July 16, 2020
July 16, 2020
Contributor: Scott Engler
TalentNeuron™ expert Scott Engler explains the value of labor market data in managing people-related costs — in all phases of your COVID-19 pandemic response.
We are in a humanitarian crisis affecting everyone on the planet, one that requires us to focus on social distancing and safeguarding our health, families and communities. So it’s hard — and may even seem insensitive — to be planning our workforce needs, but HR leaders must be prepared to make decisions that will potentially be life-altering for employees and could change the trajectory of their organization.
If economies stay closed, some of the hardest decisions for leaders still lie ahead, and yet most leaders lack the data they need to make informed decisions about their workforce.
For many HR leaders, any talent strategy they had before the crisis is no longer relevant, so what comes next amid constrained budgets and unknown business performance?
Watch webinar: Reengineer Workforce Planning for Cost Savings and Transformation
Even before this crisis, CFOs told Gartner that their cost-structure problems were essentially people problems. Two out of their top three cost-structure concerns related directly to talent:
In short, the location of and competition for talent, and especially for certain skills, inflates costs and constrains overall productivity for organizations everywhere. And that was before COVID-19 upended the whole productivity equation.
Read more: HR Under Pressure to Cut Costs? Know How to Protect What’s Important
To untangle this vicious cycle of costs, TalentNeuron has long posited that HR leaders must be able to disaggregate their “talent” needs into skill needs — so they can proactively and efficiently pursue skills that are critical to business needs and performance.
The head of talent management at one financial institution summed up the challenge recently, telling me: “When we looked at our labor force through the skills lens, we found that we had two-thirds of our skills wrong. We were headed for disaster.”
As organizations move through the phases of the current coronavirus crisis — from the initial immediacy through midterm sustenance and eventual recovery — the skills-based approach provides a more rigorous and cost-effective way to identify, locate, employ and compete for critical hires you might otherwise overlook, and who might otherwise be underemployed.
HR leaders are on the frontlines, marshalling business heads to make smart, cost-efficient workforce decisions so the organization can weather the current storm, sustain through the crisis and eventually recover. But what ammunition do they have?
To me, their most powerful weapon is labor market analytics. And here’s how to use them.
You can’t keep hiring and building skills to execute last year’s plans; focus on skills that set your organization up for success for the long haul, even during high levels of volatility.
It is highly cost-effective to upskill and redeploy talent you already have. To do that effectively, and avoid costly and unnecessary layoffs, first use labor-market analytics to:
Learn more: Do More With Data to Close Critical Skill Gaps
Whether you are looking at the costs of your existing locations or considering others (for relocation or expansion), labor market intelligence can save you millions in the short term and ensure your survival in the long term.
Leverage location intelligence to:
The pandemic is changing the global playing field for talent. Many organizations have imposed hiring freezes; some are still hiring for pivotal roles, and some have gone on the offensive and stepped up hiring. A few are taking a long-term view and recategorizing the skills they deem critical.
Whether you are hiring now or want to be prepared for the recovery phase — when you will want to protect your own critical talent from being poached or you may be hiring — you can use competitive intelligence to:
I know everyone is under pressure right now, and it is natural to second-guess ourselves or be struck by decision paralysis. Labor market insights will help you tackle complex decisions and avoid costly errors. Don’t go it alone without them.
Scott Engler is VP, Advisory for CFO/CHRO, Evangelist for TalentNeuron and host of the Talent Angle podcast. Scott works with companies to predict the future of the workforce and help them plan for the capabilities that will give them a competitive advantage as AI, massive skill changes and the gig economy come on line. He also works with CFOs and CHROs on strategy, board relations, talent planning, business performance management, analytics and leadership.
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