In this episode of the Business Excelleration® Podcast, how are global economic changes likely to impact on the labor market over the next year or two, and how can HR be ready to respond? A discussion with The Hackett Group CHRO and Global HR Advisory Leader Harry Osle and North American HR Executive Advisory Practice Leader Franco Girimonte.
Welcome to The Hackett Group’s “Business Excelleration Podcast,” where week after week we hear from experts on how to avoid obstacles, manage detours and celebrate milestones on the journey to world-class performance. This episode is hosted by Gary Baker, Global Communications director at The Hackett Group. Today’s episode will discuss how global economic changes are likely to impact the labor market over the next year or two, and how HR can be ready to respond. He is joined by The Hackett Group’s CHRO and Global HR Advisory Leader Harry Osle and North American HR Executive Advisory Practice Leader Franco Girimonte.
To begin, Harry sets the stage for what is happening in the economy and its potential impact on the labor market. Specifically, interest rates are likely to continue to increase until the economy slows down. He is hearing from construction and engineering organizations that things have begun to slow down. This means that businesses will continue to progress, albeit at a conscious rate. We will continue to see organizations invest in technology to drive efficiency and contributions. They will also look to outsource some of the knowledge-based jobs they have. Harry predicts a slowdown in the economy with a recession in 2024. This means organizations will continue to be cautious and put aside big-ticket capital expenses.
For HR leaders, Franco explains, the biggest question is around how to plan around talent. As a CHRO, clients are being advised to get super close to their business so that they can anticipate what’s needed going forward. The other is looking at talent management capabilities around recruiting, developing and retaining your talent. Aligning this with the business requires intimate knowledge of the business and cascading information top down. Organizations should also consider if their talent management portfolio is attuned to adapt to changes within the business. Harry adds that investing in technology at any level is absolutely necessary. Supporting the business is the most important aspect of what HR professionals do, and supporting employees is the next. In order to do both of these things, you need to have very good data. In order to have good data, you need a great technology platform. If you have the time to do so, our guests encourage listeners to invest in this area as soon as possible.
First and foremost, Harry adds, HR leaders need to improve their HR agility operating mode wherever possible. They should also consider leveraging service delivery models and maximizing services as much as possible. Now is the time to put money into the technology space and align with executive leadership teams. The responsibility of HR to deliver services to the business is first and foremost of importance, in addition to supporting employees on an everyday basis. Additionally, aligning to the executive leadership team to understand what the business is trying to accomplish in the future is key. If there are gaps in your talent, you should look at your talent acquisition, onboarding and strategic workforce planning process. Then comes making sure that you are leveraging your investment dollars as best as possible. Finally, doing a benchmark around current delivery capabilities is very important because it gives a platform for change. Conducting an assessment is the absolute best way to understand where you’re coming from. Before wrapping up, they touch on how the asset human capital can be applied to the business strategy.
- 0:49 – Welcome to this episode hosted by Gary Baker.
- 1:18 – What is happening in the economy right now?
- 6:26 – What does this mean for HR leaders?
- 13:21 – Other recommendations for HR leaders.
- 17:11 – Connecting human capital to business strategy.
- 18:18 – Thanks to Harry and Franco for joining us today!