Five ways to prepare your workforce for an economic turnaround
Conversations across the media, blogs, and boardrooms are turning toward the inevitable economic turnaround. Forward thinking firms are beginning to consider strategies to handle staffing up when the market improves. Some industries, like high-tech and semiconductors, are expected to see renewed demand first and have been preparing for it all year.
What will the post-recession workforce management look like? I’ve written before about the notion that the very make up of today’s workforce is evolving and unlikely to ever look the same. Gone are the days when an HR manager can evaluate his or her full-time exempt and non-exempt W2s, but not overly concern themselves with any other segment of labor. Now HR execs are forced to carefully evaluate every single element of the talent supply chain, from top to bottom.
The HR execs we talk to have all indicated a desire to be better prepared for the extremes of the market, from an all out war for a minimal pool of talent, to implementing more efficient and cost effective ways to keep the workforce at the best level possible with as few bodies possible. There is an overriding sense that HR was caught a bit flat footed at the start of the global economic downturn, unable to respond until well into the crisis. It was a painful process for many leaders to execute such drastic cost cutting, and make tough, but necessary decisions regarding their workforce that would inevitably hurt their broader corporate strategy.
To help them transition out of this down economy, and at the same time improve talent supply chain efficiencies in a way that advances broader strategic objectives, here are a few pieces of advice:
Evaluate segmentation. Take a close look at how your workforce today is segmented, and then make decisions on how you will ramp staff back up. Can you use a higher percentage of flexible workers? Are there contextual areas of your operations that can be handled with outsourcing and partner strategy? If so, start mapping out an execution plan now that will allow you to source the right skills into the right roles as soon as demand increases.
Refine your recruitment strategy. In order to respond quickly to better market conditions, focus on identifying acceptable time-to-hire and cost-per-hire metrics. Begin with an honest evaluation of what your time-to-hire and cost-per-hire was during large staff increases in the past, and make sure this occasion improves upon those standards. Most importantly, consider the amount of time your hiring managers have been asked to devote to talent acquisition. They should only be involved in 15% or less of the acquisition and on-boarding process. Even 5 points higher than that can result in delays and increased cost-per-hire.
A technology company in the Northeast recently eliminated over 130 contracted recruiters. Forgetting for a moment that they probably violated co-employment regulations, this recruiting force was well paid and provided good results, but was incredibly autonomous and not measured for performance. It is my guess that this firm will never again invest that sort of money in maintaining such a large and expensive recruitment army.
Identify your employment brand. Now is the time for a serious discussion about your employment brand. Most large firms have strict rules about how their employees can communicate with the public in order to maintain their brand’s value. But too frequently those standards don’t translate to the talent acquisition process. If you used third parties to assist with your recruitment, there must be a strategy in place to communicate the right message about your employment brand to the marketplace. And that’s just the bare minimum.
HR managers should also work closely with their marketing and PR colleagues to communicate a clear, strong employment brand through advertising, the press, social media and other vehicles. That way, incoming recruits and job candidates already have an accurate and consistent perception of your company before walking through the door. It is essential that this strategy not just be used in the recruitment of full time staff, but for any laborer recruited into the organization. Too frequently their talent suppliers are not required to adhere to employment brand standards.
Re-evaluate work classifications. This period of time before the turnaround is also a good moment to closely evaluate how project work, consulting and simple statement of work engagements are executed. Ideally, the evaluation should turn up instances where the need is for a finite and easily defined skill set, rather than a specific deliverable. In these cases, there are better, more cost-effective ways to procure the right talent than issuing an RFP that solicits bids against a defined statement of work, and will end up costing you a premium. The goal should be to turn up about 3% to 5% of that type of work, which are better classified as skill requirements.
Don’t lose sight of the basics. Even with an economic turnaround, state revenue improvements will lag behind, leaving states still on the hunt for easy revenue by auditing against 1099 tax code. Companies should immediately take steps to make sure use of independent contractors is well managed so it doesn’t get lost amid summer vacations or the rush to staff up. Too often, once things get going, we forget about some basic housecleaning. It could be a costly mistake to indiscriminately hire independent contractors without well documented policies and procedures. Without a plan, at best you will pay premium prices for them, and at worst you will have serious co-employment risk.