This week I had the privilege of meeting several HR leaders in the US and Europe. I have thereby taken the liberty to write a slightly longer email as there are many points to cover. Some of the global economic metrics that are emerging are worrisome. There is heightened sensitivity around economic and financial news across the globe. For example, The International Monetary Fund expects to cut its forecast for global economic growth in 2022 next month, an IMF spokesperson said on Thursday, following moves by the World Bank and Organization for Economic Co-operation and Development (OECD) to cut their forecasts this week. Such metrics can make us worry a bit even if we do not fully understand the variables that truly make up such models.
The leaders I met about the HR operating plans mentioned one central theme. We should not panic and make decisions that will have a negative long-term impact. In his recent book Moonshot, Pfizer CEO Dr. Albert Bourla uses the following as an opening quote.
“What matters is not what happens to you, but how you react to it” – Epictetus, AD 50-135. The book Moonshot is a good narration of what Pfizer experienced in building the Covid-19 vaccine.
History has many stories around panic-driven misplaced talent strategies
- AT&T developed a reasonably good IPTV in its early days. In 2008, U-verse availability approached 8 million households, and new installations reached 12,000 per week. But lack of proper workforce planning meant that AT&T did not develop and hire enough technicians. In the subsequent years lost its traction. AT&T finally rolled U-verse into DirecTV, their acquisition
- Around the 2014-2015 time frame, Novartis shut down its vaccine program, and a key scientist Philip Dormitzer joined Pfizer in 2015. Philip Dormitzer became Pfizer’s Chief Scientific Officer and developed the vaccine protocols. This process helped Pfizer in vaccine development. It proved out to be a wrong move for Novartis, which is currently working on a reorganization to evolve as a more scientific innovation company
History has many such stories of shortsightedness in Workforce Planning. Another example is the excessive IT outsourcing that left Enterprises dry of digital talent in subsequent years. In our meetings, we also debated what top aspects to keep in mind as we navigate the challenges. A few candidates emerged in our discussions, and here is the summary.
Develop the Library of Emerging Global Locations: Many globally emerging locations can fit the bill for skills centers. We recently helped companies evaluate places in Balkan countries like Kosovo and Albania. These locations are not the typical ones you may study, but they show some initial promise. The Kosovan Government introduced the Kosovo IT strategy in 2017 to increase the quality of skilled tech workforce in the country, attract investment and create a sustainable plan for long-term GDP growth using the domestic tech talent. The first pillar of this strategy was establishing a dedicated ministry for the country’s ICT (Information & Communication Technology) sector. The German government has set up the Kosovar-German Innovation and Training Park in Prizren to study the growth of the tech industry in Kosovo and identify areas of development. A broad range of locations is available in different emerging cities in the US, Canada, India, China, South East Asia, LatAm, and Africa. In Africa, places like Kenya show a robust university ecosystem and demonstrate signs of emerging as a vital hub.
Skill Clusters- Internal Job Roles – External Job Roles mapping: It may take organizations a while to truly adapt to Skills-based hiring. But organizations struggle to understand their internal job roles with relevant external ones. We took a rudimentary approach to organize internal job roles with external job roles within the context of several skills clusters. This process will help you arrive at an optimal Skills Taxonomy. This model is not perfect but a good starting point that will slowly take you to common skills taxonomy. Such a taxonomy will help you minimize redundancy. Such a taxonomy may also help you set up focused skills centers. Done correctly, this can feed very many internal initiatives, including Workday and other similar initiatives
Wages may not drop – at least, we do not have much data-driven evidence: We leveraged a large set of our harvesters to see if we see any change in the comp trend across 20 MSAs and 15 Tech job roles. We studied the recent offers across the geographies and manually validated the datasets. In software development job roles, we do not see any change. Some companies are paying more bonuses to compensate for the drop in stock value (this finding is reported in Bloomberg and not the Draup model finding– we focused more on base pay impact). We do expect some roles may demonstrate different behavior over time. For example, some very initial signs we observe in Data Analyst type roles may witness a slight decrease in the expected cost. The regional trends may very well be different. Depending upon the complexity of the work, you may not see this cost reduction soon. But a quarterly watch of the roles mapped to relevant external roles may provide us the opportunity to operate
We could get into an ongoing hypothesis testing to see where the opportunities are emerging
Null Hypothesis = There is no decrease in the wages due to the change in the Economy thus far
A clear map of Innovation to Skills and pathways to reach those skills: We emphasized the need to conduct a proper business simulation in our last week’s email. An effective business simulation should show you a clear set of projects. These projects need to be broken down into skills clusters and roles. Once you know the roles, the pathways become essential. Through this process, critical job roles can be identified.
Business Simulation – Projects – Skills – Skill Clusters – Job Roles
If the critical mass for such a job role does not exist, you can look internally and design the pathways. This approach is a slightly complex mapping but very useful for organizations. You can truly understand where you have the strategic advantage
- If you have made significant investments in transforming your call center workforce to be digitally savvy, the odds of converting some of them into Inside sales representatives are higher
- If your Data Analysts are already using a cloud environment and processing large amounts of data, the odds of transforming them into Data Engineers are higher
- Such a mapping may also require historical transformations – what we call the Velocity Pipe
Early Career Talent Mapping: Course Curricula are rapidly changing, and companies can do much more with early-career talent than even five years ago. Places like Latin America show great potential in early career talent leveraged by various industries. Mapping the Skill clusters for which early career can be targeted can be a perfect economic recession playbook. Depending on which university changed its curriculum to match emerging skills and expertise, talent can emerge from any university.
There are many other models HR should be building and maintaining during the next 3 to 12 months. Here are some of the models we have built and can help you with
- A macro location indexing model taking into consideration various aspects of Geopolitical and talent growth factors
- An Outside-in view of the attrition (granted, this will only be useful directionally but can still be very powerful)
- An Acquihire model. Especially around this time, startups go through cash pressure, and having a very concrete plan will be helpful