The Covid-19 Pandemic, disruptions in the labor market, employee activism and recession fears have made human capital management more complex than in the past. Corporate boards are faced with the challenge of anticipating what their workforce will need to look like in the future. Developing a comprehensive strategy to attract and retain the type of workers needed to maintain their company’s sustainable growth would go a long way to ensuring long term success—especially during a downturn.
The True Cost of Talent
Current economic conditions and recession fears have persuaded numerous companies to announce that they are laying off workers. Other companies are dealing with massive employee resignations. Still other companies complain about shortages of the skilled employees they need. There is a financial cost to laying off employees and a cost to letting positions remain unfilled. Human capital management decisions are gaining importance and board’s responsibility in this area is growing as well.
Since the labor market is experiencing seismic shifts in a number of areas, corporate directors and their management teams must make sure they are prepared to adjust to these changes. Failure to do so will have significant financial consequences and risk a company’s favorable positioning in the market.
Is your board talented enough to devise a workforce strategy that can maintain the current efficiency of your employee base during an anticipated economic downturn or market disruption? Can your board devise a strategy to layoff workers in the short term and be flexible enough to re-hire workers quickly if conditions rebound faster than expected? Can your board devise a strategy to cut costs without gutting the workforce that will be needed to meet financial projections in a few years? These are issues that should be on board agendas this fall.
Workers vs. Employers?
Unfortunately, current conditions have created an environment where workers have often conflicted with employers. Recently we’ve seen efforts to establish unions at Starbucks, Amazon and others. We’ve also seen workers revolt over “work from home” versus “work at the office” policies. And workers have been more willing to publicly pressure companies to act on social issues like climate change and social justice.
Corporate boards might want to reconsider what management’s relationship with its workforce should be. In some industries workers are leaving, so companies might consider working a bit harder to find out why. Beyond that, boards should ask, How is the company communicating with workers? Is there a growth plan for the workforce that accounts for the cost of hiring more workers, salary increases, additional training and office expansion that is in line with company financial projections for the future? What is the strategy for the recruitment and retention of workers and how does it compliment the company business plan? Would management consider surveying workers to find out ways to improve the productivity, safety and satisfaction of employees? Creating more of a partnership with your workforce may become a best practice in the future.
Reimagining The Workforce
Companies are going to have to confront employment challenges over the next year, which may fundamentally change what their workforce looks like today. Corporate boards may want to consider the following as they reimagine the workforce of the future:
• What new skills will be needed to move the company forward and how many employees do we currently have that possess those skills?
• What leadership development and critical skills development programs does the company have that are available to our employee base? How can we create/revamp them?
• How competitive are the company’s salary and benefits when compared to industry competitors? Are there any benefits we can add to make our company more attractive?
• Are there institutions/communities we have overlooked in the past that might offer new recruitment opportunities?
• To what degree is the company willing to be more flexible to employee needs and concerns in order to retain their employment long-term?