Buckle Up, There's Turbulence Ahead

Advice for CHRO and HR Leaders Managing Talent Functions

Whilst scrolling through The Australian this morning I saw an article titled:

“CEO’s bracing for hiring freezes and layoffs. KPMG Survey”

The survey showed that 78% of CEOs are preparing for a downturn by planning or implementing a hiring freeze. Most, some 64% are currently considering layoffs.

The article stated business confidence has been hit by the pandemic, global inflation, and the Ukraine crisis to name a few factors and there is an expectation that rising interest rates will ultimately hurt consumer confidence in the near term also.

However, the survey also stated CEO’s thought the medium-term outlook was more positive with growth expected to return in the next 3 years.?KPMG’s CEO Andrew Yates commented there is now an expectation among business leaders in Australia that there will be a “short, mild recession” over the next year.

So, if you are a CHRO or HR Leader running a Talent function, particularly Talent Acquisition, what is your move? How will you react to this?

Most Talent functions, particularly Talent Acquisition are still in a state of re-build after a brutal culling experienced in 2020. It has been widely acknowledged that TA teams have been pivotal to business performance in 2022 as they have mobilised to respond to high business growth, peak hiring volumes and incredibly tight labour markets.?

At one point in the last year, TA Professionals were among the most sought-after talent in the labour market with recruiters commanding significant power and driving salaries north, particularly those with digital and tech industry experience. ?It seemed at last business leaders were starting to see the strategic value of the TA function and investment dollars flowed.

TQSolutions has been incredibly active in 2021/2022 supporting major TA and broader Talent Transformation agendas or simply helping with functional re-building activities. Several of our enterprise customers acknowledged they cut too deeply during 2020 and it severely impacted their ability to compete for talent in 2021 / 2022 as business conditions improved.

We have seen firms that took a different approach to ‘culling TA’ in 2020 out-perform competitors in the talent markets this year. They have been able to retain key people/skills and have doubly benefited by being able to attract great talent reassured by the organisation’s approach to the pandemic response.

So, what were some of the learnings and lessons from this past few years CHRO’s and HR Leaders should consider now?

1)????Functions that have been positioned to support both internal mobility and talent acquisition have generally managed the past few years with less disruption and churn.?As external hiring is reduced, internal hiring typically lifts, as does contingent hiring.?Functions that are set up to manage ‘Total Talent’ are strategically more agile and of value to an organisation and this downturn, if it happens, could be the perfect catalyst to move in this direction if you haven’t already.

2)????During 2020 / 2021 several businesses strategically re-deployed TA to other activities in the business as hiring volumes lowered.?Some set up ‘Career Transition’ hubs for displaced workforce supported by ex TA team members. There were also examples of TA people being moved into roles where adjacent skills could be used in operations, customer service or similar. ?When hiring began again, these people were re-assigned to TA duties, and they undoubtedly benefited from this experience, helping with their understanding of the business and the roles they recruit.

3)????Some organisations also used this down time to conduct some much-needed project work or kicked off continuous improvement initiatives that people could never seem to get to.?Service models were redesigned, systems and processes were reviewed and simplified and, in some cases, overhauled with new tools implemented. ?It’s often a lot easier to build the plane when you aren’t piloting it or flying in it!

4)????Functional model flexibility is also key, many of our customers have introduced hybrid delivery teams to help them manage peaks and troughs, whether through augmentation partners or RPO solutions.?Hopefully, those that have introduced such models will be able to scale their operations up and down in response to changing market conditions.?This is one strategy to consider during volatile and unpredictable market conditions.

In short, TQSolutions recommends you assess the impact of the likely downturn on your business and whilst we appreciate some cost control measures may need to be taken, we urge HR Leaders not to move immediately to ‘cull’ mode.

Think about the medium-term growth expectations CEO’s have said is likely and carefully consider your response.?In the short term think hard about what you can mobilise your Talent team to do across your business and operations that will add value in the short and medium term. Equally, speak to the Talent teams themselves about what they think they could or should be doing.

We strongly encourage organisations to start moving towards a world where talent delivery models lean into external hiring, contingent hiring, internal mobility, workforce and career development, employer branding and recruitment marketing.?Only when these functions genuinely support all people attraction, engagement and mobility activities will we get off the hire/fire rollercoaster that we have witnessed time and time again. ?