EkaLore has been releasing notes on the global enterprise hunt for talent. In this release, the discussion is focused on economic pressures to make rapid, drastic, and possibly irreversible reductions in talent pools. Simply, global enterprises cannot ‘cut cut cut’ to achieve a sustainable talent workforce and efficient labor costs. As previously discussed, the competencies of talent needed across economic, product, and service cycles cannot be acquired and discarded rapidly. Economic pressures can compel actions from enterprises on talent – unfortunately, the best actions are not easy to execute.
Global enterprises have not learned lessons from prior economic cycles to value identifying (recruiting, accessing), developing (investing), retaining (applying), and adapting (allocating) talent. The current global challenges will put a premium on successfully executing each part of the talent management process.
For global enterprises in prior releases, the external pressures on talent (https://bit.ly/3urDJNT ) have been discussed. The actions of global enterprises are performed in the landscape of these pressures and internally generated political and social conflicts.
A clearly understood problem occurs in enterprises where metrics such as “revenue per Full-Time Employee” or “revenue dollars per work effort hour” drive staffing decisions. Staffing decisions result, as distortions occur in talent management, such as lying about work effort hours, using more contractors/outsource, or required quantities of talent. Bad metrics and objectives lead to bad staffing decisions. The key conclusion is simple: in complex enterprises above a ‘small business' it is impossible to ‘cut the talent’ to regain profitability for a long period.
Desirable staff may choose work styles helpful to enterprises. Enterprises can benefit from changes in societal child care, family care (such as elderly relatives), service availability, and transportation. Workers may choose fewer hours where the family costs of all living expenses are actually eased by remote work, shift-cycles, or costs of transportation (energy). Employers may find better productivity and cost efficiencies for some pools of talent with non-traditional work styles.
A second version of the same problem is “cut the wages not the heads” to cut costs back to achieve margin goals. Across-the-board cuts (frequently in civil service or private enterprise) (sequestration in some jurisdictions budget talk) sound good and work badly. In many situations contractual (civil service or union) restrictions apply or will apply, preventing any such tactics. Slowdowns in hiring, allowing transfers not replacement, or giving up ‘empty slots for cutbacks’ rarely have good effects if the talent management process is already effective.
The paradox of bad results when talent management is already effective comes from multiple management practices colliding. Efficient use of talent means less unused talent to reduce. Effective use of talent means less resiliency and surge-capacity when suddenly demanded. A simple example occurs when the most effective workers see large increases in workload in challenging times as there are no other means of performing the business processes. Previously unused/underused countermeasures and process steps (like spending time collecting more cash) increase – not decrease. The recognition by executive management that ‘one cutting rule fits all’ doesn’t work is hard. Better decision-making is demanded to produce better execution.
Enterprises unable to manage talent (whether ‘on time’ waste) face oncoming problems and situations where more people won’t be a good solution. In many simple, or complex, problems/situations having in-house developed talent can lead to preventing a solution (impossible) once the pool of talent is reduced.
Global enterprises are primarily reactive (responding to perceived market demands for present and future) to identify required talent. Access to the talent (by recruiting and developing, or hiring it away from another enterprise) is tilted by local (domestic) societal pressures and legacy practices.
In the USA the popularity and reputation of certain enterprises leads ‘the best and brightest’ to seek out employment opportunities in certain firms (such as SpaceX, Alphabet/Google, Apple, or Moderna). In Japan or France, a cadre of large employees has had attraction and access to multiple generations to the best academic graduates and talents. In China rapid growth of tech enterprises has led to social mobility. In the 21st Century, attractions for talent are international and across societies (EU mobility, immigration/emigration, remote work).
Global enterprises need more than "the best and brightest." Simple demographics and economics dictate workforces of ‘average folk’ at economic wages. The conflict and heartache in challenging times is selecting new workers who displace existing workers. Just as factory/production workers were displaced by knowledge workers at the end of the 20th Century the ‘white collar’ (knowledge workers) in the 21st Century will be displaced.
Global enterprises are changing in industries as varied as Ford Motor (reducing the ‘white collar’ workforce for internal combustion engine cars by 25% while hiring workers for highly automated electric vehicle production), Big Pharma (shifting production globally), global banks (shifting work away from London and New York), and Big Tech (cloud data center dispersal). Each change reflects a shift in employment (and ‘trickle down’ effects on communities) affecting the global enterprise’ reputation and ability to identify and recruit all levels of talent and build talent pools.
The next post continues to talk about the folly of "cutting to profit." You will find it at www.ekalore.com/blog-1.
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