To say that chief human resources officers (CHROs) have been busy in the COVID-19 era would be an understatement. Now, more than ever, they are central to how companies reimagine their personnel practices to build organizational resilience and drive value.
From the earliest days of the crisis, CHROs kept people safe while fostering connectivity and caring in an intensely stressful time. Since then, they have been working to maintain morale and productivity for remote workforces while planning how and when to get folks back into office settings.
At the same time, the COVID crisis has accelerated preexisting trends in five areas of talent management that are part of the CHRO playbook: finding and hiring the right people; learning and growing; managing and rewarding performance; tailoring the employee experience; and optimizing workforce planning and strategy.
In this article, we look at how CHROs can take action in those areas to craft a strong and durable talent strategy to thrive in the postpandemic world.
Finding and hiring the right people
In May 2020, we surveyed more than 190 chief HR officers and functional leaders across industries to find out how they were thinking about spending allocation in the months ahead. Of those leaders, 67% said they anticipated spending less on permanent hiring over the next year.
While some of that decline is related to a crisis-related reduction in labor demand, organizations are also rethinking their hiring processes more broadly. For example, given successful experiments in remote hiring, companies are reconsidering the need to go on campus for interviews. That is an acceleration of a preexisting trend that is expected to continue.
And because temporary labor is poised for a faster recovery, organizations should be ready to use that flexible labor in additional ways.
Learning and growing
Learning organizations face a tension between continuing cost pressures in a downturn and the need to deliver training to help workers adapt to a changing organization and business environment. Our research on reskilling shows that CHROs need to think about the effects of large workforce transitions, and about how reskilling helps close talent gaps while keeping employees connected to jobs. Here are three categories of cost-effective training:
- Broad-based digital training in essential skills. Many organizations are expanding remote training to address challenges, such as effective leadership of remote teams and building personal resilience.
- Focused upskilling rooted in changing work. Such forms of upskilling are function- and work-group specific and tied to different ways of working. For example, a sales force that is moving from a largely in-person to a hybrid-remote model will need to be upskilled in the practices that drive remote success. The right data-driven approach can bolster sales-force performance—and help HR departments draw a direct line from talent to revenue.
- Leadership development. We’ve seen the slow pace of corporate bureaucracy replaced by clear goals, focused teams, and rapid decision-making. CHROs have a key role to play in making sure this change sticks. Leadership-development programs (in classroom, online, or with a coach) can provide support for faster, more agile organizations.
Managing and rewarding performance
The COVID crisis has sped up needed shifts in how organizations manage and reward performance. As our previous research has shown, the majority of business leaders don’t believe that their performance-management system accurately identifies top performers—and the majority of employees don’t feel that the performance-management process accurately reflects their contributions.
The pandemic has dramatically affected goals and performance plans, making remote workers even more reliant on performance management. That makes three CHRO actions more relevant now:
- Transparently link employee goals to business priorities and maintain a strong element of flexibility. Managers should have regular conversations with their employees to set priorities jointly in a changing environment. Annual “set it and forget it” goal setting was already seeing declining relevance before the pandemic, given the pace of change and the need to adapt.
- Invest in managers’ coaching skills. Coaching is the heart of managing performance, which is even more critical when workers are remote. Organizations need to invest in managerial skills—and mindsets—around coaching and feedback as a continuing process.
- Keep ratings for the very highest—and lowest—performers but also celebrate the broad range of good performance. Instead of investing time and energy in making small differentiations in ratings (and pay) for those in the broad range of good performers, organizations should be focused more on having robust development conversations.
Tailoring the employee experience
One way to handle employee experience in a remote environment is to tailor the approach to individuals or segments of people. Our research shows that experiences vary widely. That is also true for the hybrid work environment, with some employees back in the office and others remaining at home.
CHROs must establish norms of working that foster engagement and inclusion for all employees. There is no one-size-fits-all solution. Organizations must be thoughtful about how they track and comprehend employee well-being—beyond annual engagement surveys.
Optimizing workforce planning and strategy
Workforce planning, strategy, and change is the category of HR spend that survey respondents cited as the most likely to increase. There are three important components to that category:
- Critical roles. Our research suggests that a small subset of roles (less than 50) are disproportionately important to delivering on a business-value agenda. For each of those roles, it is critical to identify the core jobs to be done, the qualities needed of the leaders, and whether the role is set up for success.
- Skill pools. In addition to individual roles, organizations should look at their major skill pools (for instance, digital coders) to understand the skills required for the future and whether they are long or short on the required talent. That means embracing a more dynamic view of their talent supplies—one that tosses out the usual preoccupation with titles and traditional roles, looking instead at the underlying skills that people have.
- Talent systems. CHROs now have more workforce-planning tools to help them match people to jobs. Artificial-intelligence-enabled tools can help assess an individual’s skills, and performance-management systems can be realigned to track skills alongside performance.
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We have seen “HR’s finest hour” in managing the radical shifts facing workforces during the pandemic, and we are excited to see how CHROs reimagine core talent practices during the recovery—and beyond.
Bryan Hancock is a partner at McKinsey & Company. Bill Schaninger is a senior partner at McKinsey & Company.
