Post-COVID-19: The Competitive Edge in Talent
I hear you out there; a collective sigh as we open our portfolio statements to what comes as no surprise. But common wisdom holds that now is not the time to wholesale stocks and stick your entire nest egg under a mattress. Investing pundits advise us to stay in the fight; those who retreat will miss the inevitable rebound, their holdings eclipsed by the gains of more steadfast investors.
I don’t claim to be the next Oracle of Omaha, but I do know a thing or two about talent. In my 20 years of helping clients navigate the highs, lows and everything in-between, I can confidently say that the wisdom of my investment peers also holds true in the talent space; now is the time to stay the course with your investment in talent.
“Now is the time to stay the course with your investment in talent.”
Through past recessions—the dot com bubble, the (not so comparatively) Great Recession of 2008—I’ve consistently seen our clients who continued in their commitment to finding and accelerating top talent rewarded with success. If you’re one of those whose been with us through it all, you know what I mean. But don’t just take my word for it.
Those who consistently invest in talent win big
History also tells us that those who embrace times of crisis, who use them to reassess opportunities and invest in growth, win and win big. Study after study confirms that those, who in the face of market volatility and downturns, make consistent strategic investments in their assets and opportunities, including human capital, come out ahead. Looking to 2008 for lessons, Bain reports that “losing companies” commonly employed extreme cost-cutting strategies, such as laying off valuable talent, along with scaling back on R&D, sales, and marketing activities; whereas “winners” accelerated into double digit profitability through a strategic balance of offensive and defensive tactics; a key distinction was spending and hiring before the markets rebounded. This enabled the winners to “accelerate hard out of the curve.”
Likewise, the Harvard Business Review identified the key actions of post-recession winners to include a balance of cutting costs, improving operational efficiencies, and strategic investing in R&D, marketing, and asset acquisitions that poised them to quickly act on opportunity. Importantly, their study notes that companies who solely relied on workforce cuts had a dismal 11% chance of breakaway performance in the recovery. Their take-away; that retreat sends a message of fear and defeat to those employees who remain, effectively cobbling any attempts to accelerate through the crisis.
And because every good piece of advice comes in three, I also look to Deloitte’s take. Their 2010 survey of 1,800 global executives was telling; after the Great Recession, “firms that posted stronger performances and were more optimistic about the future were those that refused to put retaining top employees — or even hiring some of their rivals’ future stars — on the back burner.”
Why investing in talent matters
Our experience, and history, resoundingly tell us that investing in talent is the right thing to do. So what’s behind it all? Quite simply, our talent is the engine of future growth. During times of crisis, you need the right people with the right talent and experience to lead you through the hard choices. Likewise, maintaining recruiting at planned levels sends a strong message of growth to prospective and existing employees, not to mention your clients. Conversely, acquiring talent from behind the curve often places firms in an unenviable and unrecoverable position. Ultimately, I think that those who choose to invest in growth, rather than retrench for survival, benefit from an opportunity mindset. They know, and live, the mantra; “Do not let a good crisis go to waste.”
Our talent will shape our future
Global disruption, digital disruption, climate disruption. The list goes on. Underlying them all is the disruption of disruption; the unprecedented, continuous, accelerating change in everything that I believe is at the root of many woes. And while that’s a topic for another day, it brings me to an important point.
Now more than ever, we need to cultivate a cadre of leaders who can lead us through disruption with agility, innovation and foresight. Leaders with strength, resilience, confidence and an opportunity mindset. They need us to be their champions; to invest in their growth, plant them in the soil that will allow them to thrive, and give them the tools they need to rise to the challenge. That’s why, now more than ever, you need to be investing in your people, the right people, in the right ways.
This is our moment of truth, our opportunity to accelerate through the turbulence and do the right thing, not just for our bottom line, but for the world that we hope to see. Will you join me in staying the course?
