Basic strategy for weathering an economic downturn involves focusing on your core business and strengths, reigning in unnecessary costs and doing more with less. While many HR talent management processes are sometimes perceived as "nice to have" practices, they're actually vital to your company's success. Since in many industries, the cost of labor is the largest single business expense, learning how to properly manage your workforce and foster a culture of high performance can be critical to survival. Research shows that companies who invest in talent management practices consistently outperform their peers.
Here are 7 things your organization can do to get the most out of your workforce.
Align Individual and Organizational Goals and Effectively Track Their Progress
While this is always an important talent management practice, it becomes critical in difficult economic times. Companies need to make sure that their employees are all focused on contributing to the organization's success. You need to make sure that everyone is working on the right things and that the organization is making progress on its goals. Think of it as keeping everyone's "eyes on the prize". If sufficient progress is not being made, leaders need to take corrective action immediately.
Also critical is the need to quickly and effectively communicate any change in focus, priorities or tactics. Your talent management system should allow you to quickly communicate changes that impact organizational goals to everyone who has a linked individual goal. Relying on your organizational hierarchy to “cascade” details of a change just isn’t reliable or efficient.
Conduct Regular Employee Reviews to Keep Employee Performance On Track
In tough financial times, many organizations are tempted to forgo their regular employee performance reviews, viewing them as an expense that can easily be spared. They fail to both see and reap the tremendous value this performance management process has to offer.
First, a performance appraisal is a critical opportunity for managers and employees to discuss performance highlights and challenges, goals and competencies, and any development needs. To perform at their best, it's critical for employees to get regular feedback on what they are doing well and areas for improvement, and to discuss skill gaps and career aspirations with their managers. This is the time when most managers and employees put plans in place to address performance gaps or expand an employee’s skills. It's one of the most effective ways to keep performance on track.
Second, performance appraisals help managers and HR identify low performers and take action to improve their performance, so the company can get the most out of all its resources.
Finally, with a well documented history of employee performance, managers and HR can more easily make critical decisions about workforce restructuring and right-sizing if/when needed. By consulting their "history" of performance appraisals, managers can more accurately identify high and low performers, as well as employees with critical knowledge/experience/skills, and thereby know who they can afford to lay off and who they can't.
Provide Ongoing Feedback to Maximize Performance
Ongoing feedback helps everyone maximize their performance. It allows for quick corrective action when things start to go off the rails, so managers and employees can address any issues while they are still small. While ideally managers and employees should be having conversations about performance on a regular basis, they often fail to do so except in the context of a formal employee evaluation. Automated talent management processes can help with email reminders and performance journals. Because they make the performance appraisal so much faster and easier for everyone to complete, they can also make it practical to do quarterly or semi-annual reviews instead of just annual ones. You might also want to include 360 degree feedback in your process to broaden the feedback that employees get. Again, an automated talent management system can make this simple and practical.
Invest in Performance-based Development
An economic downturn makes it even more important for a company to be sure they are getting value from their investment in employee development. The best way to start is to be sure you're offering the training that employees need. By starting from your employees' performance appraisals and using them to identify skill gaps, you can be sure you're offering the right, targeted learning activities.
This analysis needs to be done on two levels. First, your learning and development organization should identify areas where employees received low scores and ensure they have a learning offering to address these. Next your learning and development organization needs to look at the overall scores for critical competencies and identify whether the organization has the bench strength it needs in these key areas to succeed. If overall scores on a critical competency are lower than they should be, it may be time for a larger organizational effort to cultivate those competencies.
One final talent management practice that is important for extracting value from your training is to measure the change or improvement in employee performance that results from a learning intervention. A sustained improvement in employee performance, as measured by your performance appraisal process, is a far truer measure of the effectiveness of your training than any post training testing or evaluation.
Identify and Reward High Performing Employees
Knowing who your high performing and high potential employees are is always critical. While you may not be able to reward them with salary increases, bonuses or other monetary rewards during an economic downturn, you can still demonstrate your organizational commitment to them and recognize their contributions. Having a talent pool based succession plan allows your organization to effectively identify your top employees and reward them with development initiatives that help advance their careers and prepare them for promotion. These are the employees you can't afford to loose; make sure you're acknowledging their performance and potential, and benefitting from all they have to offer.
Have a Succession Plan
Employee turnover can happen at any time, even during an economic downturn. Your organization needs to be prepared to replace critical roles and competencies at all times. It's even more vital in a downturn, when a vacant leadership position or shortage of critical talent could cripple your organization or even prove fatal. A talent pool based succession plan challenges your organization to identify the critical skills and competencies it needs across the organization to succeed over the long term, not just the leadership roles it may need to fill. It then helps you identify and groom your high-performing and high-potential employees to fill these needs when they arise.
Be as Efficient as Possible
We all know the saying "time is money". In an economic downturn, no organization can afford inefficient processes. You need to save time and money everywhere you can. Systems that automate your talent management processes make these processes more efficient and cost effective. Many companies realize an ROI on their investment in talent management software in the very first year – often enough to more than cover the cost of the new system. They also usually see an increase the quality and value of their processes, typically resulting in higher employee satisfaction and engagement.
Read About Halogen Software Customers
Despite a downward market trend and unstable economic climate, 2nd Wind Exercise Equipment 's sales numbers have remained steady. CFO Tom Kelly attributes this stability to employees being more invested in the organization's success thanks to their automated talent management system.
Leading investment firm AGF automated their talent management processes in order to rally the organization together during a time of change and transition. They succeeded in elevating the business to new heights and re-stimulating growth and performance.
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