How Staffing Has Adapted to Today’s Economic Climate

Although there are a wide variety of different staffing models out there, all of them include the external environment as a core component. This make sense, because events that occur in the external environment (those over which we have no control) often end up having the most profound impact on the entire staffing process. Our present economy is a great example of the impact of the external environment on day-to-day staffing reality. Like it or not, the uncertainty in our economy has created some very difficult times for both job seekers and organizations alike. But despite the pressures of the external environment, the core function of the staffing process ó matching people with jobs ó soldiers on. As the folks on both sides of the staffing equation are painfully aware though, economic pressures have changed the status quo. These changes have pushed all parties involved in the staffing process to think creatively in order to adapt to the pressures of the external environment. This need for innovation and creative thinking is really part of an evolutionary process which is creating the need for employers to either adapt or fall behind. The purpose of this article is to identify and discuss some possible adaptive responses to the pressures our present economy has placed on the staffing process. The 10 adaptations I have identified fall into three broad groups: reactionary responses, tactical responses, and strategic responses. Group 1: Reactionary Responses Adaptations in this category represent short-term responses that are pretty much devoid of any strategic focus. These responses are often based on a need to stop the bleeding. While they may have some short-term value, if handled incorrectly these responses can come back to bite you in the long run:

  1. Bury your head in the sand (i.e., do nothing). Many companies are so befuddled by the difficult and unstable economy that they have reacted by choosing to do nothing. The mentality here is that putting money into a staffing process when there is not much staffing taking place is a poor use of funds. This is possibly the most dangerous adaptation of all because, when things come back on line, the folks in this category are going to find themselves behind the eight ball. The reality is that, even in bad times, some hires are going to have to be made. We are in a buyer’s market when it comes to talent and now is the time to begin building for the future.
  2. Layoffs. While layoffs are often necessary and can offer some immediate short-term relief, their long-term impact can be damaging. We have suffered through a seemingly endless stream of layoffs and RIFs over the past few years. What we are finding is that many jobs with duplicate functions have been consolidated and the extra fat has been boiled away. While this may be good for the company, it has created a situation in which many workers are working much harder for the same amount of compensation. In a tight labor market this works just fine, but once things loosen up you can expect overworked and underpaid workers to take their new skill sets on the road in search of better opportunities. While creating shareholder value or increasing the bottom line may make it hard to avoid a layoff scenario in the short run, companies can help combat an eventual mass exodus with an increased focused on succession planning and the selling of internal mobility to their surviving labor force.

Group 2: Tactical Responses Adaptations in this group represent short-term, focused initiatives that are designed to solve specific problems that have arisen due to the external environment. While these are all legitimate responses, their long-term effectiveness requires that they be an integral part of a more carefully developed vision.

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  1. Reinforce/protect your employment brand. Many companies are responding to the present environment by reinforcing the fact that they represent a great employment option. Part of this strategy may be to help offset the negative impact of slow hiring or layoffs. While continuing to develop an employer brand is important, even in down times, companies choosing this strategy must be careful to “walk the walk.” A strong employer brand linked to a poor candidate experience or crappy careers site represents a complete waste of money.
  2. Education. One of the best and least expensive things that companies can do during times of little activity is to continually educate themselves about the emerging trends related to the staffing process. This is a key ingredient in long-term strategy development and will help to ensure that those responsible for the staffing process will be primed and ready to move forward once a stronger economic need is felt.
  3. Focus on identifying and resolving sore spots. Now is a great time to begin using increased knowledge (see adaptation #4) to pilot test solutions that may be incorporated into longer-term strategic initiatives at a later date. Taking action to identify and eliminate areas of pain associated with the staffing process represents a solid tactical approach. An excellent example would be focusing on increasing sales revenue in a lagging division by using an assessment tool as part of the hiring process. The ROI of this initiative can be clearly demonstrated and the results used to help sell the use of assessment for additional jobs. The real winners will be those organizations who use what they learn from short-term tactical “pilot studies” to develop and justify the cost of longer-term strategic initiatives.

