Tag Archives: economic downswing

Business leaders set to win by championing workforce planning!

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Globally, business has experienced significant change over the last few years caused by the economic climate, tight fiscal pressures and continued challenges to fill mission critical roles. It’s been impressive to see business make noteworthy adjustments to operating models to ensure a competitive position within the market place. It has been interesting to note, however, that most organisations have not invested the same focus in shifting human capital operating models.

When you look at the fact that mobility and turnover have decreased at the macro level and retirements have reduced due to the economic climate and the decimation of retirement funds, you can begin to understand why some organisations have not made significant investments in their human capital processes.

BUT… organisations are going to be strong-armed into examining their human capital operating models with recovering market conditions set to double current retirement trends and mobility and turnover significantly increasing. 

The million dollar question at this juncture is: “How can business leaders ensure that their current workforce issues don’t blow up into critical business issues?”

The answer (and I will pocket that million thanks!): workforce planning.  Workforce planning enables business leaders to unpack the anatomy of their workforce, understand key business drivers, implement necessary change to business operating models, and most importantly, align human capital strategies with business strategies.

What are the critical elements for a successful workforce planning process I hear you ask? The workforce planning process must be aligned and integrated with all organisational planning and budgeting processes.

Is everyone committed? Stakeholder engagement is an absolute must to ensure that the process is allocated adequate priority and resources.

Workforce Planning… Is it just a Human Resources initiative? Definitely not! The business needs to adopt workforce planning and have a sense of urgency committing to planning into future years, well beyond this budget cycle. 

Lastly, do we have the skills, capability and experience required to establish and execute on the Workforce Planning process? Resources that are able to initiate and implement all pieces of the Workforce Plan are unique and extremely sought after.  Generally, this is where we see organisations engage expert assistance and seek partners across the business to assist and execute on the planning process.

As talent pools are continually placed under stress, workforce planning at a strategic level will become an essential component of human capital operating models.  Understanding how to position your workforce to obtain the best return on investment will sustain and grow the success of your organisation into the future.

Don’t rest on your laurels, business leaders – it is time to take the bull by the horns and show those environmental factors (such as the economy, labour shortages etc.) who’s boss.

Be Quick or Be Dead

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Aside from being the title of a great song from one of the greatest rock bands ever -Iron Maiden- Be Quick or Be dead is a great metaphor for today’s business environment. No matter how you look at it speed is picking up and someone will take advantage of it at someone else’s expense. Now more than ever with falling valuation of assets, lack of liquidity, and reduced consumer confidence the notion of “survival of the quickest” is the real deal. Darwin famously stated that it is not the strongest but the most adaptable to change that survives, and this is true as true in the business world as it is in nature.

Actually if you think about it, when is the best opportunity to actually go on the offense and make a change? When the going gets tough or when everything is gently pointing upwards? Companies will either be acquired, stripped of assets, or go on the offense to acquire underpriced assets when markets and demand soften up. The real deal then is obviously to make sure you quickly can get your organization aligned and executing on the new company’s direction, and that you drive the calculated synergies of a merger or acquisition home. With people being by far the biggest expense for any given business (on average 70% of operational cost) how you deal with your joined workforce must logically be the most important factor in any M&A situation.

“In any merger or acquisition, investment banks and equity analysts will provide you with a plethora of figures quantifying the synergistic strategic benefits of the union. Yet what determines whether a merger succeeds or fails is really its people.” – Jean-Pierre Garnier, ex-CEO of GlaxoSmithKline

Logically then, companies with better people processes and a serious focus on people performance should do better in a merger. To test this hypothesis, SuccessFactors research examined the performance of ten of our customers that specifically cited challenges resulting from a merger or acquisition as their business drivers for investing in SuccessFactors. The results were clear – the ten companies that leveraged SuccessFactors to drive the merger home completely outperformed their competition in 12 month revenue growth, 12 month income growth, return on equity and price to book ratio. These mergers were not just successful on paper, they worked in the real world.

Download the SuccessFactors Research Data Sheet: Mergers & Acquisitions to see just how successful our customers are and how they are winning in these uncertain economic times.

Economic Downswing: Let’s not make the same mistakes again

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Making mistakes can be a good thing if you learn from them. Making the same mistakes again and again is stupid and costly.

The economy goes in cycles. I know it feels like a long time ago, but do you remember that we had a pretty quick and tough downswing that started in March 2000? 2001 and 2002 felt like a nuclear winter to a lot of people and businesses. I’m not saying that the current situation has the same underlying factors and patterns as the last time that we had this tough economic climate, but businesses and people are to a large extent equally as affected by it as before. Smart companies learned from the mistakes we made the last time the economic cycle entered a downswing and avoid repeating them.

So what did we learn from the last downswing? Some companies really lost and others came out of the economic turmoil even stronger, making real gains relative to the competition. Business, like sports, is very competitive and relative. Making a relative gain is easier when everybody is hurt rather than when all are performing well and happily taking orders serving demand. Furthermore, it was clear that those companies that avoided facing the new situation lost. Inaction is never the solution for advancing down the field. So companies that tried to take advantage of the economic downswing with clear actions won.

Here are some mistakes that losers make to learn from:

  • Losing companies that get caught up in internal reconfiguring and take on an inward focus also tend to forget about their customers need and the value provided to them
  • Losing companies fall for the pressure to cut people across the board when called on to downsize and reduce costs
  • Losing companies alienate talent with poor decisions made through an extreme focus on short-term results; alienation which can last years thereafter.

SuccessFactors Research has recently written the paper Winning Through Talent in Uncertain Times, addressing how companies can get ahead when times are tough. Learn from your competitors’ mistakes, smartly align your resources, and turn an economic downswing into an economic opportunity for your company.