Workforce planning is vital during a recession if organisations want to come out on top when the downturn finally ends. Lynda Lewendon outlines the strategies that need to be in place now to weather the storm.
Never have staff levels been under such stringent scrutiny, together with all other overhead costs. We are currently going through a period of unprecedented economic and financial turmoil. As with every other recession, however, it is those organisations that are well managed which will come out on top and be best placed to capitalise on the growth opportunities that present themselves both during the economic downturn (yes, the winners will be looking to take advantage now) and when the upturn eventually comes.
Workforce planning is intrinsic to coping with the tough economic conditions we currently face, both in the short and mid term as well as preparing for the long-term future. It not only involves ensuring that an organisation has the right number of people in the right positions at the right time but also that the right experience and skills sets reside within the organisation, and that the right talent continues to be recruited, developed and retained.
Workforce planning in a recession
Without doubt CEOs and FDs will be looking for extra value from all their resources including their people. HR needs to develop a people management strategy that is closely aligned to the critical organisational needs. At the same time, the strategy needs to be flexible enough to respond rapidly to the inevitable short-term changes necessary in a recession while compromising as little as possible the long-term objectives of the organisation.
As in good economic times, the best way for HR to command respect at the top table is through delivering quality management information that the board can trust and base sound management decisions on. A simple set of metrics needs to be compiled, which reliably measures the efficiency, effectiveness and business impact of people policies. Ideally, this information should be presented in the form of a ‘corporate dashboard’.
Identifying the best staff
It could be said that an organisation’s key staff are not always their best staff when conditions are challenging. The old adage, ‘when the going gets tough, the tough get going’ holds true here. It’s vitally important that organisations have their fingers on the talent pulse and that senior managers have a clear picture of the key skills, knowledge and expertise they will need to draw on to guide them through the downturn and those they will need to take advantage of the upturn when it comes.
Understanding an organisational talent base is critical. Not every organisation knows who their high performers are, and who their key people are. In hard times, the two are not necessarily the same. In a recession, when head count is often reduced, frequently average performers are released in favour of high flyers. Unfortunately, the latter tend to become disengaged and quickly leave at the earliest opportunity when times improve.
Learning and development has a major role to play in a recessionary climate: it can ensure delivery of core skills from within the organisation at a time when you may not be in a position to recruit them externally.
By taking a more strategic approach to learning and development, training budgets can be reduced without detrimentally affecting the people and skills sets required. Therefore, HR needs to differentiate between ‘must-have’ and ‘nice-to-have’ development to optimise learning and development programmes.
To address identified weaknesses, a cost-effective approach is to ‘support and challenge’ whereby, through a range of interventions, employees are encouraged on the job to find within themselves ways for further personal development. This approach is far more tailored to the individual, with its emphasis on on-the-job training, often a preferred method of learning among employees. With coaching support from line managers, support and challenge can be a popular way of engaging and ultimately retaining employees, while avoiding the need to implement more costly formal training programmes. Building a coaching culture can also strengthen knowledge sharing and develop leadership skills.
In anticipation of the upturn, that will inevitably happen despite current ‘doom and gloom’, organisations also need to ensure that they are ready to ride the crest of the wave when the economy improves.
Performance management has a key role to play in developing every employee’s understanding of the changing organisational priorities in the short and medium term by ensuring that these are met. Everyone needs to have a shared understanding of what has to be achieved, and the organisation must provide the framework and the people development opportunities through performance and development reviews, learning and development, coaching, objectives and performance standards plus measurement. As performance management is a continuous process, it should be easy to modify and set clear objectives for individuals and teams, all focused on successful achievement of an organisation’s strategic objectives.
The ‘one size fits all’ approach to reward does not get the best out of people. Far more motivational is a tailored approach and never is this truer than when personal economic circumstances prevail. Now is a good opportunity to review your reward and benefits policy with a view to tailoring it more to particular individual circumstances through offering choices from a range of relevant benefits.
Cost neutral and non pay-related benefits should not be ignored. One area worth investigating is flexible working as this may enable a more productive timetable to be scheduled and an alternative to redundancy.
Where possible, it’s important to resist the urge to freeze recruitment. Instead, plan carefully for short, medium and long-term organisational needs. Maintaining a strong employer brand is also important. A highly visible brand inspires confidence, will be recognised by those looking for opportunities and is more likely to attract better applicants. Certainly, organisations need to ensure that they have a pipeline of talent in the wings for when performance improves so that they can take full advantage of the upturn and not be left behind.
Where redundancies are inevitable due to business circumstances, these should be handled effectively, sympathetically and in accordance with the law. Employees are not stupid and will usually be aware of what is going on within the organisation so its important to treat them with respect and communicate clearly. Informative, timely communication can also help to engage those employees who remain in the business and can be used to allay concerns that they will be next.
For those staff affected by the recession, attempt to provide support mechanisms that will assist them with their own personal circumstances.
Workforce planning involves forecasting the talent that an organisation needs to deliver its short, medium and long-term strategic objectives. In many ways, never is it more critical to get it right than in a recession. Where resources are stretched to the limit, a gap in talent can have a major impact on organisational performance.
Lynda Lewendon is an HR business partner at Ceridian.