In case you haven’t noticed, the economy has gone to hell.
It’s been up and down like a yo-yo for the last decade, a fact that led Time to declare the first decade of the new century “the decade from hell” in a recent cover story. If you work in talent management or HR, this yo-yo pattern certainly isn’t news to you. Surprisingly enough, it’s times like these that present the best opportunity to become more strategic as more managers open their minds to alternative solutions to improve productivity, save money, and move their organizations forward.
This article is intended to get you to rethink your current talent management strategy and to change it so that it better fits turbulent economic conditions and trends that are most likely to stick around for awhile.
As a professor of management in a college of business, I must remain knowledgeable on economic trends and the strategies organizations can leverage to survive and, in many cases, thrive during various economic situations. While some might argue that a PhD is needed to understand the complexities of the global economy, it doesn’t take a great deal of education to realize that for as long as man has recorded details on trade, there have been oscillating cycles of growth and decline.
If you’ve been around for a while, you might remember the recessions of 1970, 1975, and 1983, followed by growth spurts in 1977 and 1984. Despite blips here and there, the U.S. economy and Western economies in general have grown at a relatively stable rate for some time.
However, if you look at the deviations in growth, you would note that since 1983, the cycles of economic growth and decline have become much shorter and for the most part less severe.
The economy of today is turbulent, and will continue to be for sometime as more and more feedback becomes available in real-time enabling organizations (including governments and corporations) to adjust their economic activities more quickly. Instead of investing in growth for three years and containing costs for four, organizations will more likely find themselves growing for one quarter, contracting for two, growing for three, contracting for one, etc.
Prior to 1983, developing an effective HR strategy wasn’t easy, but economic conditions did allow for making plans three, five, and in some really rare cases 10 years out. There was no need to change the HR or talent management strategy. All you needed was a strategy with three modes: a growth mode, a “freeze” mode, and a layoff mode to match the three corresponding economic cycles. Organizations were much less complex decades ago, often operating in narrowly defined regions and businesses with similar cycles. When economic decline occurred, it hit the entire organization uniformly, meaning that if pay cuts were called for, everyone was impacted. Economic trends have changed, organizations have changed, and how organizations develop talent management strategy must change too.
Economists prefer to label this new turbulent economic environment as a “dynamic economy,” but the old Tom Peters catchphrase, “thriving on chaos,” might be a better description.
No matter what you call it, leaders are beginning to realize that the speed of change is increasing at a breathtaking rate. Products that used to have a lifecycle of five years might now only be viable for a few months. New ideas, products, or benchmark business processes that in the past could be protected for decades, are now copied, stolen, and possibly even rendered obsolete within weeks.
Workers who used to be loyal and want to work at a company for life have been replaced with a new generation that might consider three years at a single firm to be the equivalent of a lifetime commitment.
Some areas of knowledge are doubling in a year, rendering many skilled workers struggling to remain relevant or become obsolete within years of being educated. It may not sound like reality, but if you step back and take all the change around you, you would realize very quickly that the old way of doing talent management no longer fits.
This dynamic business and economic environment has four defining characteristics:
Whenever you’re faced with a situation where the speed of change makes accurate forecasting and planning virtually impossible, there is only one feasible approach that can guarantee success. That approach is known as agility. Agility is a term that has been used by CEOs for years, but it’s now time that we embrace it in talent management and HR.
Agility calls for six major capabilities, including:
In fact, much like playing the carnival game “whack-a-mole,” being agile means more than just moving fast. It means in order to be successful, you must move fast, hit hard, and accurately but also while dealing with lots of uncertainty!
An agile talent management strategy is a strategy that is designed to increase the overall productivity and capabilities of the workforce by rapidly shifting, in a coordinated manner, talent management approaches, tools, and resources in response to the dynamic economy, a changing talent marketplace, and the changing needs of your major business units.
It abandons an emphasis on the one-size-fits-all model in use by many organizations in favor of a one-size-fits-one model. It generally requires a significant increase in the use of contingent workers and alternative labor types. In executing an agile talent management strategy, organizations will need to be prepared to rapidly shift resources between talent management processes including recruiting, retention, development, redeployment and releasing “surplus” talent, as business needs fluctuate.
Next week’s installment will include an example of agile talent management, a list of common elements that comprise an agile talent management strategy, and further discussion of the factors forcing organizations to embrace a more agile approach.
Taleo has graciously sponsored a free webinar featuring Dr. John Sullivan discussing a number of factors related to crafting an agile talent management strategy in an age when talent is gaining power. If interested, check out upcoming air dates and register to attend here.
