Financial struggles due to COVID-19 have left many companies insecure about their futures. Heightened financial uncertainty has businesses of all sizes struggling to strategically plan for the long term.
Company leaders are asking themselves, “Do I plan for leaner times, greater growth, or both?”
The answers to these questions directly impact workforce planning. Even when finances are strained and the path forward is unclear, it’s essential to conduct adequate strategic workforce planning for the future you anticipate.
“As organizations recover from the effects of the pandemic, many will reimagine key aspects of their business models,” writes Jackie Wiles at Gartner. “The imperative for HR leaders is to identify where and what the impact will be for their organization’s talent and skill needs.”
Under the pressure of financial uncertainty, this may require some creativity in your strategic workforce planning. Here are some ideas and best practices from experienced executives and HR professionals.
Redeploy employees to save money and fill talent gaps
Repurposing staff has been a common approach for mitigating the financial impact of necessary workforce changes and ensuring companies have enough talent in the right places to keep the business moving forward. Essentially, redeploying is pulling from existing human capital resources to fill talent gaps that may not necessarily align with an employee’s primary skill set.
It is a very effective strategy that not only helps to contain costs, but also to highlight employee skill sets that may have been previously unknown, says Bob Kissane, chairman of CCS Fundraising. He points to some large medical centers in New York that have pulled administrative personnel to work in direct stewardship and donor engagement. In doing so, they filled talent gaps without having to incur the expenses of recruiting, hiring, and onboarding new employees. Repurposing also helps to prevent furloughs and layoffs because employees can serve multiple roles.
Another approach employers are taking is borrowing and lending employees. Jeff Hoffman, chairman and CEO of Driving Force Enterprises, shares an example of a technology company that loaned its design and marketing teams to healthcare companies to help convey public health information. Both sides benefited from this arrangement — the healthcare companies got the work they needed done without having to bring on additional staff and the technology company had work for employees in lean times.
Either of these approaches to redeploying employees can help companies stay productive while containing costs during uncertain economic times.
Reskill and upskill employees
Repurposing is a good short-term solution to staffing issues caused by financial constraints in uncertain economic climates. As part of a long-term solution, consider reskilling and upskilling workers for work in their own role and others within the company. Doing so is not only prudent for workforce planning, but may also be a matter of survival.
As McKinsey partners Sapana Agrawal, Aaron De Smet, Sebastian Lacroix, and Angelika Reich write: “Companies can’t be resilient if their workforces aren’t.”
According to research by industry analyst Josh Bersin, hiring from outside a company can cost as much as six times more than hiring from within. At a time when there is so much uncertainty around financial stability, having to hire new employees can be trouble for companies who find themselves with talent gaps that must be filled. That’s why reskilling your current workforce can be crucial.
“By extracting the skill sets you need from the person you think might have them, all of a sudden there are many other ways of obtaining the capabilities you need to grow,” says Beth Steinburg, VP of People and Talent at fintech company Chime. Not only does this keep your workforce “flexible and lean,” says Steinburg, but it is also a “retention mechanism,” both of which can help keep costs contained. Reskilling and upskilling current employees helps ensure you survive lean and uncertain times.
Scenario planning encourages agility in workforce planning
In a post-COVID workplace, scenario planning in HR is more critical than ever.
One universal lesson from the pandemic is that all organizations need to be flexible and agile. This is true for every aspect of a business, including HR. Companies must be adaptable in their workforce planning and development. Key to that is scenario planning.
Scenario planning involves creating various hypothetical workforce futures. These serve as contingency plans that can be quickly followed if those scenarios manifest. Participating in this aspect of workforce planning ensures an organization is as prepared as possible for future curveballs.
Planning for potential scenarios helps organizations “better anticipate and adapt to dramatic shifts we may see ahead and help our organizations turn uncertainty into advantage,” write Scott A. Snyder, Eric Skoritowski, Jarrad Roeder, and Alex Libson in an opinion piece at Wharton. Applied to HR, this helps the organization prepare for workforce changes that accompany greater organizational changes.
What’s important to remember about scenario planning is that you don’t set it and forget it. Doing it right requires continuous planning. “As the landscape is continuously evolving, it is important to revisit the scenario plans as they may need to be recalibrated,” write Jim Pickett, Michael Clarke, and Nicole Patterson at Deloitte Tax.
In its workbook on workforce strategies, Deloitte suggests HR departments ask themselves a number of questions as they move through the three phases of scenario planning in HR: respond, recover, thrive. These include:
- “Are we adequately integrating our financial plans with our workforce plans?”
- “What are we doing to ensure our scenarios are agile?”
- “How are we thinking about our workforce in a way that provides us with the greatest flexibility, sustainability and resilience?”
The answers to these and other questions will help organizations continuously evolve in their workforce scenario planning.
Communicate with employees to establish trust and security
While these uncertain times have been difficult on business leaders, they have been especially stressful for employees worried about job security. This anxiety can push them to look for more stable opportunities elsewhere. If they choose to leave, you now have a talent gap to fill at a time when you are trying to contain costs.
That’s why regularly communicating with employees about what is going on with the company is so important. Your survival in the hardest of times depends upon it. Transparency in communication helps build trust between the organization and its workers.
Rebecca Homkes, high-growth strategy specialist and lecturer at London Business School, says the communication should focus on “wellbeing and updates” and be shared by both HR leaders and company executives.
Openly communicating how and why certain decisions are being made can give employees a sense of security which may translate into a willingness to stay with the company and even serve in different roles. This can be extremely helpful as you plan your workforce for the near and long-term future.
Use people analytics
Every decision matters, especially when financial security is at risk. That’s why using people analytics in workforce planning is essential. Data must drive every decision made during uncertain times in order to minimize risk. That data gleaned from people analytics can inform workforce planning decisions.
Serena Huang, global head of people analytics at the Kraft Heinz Co., says the pandemic has given HR the opportunity to ensure business continuity through strong workforce planning. She explains that analytics has been a key part of the ability of HR teams to do that, allowing them to “make more informed decisions faster and at scale.”
Workforce data also reduces workforce-related costs by taking the guesswork out of HR decisions. When finances are strained, you don’t want to rely on intuition to make important decisions that can turn into costly mistakes. That’s why human resources departments and the data insights they possess have become important to resource planning discussions.
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