VUCA” After Covid-19, unless it goes on…”

Forecasts and predictions, since first emerged in the last quarter of 2020, were extremely optimistic and wishful thinking again was on the table for Covid-19. However and unfortunately, reality proved just the opposite whilst local illness was incrementally turning into a pandemic as officially declared in the first quarter of 2021 by the World Health Organization (WHO). Such a drastic shift from optimistic perception to pessimistic reality was in fact not only indicating to take out lessons from historical experience as well as but also an enlightened consciousness to be prepared for new “VUCA” (volatility, uncertainty, complexity, ambiguity) To concretize and hypothetically summarize Covid’s potential aftermath affect so called concept “VUCA”, shall we base our main assumptions on two major subjects, talent (employment) and performance management.

The first aftermath effect would be realized in the current currency regime and monetary system of the international structure. Given the fact that Chinese Yuan was also added in IMF’s SDR (special drawing rights) basket and its free convertibility to gold, dollar’s dominance in the world trade and international finance could be challenged.  Furthermore, the development of different types of currency owned by private and public holders in online platforms could also influence the sovereignty of nation state and strength of central banks to manage monetary regimes via direct and indirect impacts on money supply, taxation and interest rates. Turning points in the history usually coincides with substantial changes in the monetary regimes as witnessed at 1873 with Gold Standard System, 1929 turmoil following Great Depression, 1944 Bretton Woods’ dollar based fixed rate monetary regime and 1978 Washington consensus of Neo-Liberalism with the decline of Keynesian approach in the aftermath of oil crisis and highly sticky inflation. In that context, the era of debt crisis and transformation of social-welfare state experienced since mind 1970s came to an end mostly completed its mission. With the fastening impact of pandemic and total increase in the money supply particularly since 2008 financial turbulence, we are entering into a stagflation process with continuous inflation in both goods and services accompanied by frequent leakages in supply besides structural unemployment. In other words, the shifts in currency regime and international monetary structure is a driver for major turning points at which we are not experiencing the fall of floating exchange rate and rise of different types of “currency wars”.  

From a human resources discipline perspective, such a dramatic shift will require a fast and adoptive upskill and reskill of labor to emergent market needs as well as restructuring training and education system of the public to fill talent gap for corporate companies. The rise of self-employed jobs and temporary consultancy will also be integrated HR strategies to give rebirth for unicorns to keep competitive power in the market. It is obvious that most of the jobs will not be turn back and transferring current skills and competency into new market demands is usually costly. Thus, investing in talent with high technical skills and EQ based competency will be substantial for sustainability of HR strategies. Just as currency regime of indebtedness after mind 1970s generated talent war intensified towards the end of 1990s, shift in international monetary system of 2020s (as incrementally started since 2008s) will pave the way of “neo-war for robotic and analytic talent” at the expense of a higher opportunity cost given the fact that unemployment level stay in two digits for a long time. Accordingly, effective talent management will be a priority to manage “uncertainty” and “ambiguity” of the business and markets via enabling scarcity of digital talent with a new set of competency instead of just revising current set of skills.

Perhaps shall we also foresee another impact of Covid in the market through intensive focus on resources? At that point, volatility and complexity parts of the story could be interpreted. Covid profoundly influenced consumption behavior of the individuals (employees) on spendable income and savings. Rethinking of spending approach raised the question of usage of sources and assets in accordance with needs and expectations. For the companies, opportunity cost of any decision on salary, investment, benefits will be recalculated by considering a variety of factors not only for the short run but also in long run as well. As a result, we can expect to increase a dynamic segmentation of compensation packages while taking into account both digital talent supply lack of resources. In that context, the concept of sustainability may also strongly take place in the performance management and business target forms of the companies, which probably not only focus on 1 year’s short term goals b?t rather redefining short term as 3 months instead of 1 year with a particular attention on mid-long run objectives.

Regarding complexity, one can also witness the rising importance of phasing of objectives in a clear and understandable format in order to decrease the unexpected consequences of complex equations. As we mostly experienced in financial collapse of 2008, uncontrollable derivative markets and interdependent financial instruments bring about high loss while increasing the duration of recovery period. Given the fact that human beings rationally prefer stability but behave in an irrational way to earn more and maximize benefits, shall we embrace the total gains of shared targets and collective thinking. Thus, the overall concerns on vulnerability and complexity could be overcome by HR policies on shared rather than individually separated goals and increased participation in decision and action implementation process. That is also a good way to override lack of resources with combining different styles of agile brain where as including digital talents in passion projects and decision-making process.

Thereby, coping with so-called “VUCA” in HR term could actually be possible via creating an anti-thesis (another VUCA) and that is Vision, Understanding, Clarity and Agility.  Establishment of a participative Vision, with clearly communicated company policy and targets and their adoption to changing dynamics with agile teams’ passion will both contribute to a sustainable competitiveness and corporate social responsibility.