We are currently in an economically uncertain period. In a challenging economic climate, businesses need to be agile and able to pivot quickly in order to stay ahead of the competition. One way to do this is by using talent intelligence (TI) to make better decisions about where to allocate your resources. TI can help you identify which areas of your business are most vulnerable in a recession, and give you insights into how to improve performance.
For context broadly there are 4 main different types of recession that are dependent on circumstance, Boom and bust recession (e.g. UK 1991/92), Balance sheet recession (e.g. Global recession of 2008/09 after credit crunch), Depression (1930s, decline in GDP) or Supply-side shock (1970s recession due to higher oil prices). More generally a recession is often characterised by some common themes: the domestic economy experiencing a negative gross domestic product (GDP), rising levels of unemployment, falling retail sales, and contracting measures of income and manufacturing for an extended period of time. With consumer confidence low and the financial markets falling it is now strongly suggested that a new recession could be rolling down the road to us. Within each of these there are challenges and opportunities that effective talent intelligence can help mitigate and exploit.
What talent intelligence can do:
In order to weather a storm like this, organisations need to take a strategic and proactive approach this is not the time to be shy and reserved. This is where talent intelligence comes in.
Talent Intelligence is the augmentation of internal and external people data with the application of technology, science, insights, and intelligence relating to people, skills, jobs, functions, competitors, and geographies to drive and de-risk strategic business decisions.
In other words, talent intelligence helps you to make informed decisions about your talent and business strategy in order to stay ahead of the competition and future-proof your business.
What are the potential opportunities that lie in a recession?
Whilst a recession can seem like all doom and gloom, there are actually some potential opportunities that arise from challenging economic conditions.
1) Cost Reduction: The most obvious of these opportunities is that of cost reduction. In a recession, businesses are under pressure to cut costs and become more efficient. This is where talent intelligence can help. By understanding your talent landscape and identifying areas where you may be overspending, you can make informed decisions about where to cut costs.
Areas that are often ripe for cost-cutting include:
Location: Generally, one of the hottest topics in challenging circumstances is that of right shoring i.e. ensuring you have the right people in the right place from a workload and cost perspective. Looking at traditional low-cost centre options may at first look appealing but the increase in competition in these areas is already driving and will continue to drive talent shortages. In a talent scarce market, it is more important than ever to identify and plug talent gaps, look at competitor movements and growth, and also look at what the alternative next generation of low-cost locations could be.
In addition to location-based cost reduction, talent intelligence can look at organisational design compared to market benchmarks. Where are we overloaded or overstaffed? What are our spans of control and how do these compare to competitors? What mechanisms do they have in place to enable them to be more efficient? How are these perceived by their workforce or the market overall?
2) Talent Marketplace: In the broader talent intelligence / people analytics ecosystem, we also need to look at the internal talent market. How is our talent being used? What are our people saying about how they are managed and their development opportunities? This will help us to identify any potential issues that could lead to an exodus of top talent during tough times.
3) Future Talent: We also need to think about the future talent pipeline. How easy is it for us to attract talent in the current climate? What are our talent pools looking like and how will this change in the future? What are our competitive advantages in the economic situational context? Look to put mechanisms in place to be able to react in a nimble and agile manner to competitor redundancies and layoffs that is still respectful and controlled.
4) Always on Intelligence: This is a huge moment to look to drive competitor Always on Intelligence programs. These are programs that look to continuously monitor and track key competitors and their talent. This means that as they look to pivot as an organisation or if you see early movements that their organisational health is changing you can flag these as early warning threat detections to your leadership. This allows you to make talent decisions that are proactive and not reactive.
5) Market / Industry / Functional Intelligence: What is the market or industry doing? What are key competitors doing? What is the context for the city / state / country / region? What are the areas where your talent is most at risk and what plans do you need to put in place to protect them? In the knowledge worker space, you are now looking at global competition for talent, with that who may be targeting your employee base from a non-traditional competitor set?
6) Talent Intelligence Build Out: If you do not have a talent intelligence capability and your organisation is starting to slow down a little this can be a huge opportunity to put the foundations in place and build out a truly ground-breaking Talent Intelligence capability. This is the time to test those pilot projects, this is the time to start collecting competitor data to see how things change, this is the time to be the eyes and ears of the labour force for your senior leadership
Recession-proofing your talent strategy starts with understanding the talent you have today, and the talent you will need in the future. It’s about making sure you have the right people in the right roles at the right time. And it’s about having a plan for what to do when things inevitably get tough.
Talent intelligence can help you to:
- anticipate talent needs and make sure you have the right people in the right roles at the right time
- identify areas where your talent is most at risk and put plans in place to protect them
- understand which employees are most likely to leave and take proactive steps to keep them engaged
- monitor changes in the external labour market so you can adjust your talent strategies accordingly
- Understand competitor movements to see how they are reacting to the market conditions and what opportunities or threats this offers
In a recession or any time of economic uncertainty, organisations need to be agile and adaptable to survive. Talent intelligence will give you the insights you need to make the right decisions, at the right time, to keep your organisation on track. By taking a talent intelligence approach, organisations can weather any storm and come out the other side stronger than before. So, if you haven’t already, now is the time to invest in your talent intelligence capabilities to give you the data and insights to be able to navigate these turbulent waters.
This article was driven and created as a test using jasper.ai and was originally published on LinkedIn