byDr. John Sullivan
In business, it is becoming more apparent every day that a large-size company is less of an advantage than speed and agility. There are new stories every month about how smaller firms like Facebook, Zynga, Instagram, and Zappos dominate over larger firms in their same space.
The same shift in critical success factors toward speed and agility is also occurring in the areas of talent management and recruiting.
The once-dominant larger and well-known firms are having difficulty competing because they are not simply not agile enough to continually shift and redirect their talent management approach. I have just returned from the always-excellent ATC conference in Australia where the entire conference was focused on agility in talent management. Although Australia is taking leadership in this area, the need for agility in talent management is almost universal around the world. The need for HR to move fast and to adapt is not new, but the speed that the talent marketplace now changes has made agility in talent management an absolute necessity.
The Definition of Agility in Talent Management
Rather than the traditional “one-size-fits-all” HR strategy and budget that remain unchanged all year, an agile talent management approach requires shifting strategies and approaches rapidly and nimbly as often as each quarter to better meet the changing needs of the talent marketplace. Agility requires that when the environment changes, the talent management strategy must shift to handle those changes in the environment. For example, when the unemployment rate goes up significantly, both recruiting and retention become easier (because everyone have fewer job options), so fewer HR resources need to be applied in order to produce the same results.
Agility requires talent management to be scalable, which means talent management leaders must have a plan to handle both a higher and a lower volume of work and to shift their cost structure up or down in order to meet the “new normal.”
Four Groups of Changes to Prepare for
When you are developing an agile talent management strategy, monitor the environment so that you can respond to changes in it. The four major external environmental categories that you must monitor include:
- Changing economic and business factors – which include significant changes in the stock market, interest rates, currency fluctuations, and the unemployment rate.
- Business actions by your competitors – which include their expansion into new products or regions, new corporate leadership, and higher growth rates.
- Changes in the talent marketplace – these can include a shortage of talent, higher salary expectations, lower company loyalty, increased demand for innovators, and new HR technologies.
- Changes in your competitors’ talent management approaches – this includes proactive actions by your competitors including large-scale hiring, hiring freezes, layoffs, high turnover, mergers, and changes in their employer brand image.
Components for Developing an Agile Talent Management Strategy
In addition to monitoring the external environment, there are several other components that are required to build an agile strategy. They include:
- Develop a plan that includes at least three growth modes – to plan for both “up” and “down” growth rates, there should be at least three talent management growth modes, including 1) retrenchment and cost-cutting mode, and 2) Slow-/no-growth mode, and 3) rapid growth/innovation mode.
- Calculate your likely range of growth and shrinkage – look over the last six years of corporate growth rates and identify the maximum, minimum, and average growth rates over that time period. Then calculate the largest range between the maximum and minimum in order to get the maximum range of variation that you need to plan for. If the total variation is for example 30%, you need to have a plan that includes how you will manage with up to 15% growth, a plan for up to 15% retrenchment/cost reduction, as well as a plan for a zero business growth rate.
- Develop the capability of shifting rapidly – work with talent management functions so they become capable of moving fast into the next higher or the next lower new growth mode, right after the environmental factors shift.
- Develop a plan for changing direction – develop a plan that allows you to reverse direction and to skip a growth phase (i.e. from rapid growth directly to cost-cutting), as well as having the capability of having different business units move in multi-directions at the same time.
- Prioritize your services and business units – even with abundant financial resources, staff and leadership limitations may require prioritizing, so that you can focus your efforts where they can have the highest business impact.
- Plan for a well-managed contingent labor component – a critical component of agile talent management is the flexibility to quickly add or release labor capability. Your contingent labor plan should have the capability to meet the likely range of growth and retrenchment spurts.
- Learning/sharing plan – speed, change, and rapid movement require a continuous learning and best-practice-sharing capacity.
- Measure and improve decision making speed – this is necessary because in a fast-changing competitive world, slow decision-making is an agility killer.
- Plan for slack periods – during periods when there is less work to be done in one area, you must have a plan to cross-train workers so that they can be temporarily shifted into alternative jobs.
- Plan for overflow capability – develop a plan for handling a sudden but short-term surge in the workload, so that the spurt of work can be handled by designated overflow employees, contingent workers, and/or outsourcing.
- Develop a backfill plan – to provide immediate replacements if someone in a key position leaves.
- Put agility in the hiring/promotion/leadership criteria – make sure that agility is rewarded by ensuring that it permeates the entire organization.
- Use if-then scenarios – use these agility assessment tools for testing the readiness of your managers for appropriately responding to dramatic environmental changes.
- Develop effective agility metrics – develop agility metrics and use them to monitor your progress, speed, nimbleness, and ROI.
In a world where there is continual rapid and difficult to predict change in the talent marketplace, workforce planning is much harder to do. But this increased difficulty is no reason to reduce your planning effort. Instead, it is more essential that agility planning be done well. So if it is important to understand that you can no longer develop a rigid “one-size for the entire company and the entire year” strategy and plan. Instead, a superior approach is to develop plans with agility, flexibility, and the capability of handling a wide range of upcoming talent management problems and opportunities built into them.