Good morning!
Last week I wrote that organizations have fallen into a reactive mindset when it comes to talent strategy. While 2023 has seen relatively few layoffs, next year is shaping up to be a different picture. Around 92% of employers anticipate making some workforce reductions in 2024, according to a survey of more than 440 HR leaders from Randstad, a recruiting firm.
While several of the layoffs this year were cost based, many organizations including Meta and Spotify let employees go for strategic reasons, or because those positions no longer served the company’s business objectives. That could be the case again next year too, as 74% of executives surveyed by Mercer for its upcoming 2024 global talent trends report believe that the majority of their workforce cannot adapt to the new world of work.
“People are saying, ‘I don't have the talent I need, I'm more willing to pay a premium for it outside, and then I'm gonna do reductions in force on the [unwanted] talent,’” says Kate Bravery, a partner and global advisory solutions and insights leader at HR consulting firm Mercer.
But rather than react to the whims of the business cycle, or despair at the future of work, HR experts say that employers should avoid cuts by thinking about what their workers can deliver to the company over the long term. That also means recruiting with future employee potential in mind, says George Penn, managing vice president at Gartner’s HR practice. He likens this recruiting approach to how a coach would pick players for a team.
“Some sports organizations, they won't pick for a position on the field, they'll pick for athletic capability or athletic potential, and the intent being: I can play this individual in a multitude of positions,” says Penn. “It's the same for business. Some organizations need to do a better job of looking for that great business athlete who has the ability to have skills transferability or move into a multitude of future roles.”
Adopting a future-looking talent strategy also meshes well with companies offering upskilling opportunities to their employees.
“What I love with the new skills-based system is, [it’s] helping employees make better decisions, nudging them if they haven't moved in the last six or nine months, encouraging them to think about their skills and what skills are important in the future,” says Bravery. “I really like that, I think it's really heading in the right direction.”
Paige McGlauflin
paige.mcglauflin@fortune.com
@paidion
