How CFOs can incorporate resilience in their plans: WorkforceThe COVID-19 pandemic has underscored to finance leaders the need to have structures that can withstand shocks to help their teams and their business thrive.
This is the first in our series “Designing for Resilience,” examining how management accountants and finance professionals can incorporate resilience into their strategic designs.
Many organisations reacted quickly to the sudden shock of the pandemic in the spring of 2020 and found short-term ways to adjust to new realities. But strategies that worked in the beginning of the pandemic may no longer be relevant, and organisations now need to think about the longer term. Real resilience requires a more thorough, sustainable transition — not just quick fixes and temporary changes.
Even as COVID-19 vaccines are rolled out, there could be any number of disasters just around the corner. The next shock could come in the form of climate change, a natural disaster, or a political upset where critical supplies are challenged.
Management teams can expect “future disruptions in market dynamics, regulatory requirements, and in the competitive landscape”, said Jessica Knight, a Virginia-based vice-president and team leader for Gartner’s change management and organisational design research team.
In thinking through the shift towards long-term resilience, CFOs must consider the human resources implications as well as the long-term cost-benefit analysis.
Many will find that fragile business models no longer make sense, and, instead, it will require investment in people to survive and thrive in the changed global business environment.
Recruiting the right people
Key to building a resilient workforce is hiring and recruiting the right employees, including those with multiple skillsets. Often, if you get talented people in place, the adaptation and agility piece will follow.
Recruiting can be tough in a pandemic, as Gartner highlighted in an October 2020 report: High-quality workers are less likely to leave their current jobs given the uncertainty in the economy. But there are some things financial managers can do to help recruitment. Gartner laid out three important steps that could boost a company’s quality of hires by 24%.
First, start by defining your talent requirements by the essential skills needed to get the job done, rather than a traditional hiring profile of an employee. For example, rather than deciding you need to hire a new finance director, think instead about some of the essential skills necessary to the position, such as leadership, agility, and empathy. You might be able to find those skills from within your existing workforce. Do employees in other roles have those skills, even if they're not currently being put to use?
Next, look beyond traditional talent pools. That means considering candidates outside your normal pool, as well as candidates who are self-taught rather than solely those with traditional credentials. (It also means looking internally, first.) According to Gartner, 43% of candidates today are self-taught in one or more of their role's requirements.
Lastly, be sure to adapt what you are offering employees to respond to today's environment. That means leveraging labour market insights, such as candidate feedback and competitors' offerings, to maintain an attractive offering in terms of work/life balance, internal development opportunities, and company culture.
When it comes to shaping your workforce, Gartner's Knight recommended broadening the ways managers source new talent beyond “full-time employee” and pushing decisions about talent needs deeper into the organisation.
“Resilience requires more than a view into how skills are changing,” she said. “Organisations must be able to get those skills into the right parts of the organisation at the right time.”
Supporting a resilient workforce
As for boosting resilience in your existing workforce, Shivani Maitra, a London-based human capital consulting partner at Deloitte, also laid out three crucial steps.
First, she said, employers must keep an eye on their employees’ morale and overall wellbeing, and do so on an individual, human level, rather than solely through company-wide wellbeing programmes. Check to make sure your staff are taking enough time off, getting enough rest, and receiving support to cope with stress. Employees may have caring responsibilities or other complications brought on by the pandemic; good employers will be responsive to that.
Second, managers should maintain regular engagement and communication with staff to keep them in the loop, especially if they are working remotely. Ask yourself, Am I talking to my people enough? Do they know what's happening? Do they have access to the leadership team? Are they engaging enough with their colleagues? Healthy, satisfied employees who feel well connected tend to be the most resilient employees, Maitra said.
The third element, which Maitra said was most critical, is upskilling your people to adapt to fast-changing marketplaces.
“A resilient workforce is a workforce that’s prepared for the future,” she said. “The organisations that have done well are the ones where the workforce has the right tools and the right skills through this period of uncertainty.”
Offering in-house learning and development programmes, or overhauling existing programmes for staff, can provide more opportunities. Some companies have created open talent portals to help workers move between roles and functions internally. By offering learning opportunities to your existing workforce, you could create those skills in-house yourself.
As for the cost-benefit analysis of investing in your workforce, Maitra stressed that focusing too much on efficiency at the expense of employee development leaves businesses unprepared for future shocks and uncertainty. It also hurts their employer brand, or social contract, with staff. She urged managers to consider the consequences of that type of reputational risk.
"If you're going to continuously be short-term focused, what is that saying about your role as an employer? What is it saying about the way you support your staff?” she said. “One thing that has fundamentally shifted is the relationship an organisation has with an employee."
Not investing in the workforce, or being flexible about their needs, can damage a company financially over the long term. If managers don’t prioritise their employees’ needs, talented staff may leave the company altogether.
— Portia Crowe is a freelance writer based in France. To comment on this article or to suggest an idea for another article, contact Drew Adamek, an FM magazine senior editor, at Andrew.Adamek@aicpa-cima.com.