One-third of American workers changed jobs in the past two years, many for better pay. Concurrently, employers were willing to turn a blind eye to new hires and promotions where individuals weren’t ready for the added responsibilities for the sake of supporting dramatic growth, talent retention and acquisition in a scarce labor market.
Facing rising inflation rates, a tumultuous stock market and budget realities, organizations are now forced to examine if those hires were a good match or if they were simply trying to stack their bench of talent. Major U.S. tech companies are already addressing this reality; last year, they slashed more than 140,000 jobs and more than 58,000 tech sector workers were laid off in mass job cuts as of January 27, 2023.
While today’s economic reality is different, steering an organization through times of change can be hazardous and lead to ruin. To avoid the perils, savvy talent management and business leaders must identify talent gaps, find ways to ensure underperformance doesn’t compromise operations and prepare their workforce for a smooth succession.
Identify talent gaps
Talent management plays a crucial role in ensuring an organization is adaptive and flexible enough to meet challenges like the pandemic and resulting Great Resignation – without resorting to massive workforce reductions. Layoffs destroy trust and have a long-term impact on people’s health and finances and studies show most companies that conduct layoffs do not see improved profitability.
To prevent this, it is essential to first note that talent gaps are the most significant hindrance to attaining business goals. Identifying skill gaps and coming up with interventions to address them through training, development or organizational means is essential.
Multiple data sources should be used to assess employees, cross-validate and confirm insights, and ultimately properly identify skill gaps. Get clear on the organization’s core competencies – what value does the business bring to the market? Then consider the full mix of overall key performance indicator trends, employee assessments, 360-degree reviews, top performer benchmarks and first-hand observations to gain the qualitative and quantitative data necessary to determine if the right talent is in place to deliver on that value. Get clear on the value brought to the market and ensure new staff are fully trained and prepared to sit alongside their new colleagues who have accumulated a wealth of experience.
As an example, looking at completion rates of robust onboarding programs among newly hired staff might reveal the readiness to execute the core services of the organization. Organizations that invest in robust onboarding and continuous training improvement programs benefit from sustained results and strong performance.
Informed employees are positioned better to have a positive impact on the company’s bottom line. When the need to fill seats overrides the responsibility of appropriately training new hires, employees often feel used and underappreciated because no one took the time to explain the way things really work.
Ensure underperformance doesn’t compromise operations
Once an organization has identified potential weaknesses, create a plan of action. The key is to build standards of performance and ensure that any strategies are tailored to the specific needs of the business rather than just trying to fill the gap with any available resource.
To quickly prevent operational disruption stemming from the talent bubble, companies should focus on providing training opportunities for existing employees who may be interested in taking on new roles and responsibilities and implement policies that encourage career advancement within the organization. When we see investment in continuous training improvement programs, employees not only feel more valued, but it positions your workforce as a flexible and dynamic team.
When the economy faltered in 2008-2009, organizations were quick to eliminate their training programs as a cost-cutting measure. This is a lesson in what not to do. The actual expense is the lack of talent once you move on from the economic downturn. It is essential not to take the foot off the gas when it comes to growing and developing people. The talent drought that follows can cost far more than the investment in the team relied on to deliver value to your market.
Additionally, employers should consider offering flexible working schemes or attractive benefits packages to attract high-caliber professionals and individuals with critical skills that will help them stay competitive during the talent transition. Invest in training. Get flexible on locations and time zones. Make sure every employee has every opportunity to stay with the company and add value in the areas needed before laying off one set of people while onboarding another.
Prepare for a smooth succession
Finally, preparing the workforce for a smooth succession is important when anticipating a looming talent bubble. Leadership should ask themselves what they are doing right now to grow the next generation of leaders.
Creating career pathing initiatives that will help bridge gaps between generations in terms of knowledge and experience is key in ensuring that the coming generation of staff has access to all the tools they need to succeed in their roles. Additionally, implementing mentoring programs between older and younger staffers helps transfer valuable knowledge while boosting morale among team members and promoting creativity within the organization.
The competition is doing their homework
The time has come to reckon with overzealous hiring, as businesses are now forced to carry themselves through economic headwinds. Savvy leaders understand the competition is doing their homework. They know their core value proposition, are focused on the communities they serve, and are working hard to build adaptive, flexible organizations that can strategize successfully around an impending talent bubble while preparing their workforce for future success. By creating proactive plans and responding promptly when needed, businesses can ensure operations continue smoothly despite transition periods caused by shifts in the labor market.
