At the moment we’re living through an interesting timeline. Some economists are warning of a looming great recession in 2022, but companies are still adding jobs. Raises are above normal levels, but hiring freezes are also on the agenda. And then there are the employees themselves, who were quitting at will a year ago. Now many are rushing to find work.
Clearly, we are dealing with a host of paradoxes. No wonder corporate leaders are feeling the pressure—especially with the possibility of an economic recession similar to the 2008 recession on the horizon. So, what’s the best course of action?
We recently gathered some of Korn Ferry’s leading senior client partners to talk about what’s going on and what they’re advising their clients to do to weather the storm. The panelists included: Dennis Baltzley, Global Solution Leader in our Leadership practice; Alan Guarino, Vice Chairman of Korn Ferry’s CEO and Board Services; Wayne Mealey, Vice President – Client Services; Sheila O’Grady, Korn Ferry’s Senior Client Partner in the Consumer practice; Ron Porter, Senior Client Partner at our Global Human Resources Center of Excellence; and moderator and Korn Ferry CMO, Jill Wiltfong. Below we discuss some of the key takeaways that came from this session.
Current state of the economy: the big picture
We kicked things off by getting a macro view of what’s happening right now. Today’s business leaders are dealing with issues they’ve never had to handle before. So, what are these new challenges?
Given the immense social and political upheaval of recent times, societal issues are now front and center in business. As Baltzley observed, organizations simply can’t afford to get on the wrong side of an issue: consumers will notice. At the same time, businesses can’t just play it safe, sit it out, and avoid taking action. Leaders must effect change in their businesses to stay on the right side of history and their customers.
Meanwhile, we’re working in a low-trust world, in which people are highly suspicious of banks, government, big pharma and big tech. People don’t trust corporations with their data, but they still enjoy a personalized customer experience (which needs that data to work), resulting in tension.
In the consumer and retail space, O’Grady is seeing two approaches to handling this uncertainty. One group of companies is sticking strong to their strategy despite all of the current economic turmoil. They’re playing the long game, investing in their business now so they can get ahead for the future. The second group is more conservative: they’re slowing down their growth, investing only in the core essentials and making cuts across teams.
And of course, the pace of change continues to be blistering. As Porter put it: “Things are quicker than they’ve ever been. But things are never going to be slower than they are today”. Strategies will need to change quickly, even if they’re successful, with organizations rapidly morphing structures to keep up with the dynamic change in the marketplace. Disruptive change is a constant, which means the demand for top talent is eternal.
Company purpose matters
The idea of a company’s mission, or purpose, became hugely prevalent during the pandemic, and it continues to be an essential driving force for organizations. As Baltzley observed: “Purpose is an anchor in a sea of uncertainty. We might take it for granted, when actually, it’s a huge pillar.”
For employees, a strong mission can keep morale high, inspiring them to deliver that extra effort and keeping them engaged, focused and motivated over the long term. And it’s a benchmark against which potential candidates can be judged. They might be able to do the job, but do they fit the mission?
However, it’s not enough just to have your mission written down somewhere. How you convey it is absolutely key. You have to communicate it—cascade the message downwards—so that everyone, from the C-suite to the front line, is clear on what the mission means for them. Military organizations understand this and get it right, but few other businesses do.
In order to be powerful in the midst of all this chaos, your company’s purpose needs to be transparent, authentic and come from the heart. You’ve got to walk the talk, with strategy aligned to purpose. Employees will quickly see through empty words.
Adapting hiring strategies
The paradox here is between the ‘great resignation’ and the recent rounds of layoffs that have been sweeping across businesses in multiple sectors. Is this the beginning of the next great recession? What’s actually happening?
On the hiring side of things, there’s a lot of adjustment going on. Businesses have had to pivot from the full-on hiring freeze of two years ago, followed by a post-pandemic overcorrection and hiring across the board.
Mealey talked about how companies are still hiring but in a targeted way: identifying the business-critical roles they need and balancing out natural attrition, without going overboard. They may be cutting on one side and hiring on another in order to flex to changing business needs. And businesses are better at discerning who they need and who will be a better fit for their culture (for example: do they need a transformer or an improver?).
Raises are mostly off the table for the time being, but businesses are investing in key roles (hello, Chief Supply Chain Officers) and competing for diverse talent and hot spots.
Bottom line: top talent is in high demand and always will be. The challenge for organizations is getting the best people in the right roles in a way that’s aligned with strategy.