How Will Covid-19 Impact The Way We Work And How Should The People Function React?
Updated: Jun 9
Change is upon us. The People function should be optimistic, grasp the opportunities this challenge brings and be innovative to maintain its role as a valued Strategic Business Partner and be a critical contributor to the New Order.
For some time, the doom mongers have been predicting over valuations of global stocks and a slowing of the global economy. With the Corvid-19 pandemic showing few signs of abating and global unemployment likely to rise dramatically, forecast predictions of a global slow down now seem inevitable. The combination of the virus and the resultant economic slowdown is likely to have a profound impact on the way we work, some even predicting a speeding up of the onset of a 5th industrial revolution and domination of AI and ML, leading to the inevitable displacement of traditional jobs & work.
In addition to providing many opportunities for individuals and businesses to flourish, for many it will be about survival as they adapt to the new environment. Businesses will be dominated by the finance department and all expenditures will be closely controlled; in the short term this will likely result in the shedding of people costs driven by a survival imperative but for the longer term it is important for the People Function to maintain and sponsor a broader perspective.
This paper is intended to add to the debate of what the change might look like. Here are 11 points, in no particular order, where the function can deliver increased strategic value:
Define capability requirements more accurately: External recruitment can be an effective way of expanding internal capability. But when recruiting to fill job vacancies, adverts often specify ‘degree plus 5 years’ experience’ in a specified industry or environment. In this statement is an implicit assumption this approach will solve an internal capability shortage. What is needed is a more focussed understanding of capability requirements for the future, greater accuracy in forecasting skills gaps and understanding & quantifying skill requirements to support new products, developments and markets.
1) Be clear about what capability you need.
Internalise Training & Development: Budgets will be under threat. Easy short-term savings can be realised by simply cutting external training. But developing capability of internal resources will be of even greater importance. Most organisations develop or expand into new areas by building on an existing capability and therefore have some degree of internal expertise, even if just from recent recruits. What will be required is a determination to tap into this internal knowledge and use it to radically expand internal capability. Internal training using recognised internal experts and charging them with increasing capability through delivery of formal training to increase capability of less skilled or trained staff will become the norm.
2) ‘Grow your own’ will be the new mantra.
Stimulate Coaching & Mentoring as a key enabler: In support of previous points, capable individuals will be required to take on more formal coaching and mentoring. A strong emphasis on coaching & mentoring will become the norm, and individuals who do not have the personal empathy or ability to share knowledge and helps others will have limited appeal to employers.
3) Technical experts lead knowledge transfer.
Re-focus your Talent Acquisition strategy: the emphasis will shift from filling vacancies to sourcing only the highest calibre individuals, those who will deliver step changes to business capability and business performance. Prices Law says’ half of the work is done by the square root of the total number of people who participate in that work’ (see our LinkedIn post of 8th January 2020). For example, if you need 100 coders, then half the work will be done by just 10. External sourcing of the average does not add value to the organisation, a better solution is to recruit just the best (or design out the need!). And if you set out to recruit the best you will need to make sure it is your best coder who makes the technical assessment of the candidate as neither the line manager, nor the recruiter will have the skills necessary to make an effective assessment – too many good people are missed because they fail at the first hurdle for all the wrong reasons.
4) Don’t compromise, recruit only the very best, forget the rest.
Recognise ‘The Organising Concept’: All activities within a business or organisation can be classified as core, service or supply. Core activities are usually those activities on the value chain; this varies from business to business but might include selling, making, distributing, supporting (but some circumstances any one of these activities might be deemed supply and could be contracted out). Service activities provide an internal service to the value chain and supply are activities that can be done by others, more cheaply or effectively, i.e. 3rd parties. Very often a functional activity can be service and supply where transactions can be performed by either internal service resources or external supply services centres. Be very clear where activities fall; invest in the core, optimise quality of service & only invest in service accordingly. And most importantly, be aggressive in converting existing process into transactions (where feasible simplify or get rid of them) and moving these to supply where costs are monitored and vigorously managed.
5) Invest in the core, forensically evaluate the cost benefit of investing in service & supply.
Prioritise Organisation Design: Removing levels of management from the structure will lead to devolved accountability, improved clarity of accountability, improved speed of decision making and improved communication. This removes organisational indigestion and delivers ‘the dynamic organisation’.
6) Delayer to deliver the ‘dynamic’ organisation.
Establish Dual Career paths: Historically in many organisations the way to progress is through ‘promotion’; the trend has been to take good specialists and convert them into poor managers – technical and managerial skills are significantly different. To counter this, recognise dual career paths and celebrate technical expertise.
Further, in a delayered and dynamic organisation both managerial and/or specialist promotion is infrequent. When individuals are ‘promoted’ the promotion should be celebrated widely - accompanied with a recognition of a step change in responsibilities and Reward.
7) Value technical expertise.
Refocus Reward: if you set out to recruit the best you will need to pay them accordingly. The best will often demand and attract wages far outside traditional reward approaches. Partly to accommodate these individuals and partly reflecting an increased focus on cost & equality, the dynamics of reward will change dramatically. For example, the annual ‘review’ between a manager and individual will focus solely on learning & development; performance linkages to base pay increases will disappear; ‘Cost of living’ only awards will become the norm for the vast majority; determination to resolve gender diversity; discretionary pay increases above CoL will be heavily restricted; future recognition of ‘good’, ‘above average’ and ‘excellent’ contribution will be rewarded through increased access to training and development.
8) Get a bigger bang for your buck.
Optimise the People Operating model: Many organisations have embraced innovative operating models involving the business partner concept, centres/communities of excellence, transaction & service centre. The difficulty is in fully embracing the change, making it stick and delivering business value. And within this, the challenge is balancing the different needs and requirements of different generations, the boomers & millennials, while delivering enhanced value to the business through people, by adding value to people.
9) Review & deliver enhanced value through the People Operating Model.
Focus People Metrics on Benefit to the Business: Metrics are critical in measuring the impact of the People function. Metrics will be central in justifying people expenditure & calculating the return on investment in people.
10) Make sure People Metrics reflect value added to the business.
Enhance Employee Engagement: Engaged employees make a difference, they are the beating heart of organisations. Engaged employees interact with customers & stakeholder better and resolve customer and stakeholder issues more effectively. But engagement is a broad subject and includes many different aspects such as pride (of the employer, product, services), respect (being heard and listened to), organisational values ( culture, trust, empathy), regard (happiness, engagement, wellbeing). A good starting point is the quality of conversations between the employee and their managers.
11) Improve customer service through improved employee engagement.
High value staff, such as strategic individuals, i.e. those individuals with strategic skills, doing strategic jobs or delivering step changes in business performance will continue to prosper – this will include those with niche/specialist skillsets, and those with highly valued or sort after qualities such as innovation, inspirational, transformational. The value of these individuals will continue to rise and they will continue to be able to move between organisations with ease. However, for the majority, increases in the standard of living will only come about by significantly improving their skill and capability.
There is no evidence in previous industrial revolutions to support a medium- or longer-term loss of ‘total jobs’ and nor will there be in this next revolution. However, in past revolutions the nature of work and a re-calibration of the skills required did change and they will again change this time around. The pressure to adapt to the new order will require creativity and innovation and the People Function has a critical role in defining and supporting this upcoming transformation.
In my view, the People Function will be successful if it can embrace the forth coming changes.
Human Capital Efficiency,