Rebalancing Your People Portfolio
Six actionable steps you should take when developing a winning workforce strategy.
With layoffs and hiring freezes dominating headlines, it would be easy to think the war for talent is over. And if one were to judge talent acquisition trends by past economic downturns, many organizations would shift their hiring strategy.
But this economic environment is different. In the U.S., the Federal Reserve projects the current downturn might cause the unemployment rate to rise from 3.8% to a still-low 4.4% in 2023 and 2024. And in the U.K., unemployment hovers at the lowest level in 50 years.
Despite these challenges, there is still a war for great talent and acquiring the right people with the right skill set to do the job. And it is vital to your firm’s success. According to Forrester’s recent Budget Pulse Survey, most leaders reported they would not decrease spending on talent, with 60% of leaders expecting to increase spending on personnel and 62% expecting to improve external services.
Strategic workforce planning is by no means a new concept. As far back as the 1960s, management thinkers prescribed methods to balance the talent supply and demand equation. And in financial downturns, the topic usually finds renewed interest among the c-suite.
Here are six fundamentals you should consider when building your talent strategy.
1. Strategic Workforce and Talent Planning Should Be an Activity of the Entire C-suite
As of 2020, 80% of all assets in the S&P 500 are intangible. And one of the most important intangible assets of any organization is its people, which is why it is essential that the entire leadership team participates and has a responsibility in the firm’s talent acquisition and workforce planning process- not just human resources.
The leadership team should start with a clear vision of the company’s business strategy over multiple horizons- say six, 12
, and 24 months. While no one has a crystal ball for the future, even a directional view of the organization’s immediate, mid and long-term needs will provide a solid foundation for strategic investments in talent.
2. Identify Critical Talent Segments to Deliver on Your Business Strategy
Once companies are clear on where they want to go, strategic priorities come into focus. To identify your critical talent segment, you should assess three key areas:
- Internal labor market: Identify the emerging trends within your workforce and how these trends will impact your business priorities.
- External labor market: Analyze the external labor market to determine who you should hire and what skill sets you will need to match your business priorities.
- Assess talent needs and prioritize critical roles at the enterprise level: Uncover each business unit’s capability needs to sharpen your recruitment efforts.
3. Invest in Your Workforce Like You Would a Financial Portfolio
As your leadership team makes strategic investments in immediate needs, it’s easy to lose sight of your future vision – and the talent you’ll need to succeed.
To help you avoid this common pitfall, we recommend approaching your workforce planning as you would with your investment portfolio. Consider a 70/20/10 investment framework to ensure you have the talent you need today to drive critical business outcomes and the workforce you need in the future:
- Dedicate 70% of your talent investment to core business needs
- Reserve 20% of talent investment for emerging business opportunities
- Devote 10% of talent investment for future growth opportunities
4. Build a People Analytics Team
A robust people analytics team can help translate the refreshed strategy to the future workforce, even as the hiring picture changes. Consider building a people analytics team (with access to workforce planning tools) who know how to leverage your data to answer critical questions like:
- How many people are needed to execute current plans?
- What skills will our future people need?
- What roles and responsibilities can we outsource?
- What work, if any, should be outsourced or automated?
- What structural changes are required for future initiatives?
5. Invest in a Compelling Employee Value Proposition and Company Culture
There’s no secret to this. People want to work for companies that value them. New graduates stampede toward firms like Alphabet and Apple because they are good employers. That creates a flywheel: They attract and keep the best people, and these gifted workers help them grow faster. And because they grow faster, they can better invest in people, enabling their growth and success.
In addition, a compelling employee value proposition and company culture help you build trust, engagement and performance within your workforce, which is critical when implementing significant change within your organization.
6. Develop Flexible Ways to Deploy Your Talent
New strategies–and new markets–create opportunities for employees to diversify their skill sets. Make it easy for them to do so with formal and informal ways, such as project-based agile squads, partnering models and centers of excellence.
These flexible ways of working will empower your employees to mesh their interests with the needs of the business.
Individual employees will immediately see the benefits, recognizing new avenues of career development. And the organization benefits from a more flexible, multi-talented workforce.
If your organization isn’t yet taking a strategic approach to workforce planning, consider starting with a solid foundation around these six principles. You’ll find that reimagining your workforce strategy with the same passion and innovation as customer-facing aspects of business doesn’t just prepare your organization for your future vision; it will also help ensure you have the right talent to weather current storms.
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