Navigating HR Challenges in Current Global Economic Uncertainty
Business disruptions have increased in recent years in scope, depth, and speed. With a more significant emphasis on organisational survivability and profitability amid an unpredictable political climate, the aftermath from HR transformations such as internal restructure and layoffs and revolutionary interventions such as generative artificial intelligence (GAI) are becoming relentless and uncontrolled. Despite economic recovery, the business landscape remains volatile and vulnerable. HR leaders are repeatedly made to take the front seat to lead an evolving HR agenda and adjust workforce planning initiatives to cope with and balance the repercussions affecting productivity, culture, and people's motivations.
However, despite mediating efforts by HR leaders, there is still a growing disconnect between what employers think is important and what matters to employees. The mental health crisis continues to be a leading concern, with employees feeling more tired and burnt out or jaded about their own growth. Employees continue to feel anxious about their job security, further amplified by social media. Over the last few years, social media platforms have allowed for rapid and widespread dissemination of information, whether factual or speculative. Employees hear news about layoffs, organisational changes, or industry downturns from social media before official communication from their own company. This all combines to make employee retention in a talent-short market all the more challenging amid job security concerns and external opportunities that may look like solutions.
As organisational transformations ensue, the extent to which our existing HR strategies are truly effective in advocating employee resilience is questioned. Are HR programs today looking great on paper but, in reality, not serving their purposes? Or are the strategies right, but employees are not understanding the intentions? By understanding these areas, organisations will create a more stable and supportive environment for their employees, increasing retention rates and overall job satisfaction.
Workforce Planning versus Employee Resilience – Key is Mindset Shift
The most common pitfall of workforce planning is when risk assessment is being carried out short term and implications on future work demands are overlooked. When change becomes massive and persistent, it is not about the ability to cope with the ongoing change—it is the readiness to do so. Change management does not merely entail implementing new processes or technologies; it requires a change of mindset for people to have time to be prepared, through understanding the purpose and benefits of change, and having an intrinsic motivation to embrace it as an opportunity for positive transformation.
Facilitating a change of mindset requires clear and effective communication. We adopt a “transformation as usual” notion, and helping employees normalise that change is evident and encourage them to acquire new skillsets and behaviours to grow and empower themselves.
Bianca Wong, Vice President, Human Resources Asia Pacific, FedEx
In fact, the key drivers for why employees are leaving may simply be relational: they may feel undervalued by the organisation, their bosses, or their teammates in times of uncertainty. Aki Arráez Ramón, VP of People and Culture at Jack Wolfskin, emphasises the importance of understanding the true drivers that keep employees engaged and motivated.
What makes employees leave or stay is often not what employers think. There’s a need to truly verify what the drivers are, e.g., through data sources such as exit interviews, survey results, and, of course, live conversations to understand what truly makes talents join, stay or leave. Your people and culture initiatives must focus on these true drivers.
Organisations should prioritise creating a psychologically safe workplace and promoting a culture of change acceptance and open feedback. Employees feel more in control when their perspectives are appreciated, when they know what is expected, and when they are allowed to resolve issues of distrust between managers and teams.
Embracing Creativity and Internal Growth
Talent shortages, fluctuating workloads, and increasing stress create challenges for employers in efficiently identifying talent. With hiring budgets constrained, now is the ideal time for employers to prioritise internal talent. Reassigning talent fosters a culture of adaptability and growth.
The embrace of non-linear progression through cross-functional selection can reveal skills for broader career pathways. Such innovative approaches have already been widely adopted by companies like Google, Hewlett Packard, Unilever, and Jardine Schindler Group, and they have all been proven to increase creativity and quality of work. Anu Anand, HR Business Partner Leader, Asia Pacific, Google Cloud, supports this approach:
Hiring talent from an atypical career route enables one to see gaps and insights that a typical leader may overlook. Successful career transitions with the right challenge keep talents on their toes solving a different set of problems altogether.
Embrace AI in HR Safely and Responsibly
As business transformations become more data-led, it is unsurprising that most multinational companies, government bodies, and small businesses are embracing the rapid breakthroughs of generative AI and its compelling advantages and milestones in talent selection and development, predictive analytics, and HR services.
Nonetheless, HR leaders will need to stay ahead and be vigilant. The integration of AI does not merely involve technological adoption; it warrants a more strategic partnership with the broader business as well as a better understanding of its ethical and cultural implications from a wider usage of employees, in the long run, to align with overall organisational success. While AI can respond to basic employee inquiries, the level of trust in the accuracy of information received from chatbots remains in question due to biases and discrimination. Furthermore, recent worldwide outages indicate that increasing adoption may potentially lead to more significant risks, such as data privacy leakages, possibilities of deepfakes, and cybersecurity compromise.
It is essential that companies transparently communicate in detail about how AI is being adopted in their infrastructures so that employees feel comfortable and assured that it is more of an extended asset, especially when its usage is still experimental and a work in progress. A robust framework from development to deployment with well-established guidelines on its privacy approach must be in place. This fosters data protection practices that offer controls and remedies for users to make well-informed choices when managing information responsibly.
Companies can equip employees with AI skills by offering targeted training programs, workshops, and projects aligning with the organisation's AI adoption goals and individual career growth. By involving employees in the AI transformation process, the organisation benefits from a skilled workforce ready to drive AI initiatives forward.
The Bottom Line
As market turbulence continues, there is no expiry date on change towards employee and organisational resilience. There is a plethora of viable HR strategies that can be adopted. Still, HR leaders will need to stay agile, adapt, and think innovatively to balance the demands of business leaders on the impact of employee resilience and happiness. To achieve this, organisations should continuously foster a safe ecosystem that embraces creativity, experimentation, and failure, and leaders must encourage closer communication with their team members. To find solutions swiftly and effectively, ensuring that employees are well-informed about the available options and internal opportunities is equally crucial. Establishing open channels of communication plays a crucial role in this process, fostering an environment where employees feel empowered and engaged.
On the flip side, HR leaders should also lead by example and encourage self-care by being role models advocating positive behaviours and attitudes such as promoting beneficial habits like exercise and healthy eating, catering resources for mental health support, and allowing flexible work arrangements. This can help foster a culture of resilience that provides a safe and secure workplace that encourages work-life balance and well-being while contributing productively to a transformative work setting.
Navigating HR challenges will remain constant and require ongoing adaptation and innovation. The key to retaining talent during uncertain economic times is fostering resilience, adaptability, and a commitment to continuous learning. Leaders must nurture environments where employees and organisations thrive, ensuring mutual success through collaboration and growth.
