilient workforces
Every organization needs to build a workforce now that can adapt to market changes. Workplace, economic, and skills evolutions are happening so quickly that if a company isn’t already investing in upskilling their talent, they are putting their organizations at risk.
Upskilling helps “companies build a richly talented workforce with more grit, resilience, and determination to handle unexpected challenges,” writes PwC partner Suneet Dua. “That means cultivating an ability to solve unexpected challenges creatively and quickly.”
And while it may seem financially challenging to implement ongoing, company-wide upskilling programs, HR leaders need to keep in mind that job candidates and employees also recognize the value of upskilling to their careers. More than one-third of respondents to a PwC survey on the future of recruiting said they would be willing to take a pay cut in exchange for upskilling opportunities. This may give HR teams some flexibility as they strategize options for sustainable upskilling.
Preparation is key to longevity. Organizations must embrace succession planning to future-proof themselves in the face of economic uncertainty and constant change. AI-backed talent intelligence platforms like Eightfold are essential to this planning, says Garg, because it’s “critical to have unbiased learning, learning at scale, deep understanding of every role, every function, and every skill” to effectively manage talent.
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