Economic uncertainty separates winning organisations from losers
Now is the time to give top priority to strategic talent management, because the economic uncertainty provides opportunities for smart organisations to grow, human capital advisors say.
Establish clear goals and rapidly align your workforce to execute the new strategy"In times of rapid change and heightened uncertainty, possibilities for relative gains abound," the report says. "Downturns make the impossible dramatically possible - for you and your competitors. If you know what your company needs to succeed tomorrow, an economic slowdown is the best time to buy or build those assets."
It is particularly challenging to mobilise people when the organisation is distracted by a lack of clarity, the report says.
"Agile" organisations adopt best practices to:
Cut with precision, if you must, but not bluntlyIf layoffs become necessary, the report says, they should be viewed as a chance to optimise the workforce - "weeding out the low performers and letting your best talent grow".
HR managers should avoid the traditional across-the-board cut; this can cut stars and "leaves you with mediocrity". A clear picture of the talent pool is needed before any decisions are made.
The report urges managers to consider:
Focus on your core talent and invest where it countsIn a downturn, the report notes, under-performers stay put while top performers have more opportunities to leave.
Given that high performers contribute disproportionately to the success of a business, it says, it makes sense to make a disproportionate investment in identifying, developing and paying them.
Investment should focus not only on retaining top performers but on filling gaps in skill sets via training and development, "because when your core talent is thriving, you can do more with less".
Be transparent - communicate, communicate, communicateIt is not enough to execute strategies; "you must also make sure that people understand what you're doing and why".
The report says that when key players feel secure, they are much more motivated and engaged. Top performers and opinion setters should specifically be targeted in communication strategies, it says, and people should know the role everybody will play and how they will be rewarded.
Good morale, the report says, "fortunately" doesn't require people to be happy or the market to be booming. "Many of the best examples of high morale come from situations of great unhappiness and stress - such as heroic actions in war."
It is "not your job" to make people feel happy while their friends are being let go, the report says. "Your job is to build your team's focus and dedication. You cannot do so without building trust. And trust, it turns out, pays dividends during and after the turbulence."
Compensate more strategically: Pay only for performanceNow is the time to think about how to make your payroll go further, the report says.
Too many companies make the mistake of spreading the available budget evenly, when they should maximise the effectiveness of their spending by compensating employees for their individual performance.
A pay-for-performance culture helps a company save money by avoiding over-compensation, reducing resources wasted on individuals whose performance doesn't help achieve key business objectives.
The report says managers should know:
Winning Through Talent in Uncertain Times: 5 Strategies to Get Ahead, SuccessFactors, 2008.