As the COVID-19 crisis drags on, HR professionals are forced to reorganize their workforce on an almost weekly basis. The word that best describes their mood is “exhausted” as they struggle to adapt organizational design to rapidly evolving business conditions. HR teams are the first responders in the corporate setting, and they’ve been in triage mode to ensure company survival for months.
It’s not an indefinitely sustainable situation, and unfortunately, there’s no “one weird trick” or “five easy steps” that will fix everything. But it is worth taking a look at whether constant reorganizations are helping or hurting talent management. It’s also worth thinking through scenarios that can have unintended negative side effects during a reorganization and finding ways to identify pitfalls.
What Falls Through the Cracks?
Even before the economic toll from the pandemic made reorganizing on the fly an all-too-familiar exercise for HR, organizational redesigns were frequent, and companies often fell short of their stated goals. Pre-pandemic McKinsey research found that less than a quarter of redesign efforts succeed, and that was when most companies weren’t in emergency triage mode.
Now, many HR professionals are working in the crucible of a business crisis, and while they’re terrified of putting inaccurate data in front of decision-makers, they’re also under enormous pressure to provide information quickly. Additionally, HR teams are acutely aware of the possibility of unintended consequences, and they need deep visibility into their workforce to avoid them.
To cite one real-world example, the HR team at a global technology manufacturing business was tasked with identifying where to make cuts to adjust to a sharp fall-off in demand in one sector. They furloughed engineers who were working in that line of business, only to discover shortly afterward that rising demand in another sector required hiring engineers with the same skills.
That’s one type of unintended consequence; another is that high-value employees tend to see layoffs as a sign of corporate weakness. They may decide to seek another job, and the uneven economic effects of the pandemic may provide openings.
Meanwhile, diversity and inclusion initiatives can also fall through the cracks during a reorganization if HR doesn’t have enough visibility into the workforce. That’s a big deal because companies have invested so much in D&I programs, which are essential not only to achieve workplace equality and comply with regulations but also to realize the massive growth potential that a diverse and inclusive workplace can deliver.
Becoming Comfortable With Uncertainty
The current environment entails hidden dangers, and there are no quick or easy fixes. For all of the talk about digital transformation, it turns out technology is not a panacea. Too many HR professionals are still swimming in spreadsheets and trying to put together the people data they need to guide workforce decisions, despite heavy investment in new systems and tools.
It’s important to identify insights that enable HR to fundamentally rethink the workspace. Not just short-term measures like moving desks further apart or installing plexiglass shields. Rather, we need structural decisions about what constitutes a team and a workplace. The time for the organization of the future is now. Big technology companies are sending signals: Facebook now says staff can work from home forever. Twitter and Square provide that option, too.
Not every company can do that, of course. But the current pressure cooker for HR suggests that we have to think beyond reconfiguring offices and start redefining engagement, collaboration, and team design to achieve greater agility. If the pandemic has taught just one lesson, it’s that agility — the ability to make better decisions more quickly — is a fundamental competitive advantage.
HR needs data and analytics capabilities to enable agility. HR professionals need total workforce visibility and comprehensive data to model scenarios and make decisions. Budgets are tight, but the finance team can be an ally here, helping HR leaders make the case for better people analytics. This will enable HR to identify hidden costs in headcount reductions and conduct more rational reorganizations going forward.
In a “hair on fire” situation, the human side of the equation is easy to overlook. Getting the talent factor right in a reorganization is just as important as getting the budget in check. It’s time for HR to make peace with uncertainty, seek out the necessary data, look at potential scenarios, and make the best decisions. This is how HR can lead — even with their hair on fire.