“Now is an unprecedented opportunity to hire great talent” may seem an unlikely phrase to hear given the seismic changes that are happening amidst a global pandemic. But it’s the title of the latest article from Claudio Fernández-Aráoz, executive fellow at Harvard Business School. And it makes for very convincing reading.
Just to remind ourselves, four-fifths of CEOs (according to The Economist) were worried about skill shortages going into the Covid crisis. That figure was up by 50% from 2012 – reflected in record levels of external hiring in 2019 and a reported growth of 9%-15% by global search firms last year.
Has Covid put paid to all this? Globalisation may be receding. Many companies are downsizing. Some sectors are collapsing. An unprecedented number of people from new graduates to seasoned professionals will be looking for employment. Employees are recalculating their personal purpose and individual and family priorities, with serious implications for their work preferences and travel habits. The pool of available talent is suddenly both changing and expanding, and Claudio argues that visionary organisations can take advantage of this. His evidence? History.
THE POOL OF AVAILABLE TALENT IS SUDDENLY BOTH CHANGING AND EXPANDING.
He points to the fact that throughout history, economic hardships have created windows in which exceptional employees and leaders are widely available for a limited time. In the late 1940s, for example, many organisations were struggling. At Hewlett-Packard, the then-fledgling electronic equipment maker, business was slow and finances strained. But as legions of great engineers streamed out of closing or soon-to-close U.S. military labs, HP’s founders Bill Hewlett and Dave Packard realised they couldn’t let such an amazing recruiting opportunity pass them by. When asked how they could afford to keep taking on new people in those difficult years, their answer was simple: “How could we afford not to!” Years later, when asked about the biggest contributor to HP’s success over the years, they routinely cited their willingness to invest in talent no matter the external economic climate.
A WILLINGNESS TO INVEST IN TALENT NO MATTER THE EXTERNAL ECONOMIC CLIMATE.
While most of us become short-sighted and irrational during crises, the best leaders and organisations stay calm and use them to their advantage. But this response is far from the norm. Harvard Business School’s Ranjay Gulati, Nitin Nohria, and Franz Wohlgezogen considered the benefits of this kind of long-term thinking in an analysis of 4,700 companies across the last three recessions. They discovered that 9% were able to come out in much better positions than they entered because of their “progressive” focus. They did cut back, but were extremely selective about when and where they did so and, more importantly, they continued to make strategic investments. Rather than thinking in “either/or” terms — you’re either hiring or you’re downsizing — they, like HP following the war, embraced the “and,” understanding they could do both things if they were smart about it.
Encouragingly, our own clients continue to show an appetite for learning experiences that help them “hire better” – be it through our Proposition Development or Recruitment Copywriting or Employer Branding for Recruiters workshops and masterclasses. But unfortunately, most companies make the mistake of uniformly freezing hiring in downturns. During the 2008 global financial crisis, BCG and the European Association for People Management surveyed 3,400 executives, including 90 senior human resources leaders in more than 30 countries, to see how they were responding. The most frequent action (or reaction) was to scale back recruiting. At the same time, survey participants rated the selective hiring of high-performing employees from competitors as one of the three most effective responses to the previous crisis (from a list of 22) and the one with the best impact on employee commitment.
This irrationality is widespread.
Those who stay rational can capitalise on it.
Those who don’t, according to HBR,
may become history …
Aurelia Cesari, Project Director, PeopleStory.