A recent article in CIO magazine suggested at a Gartner IT Symposium in Barcelona, that CIOs should be using the current recessionary period as an opportunity to use digital investment to deliver growth, focusing on ‘revolutionary work’ to empower the workforce, ‘responsible investment’ to balance financial and sustainability objectives, and ‘resilient cybersecurity’ to support business outcomes “without constraining them”.
Today’s latest think-piece from LACE comes from Tim Ringo, who recently joined the business, as Tim reflects that businesses need to continue to invest during a downturn, so they can be ready for the upturn in business activity.
The inflection point
Traditionally, organisations “retrench” as soon as economic tailwinds turn into headwinds. They reduce investment in technology change programmes and they begin to shed headcount. In April 2020, I wrote a blog about this as the COVID pandemic emerged and organisations began immediate retrenching activities. I argued C-level executives should do the exact opposite of traditional retrenchment and invest MORE in technology change and in people (avoid the “Hire and Fire Binge” linked to the economic cycle).
In fact, many organisations encountered very negative news headlines this year, when business activity rapidly increased in early 2022, however industries like airlines and hospitality had made heavy cuts in headcount (a “Fire Binge”) and in technology spend during 2020 and 2021 and found themselves without the people and technology they needed. This resulted in massive flight and hotel services disruption (and large losses in revenue and profits, as a result).
Nearly three years later from April 2020 we are at another inflection point of economic uncertainty (or is it just the extension uncertainty from pandemic disruption?), and again are faced with critical choices.
Gartner, citing its own research, found that only 31% of employees have the technology they need to do their jobs properly, Gartner analysts also believe that a greater collaboration between IT and HR, and better technology in the workplace, could lead to an improved employee experience that would, in-turn, benefit staff retention.
“This provides a tremendous opportunity for CIOs to make the difference,” said Mesaglio.
“Employers who revolutionise the work and empower their workers with technology will become the employers of choice.”
Focus on strategic workforce planning
Additionally, it is smart business to avoid headcount reduction, and divert focus and investment into “strategic workforce planning” to look out beyond the immediate economic realities and plan for the near future. In fact, it is the perfect time to find top talent as others make the mistake of letting talent go, your organisation can get top talent from others .So, put together a ‘strategic workforce plan; where you review your current workforce not just in the numbers (headcount and costs), but take a three-dimensional view of your people:
- Their skills today, and what skills you will need in the near future
- Your succession plans for your key leaders
- Calculate likely demand for these and supply of these skills and where to deploy them
- Look out 6 to 18 months, to make the plan focused on the foreseeable future.
Your people-team will very likely have this information (and if they don’t? that is a subject for another blog), and it should be what drives your decision making in this crisis (and after). Once you have done this work, you will be ready to make clear decisions based on data and forecasts. Informed decisions, that I argue, will be one where you are unlikely to binge fire. In fact, I would bet you will keep most of your workforce in place, and even hire more talent, if the data supports that.
In summary, its time to stop traditional “retrenchment” activities during downturns. Be counter-intuitive: Invest in technology change and invest in finding and retaining top talent during economic headwinds.
If you’d like to talk to us about making sure you have your business case for continuing your businesses digital investment, then reach out to us today using the form below.