Group 3: Strategic Responses Now we’re talking! Adaptations in this group demonstrate responses that focus on the long run. While they may incorporate responses from groups 1 and 2, they differ in that all activity is focused on creating a staffing process that can be linked directly to the fulfillment of the organization’s strategic goals.

  1. Adopt a value-focused perspective. This means making the effort to create a metrics culture within your staffing organization. This includes working with business units to identify key metrics impacted by staffing decisions and using these metrics to build a business case to support strategic staffing initiatives. Visit www.staffing.org for more ideas related to the use of metrics.
  2. Forecast future needs and develop a system to fulfill them. Part of taking a strategic perspective on staffing is to link staffing processes to long-term forecasting of human capital requirements. One of the ways to do this is to begin identifying the key competencies and values needed for long-term success and to include these as a core part of your staffing process. This mindset is an important part of linking hiring processes to longer-term retention and optimization processes, such as career-pathing and succession planning.
  3. Investigate new technology systems. Don’t be afraid of new technology. While there are always drawbacks to the use of new technology, there are a wide variety of tools that can help to add efficiency and effectiveness at every stage of the staffing process. One of the main benefits of using automated tools is that they offer direct support for strategies that link human assets to the type of forecasting discussed in adaptation #7. Much of this technology applies a supply chain management mentality to the management of human capital. While this treatment of people as inventory may seem cold, it is important to note that these tools are meant to fulfill a decision support role designed to make your HR folks’ jobs easier, not to eliminate them.
  4. Communicate with job seekers. Across the board, this is one of the weakest parts of the staffing process. Companies have not yet locked in on the importance of making a good candidate experience a central part of their staffing strategy. As the labor market loosens up, we will shift from an employer-centered labor market to a job-seeker-centered labor market. While applicants are presently forced to accept poor communication and a weak candidate experience, this will soon change and companies that provide strong candidate experiences will benefit. This is especially true for situations in which candidate communication is integrated into a fully developed technology-driven staffing process.
  5. Take an entirely new perspective on the value of people in your organization. This is the ultimate goal that every organization should be striving for. This type of perspective uses all of the adaptations listed in this section (and more) to create a system that utilizes technology to fulfill a new type of strategy for human capital. This strategy is based on the clear identification of the human assets needed to perform individual jobs and fulfill career paths. Once these core assets are identified, this type of strategy creates a staffing process that is based on attracting, hiring, and retaining people who possess these assets. It also requires the integration of tools that can help measure the relative contribution of these assets to key business outcomes and the creation of mechanisms to feed this information back into the staffing process. Finally, these systems will inventory and track these assets and their development in order to meet forecasted demands related to the fulfillment of long-term organizational strategy.

I hope this article has provided some food for thought regarding the need to adapt in a manner that ensures your organization will be prepared to meet changes in the external environment. It’s important to understand that your future depends upon the adaptations you make today!

Dr. Charles Handler is a thought leader, analyst, and practitioner in the talent assessment and human capital space. Throughout his career Dr. Handler has specialized in developing effective, legally defensible employee selection systems. 

Since 2001 Dr. Handler has served as the president and founder of Rocket-Hire, a vendor neutral consultancy dedicated to creating and driving innovation in talent assessment.  Dr. Handler has helped companies such as Intuit, Wells Fargo, KPMG, Scotia Bank, Hilton Worldwide, and Humana to design, implement, and measure impactful employee selection processes.

Through his prolific writing for media outlets such as ERE.net, his work as a pre-hire assessment analyst for Bersin by Deloitte, and worldwide public speaking, Dr. Handler is a highly visible futurist and evangelist for the talent assessment space. Throughout his career, Dr. Handler has been on the forefront of innovation in the talent assessment space, applying his sound foundation in psychometrics to helping drive innovation in assessments through the use of gaming, social media, big data, and other advanced technologies.

Dr. Handler holds a M.S. and Ph.D. in Industrial/Organizational Psychology from Louisiana State University.

LinkedIn: https://www.linkedin.com/in/drcharleshandler

 

 

 

 

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