Apply a clear mind when contemplating taking evasive action

Evasive action has been the rallying call among many companies during Covid and has been continued during an economic climate that is on a collision course with a global recession.

Austerity means different things to different companies. Many companies apply change management to their cash management systems. Many embark on a campaign to cut costs to the bone. Others double down on the aspects of their business that made them popular in the first place.

Another popular evasive action tactic is putting a hold on hiring. However, I recently read an article by Forbes which discusses the perils of this tactic.

Different Thinking

The Forbes article points out that when the economy gets rough, putting new hiring on ice or reducing headcount are the go-to steps for many organizations. But moving too fast to apply these typical band-aids may create adverse outcomes. Every downturn is different. There’s also a peculiar array of dynamics in the U.S. economy at the moment — from high inflation and rising interest rates to low unemployment and a robust pattern of quitting (outright or quietly) by millions of workers across industries.

Companies that want to navigate economic turbulence successfully may want to keep their eyes forward instead of looking to the past for guidance. If they take the traditional route and significantly reduce the size of their workforce and halt hiring activity until things start to look “better,” they could put themselves at a significant disadvantage. While they sit back, competitors willing to continue making strategic investments in talent may be able to rebound faster in a recovery.

The article adds that, with that scenario in mind, here are three ways that future-forward CFOs can seize the moment to create a more resilient workforce for their finance department and the broader organization, too.

Don’t hesitate to snap up in-demand talent

The article points out that, going into 2023, there were essentially two jobs for every unemployed person in the United States. And data from the Bureau of Labor Statistics shows that unemployment rates for many positions in fields such as accounting and finance are well below the national average. The rate for accountants and auditors, for example, is just 1.7%, according to BLS figures.

So, despite economic uncertainty, many skilled workers still have their pick of job opportunities. It’s also likely these professionals will remain highly desirable hires for many employers if and when a recession officially materializes. That’s why businesses shouldn’t let up on efforts to recruit the skilled workers they really want to hire now — and are confident they will need for the future.

The article adds that an added benefit of remaining engaged in the current hiring market: Many layoffs seen in recent months have been in the technology sector, including from well-known companies with reputations for hiring innovative thinkers. Companies that need to hire tech-savvy talent should be considering whether any professionals from this pool of thousands can find a home in their organization. (An embrace of remote hiring can also help put these professionals within reach.)

Rethink talent models

The Forbes article points out that a study by Mercer found that many CEOs and CFOs view their organization’s current talent model as inadequate in helping the business to overcome talent shortages or increase business agility. Mercer also writes in its survey report: “The sobering realization is that without a radical rethink of talent models, talent — not the global economy — will be the dampening impact in 2023.”

Some of the ways leading businesses are making sure they can access the talent they need, when they need it, is by engaging contingent resources, including contract professionals and managed solutions. They can keep projects moving forward and access specialized skills while they’re hiring, upskilling or reskilling workers. Many firms also find that hiring remote workers keeps them nimble.

The article adds that other companies are getting even more creative, according to Mercer’s research. They’re building “talent marketplaces” that allow them to “mine pools of internal skills and allow talent to migrate fluidly within their organization.” They’re making the best use of their talent at all times by positioning workers where they can be the most effective as business needs change. Also, this approach helps their workers to keep building skills and knowledge so they can become more well-rounded and remain relevant.

Don’t put the brakes on professional development

The article points out that, even if the economy slows down, the pace of technological change won’t — nor will the rate of change that technology drives within business. In the future of work, whether we’re talking about next year or 10 years from now, businesses will need skilled workers to compete, period.

De-prioritizing the upskilling and reskilling of workers in the finance organization and elsewhere in the business, even temporarily for the sake of cost management, could end up weakening the organization in the long term. It will almost certainly undermine the company’s efforts to retain in-demand talent. Research from Gallup found that nearly half (48%) of American workers would switch to a new job if it meant they could access skills training.

The article adds that CFOs and other business leaders should continue investing appropriately in the professional development of top performers, including coaching them, presenting them with opportunities to innovate and putting them in the succession planning pipeline. Providing cost-effective but meaningful learning options for other staff members, such as mentoring arrangements, peer learning and stretch assignments, will also help the business continue to future-proof its workforce, while increasing employee job satisfaction in an economic period that’s unusual, to say the least.

Read the room

Companies need to read the room before making any drastic decisions. Guerrilla warfare is hard to beat because armies employ unconventional tactics to win a war. The same thinking needs to be applied to business.

For example, a company that has put a hold on the hiring process may need to embrace digitalisation to ensure sustainability. Digital skills are unique and are very rarely found among older staff members. Therefore, there may be a need to onboard digitally focused employees equipped with the skills to make a company profitable in an e-commerce-driven environment. Digital-first is a skill set that is in high demand.

You must approach the current challenges differently than you approached existing ones to produce a different outcome.

Phahlani Mkhombo is the MD of Genesis Corporate Solutions and is a Senior Business Rescue Practitioner.