From Crisis to Opportunity

Economic uncertainty is a fact of life for businesses, and HR needs to be prepared to navigate it. This requires an adaptable HR Operating Model that can respond quickly to change and innovation. This approach breaks away from rigid policies and service-based decision-making and allows HR to focus on the business problem and the outcome required. By giving the CHRO and HR function autonomy and the freedom to organise around the problem they’re trying to resolve, and the outcome the business needs, you allow for innovation and experimentation at pace – something not normally found within a traditional HR command and control functional structure.

An adaptable HR operating model will need to break away from rigid policy and service-based decision making. This traditional approach is best seen play out when HR have competing departments fighting for priorities and budget, normally in cyclical strategy setting events or when defining their annual department budget. The shift to being adaptable sees all HR projects being defined as solutions to meet business and workforce outcomes. The decisions about which HR projects are given a higher priority are then set around the impact they will deliver to their customers, not driven by competing HR leaders and the influence they have.

Enabling HR to work in this way requires a fundamental shift in how they sense what the business and its employees need, by understanding the environment outside of HR. Leveraging relationships and collaborating across a broader ecosystem of partners – from employee groups to external business communities – will allow HR to respond to the needs of the business. This model will require a shift in HR core capabilities to be centred in curiosity, collaboration, co-creation and continuous learning to name a few.

Numerous organisations moved into an adaptable mindset as they handled a sudden decrease in demand due to the government-imposed lockdown in response to a spike in COVID-19 cases. Dependent on the sector or industry HR had to quickly adapt to the situation and design a flexible working model that allowed employees to work from home, be furloughed, or a mix of the two whilst also adapting to hybrid/remote working. HR focused on the business outcome of maintaining operations and keeping employees engaged and productive rather than sticking to traditional ways of working.

However, there is a difference between a once in a lifetime (hopefully) external event like a pandemic – which for many organisations meant the whole organisation needing to adapt to survive in the short-medium term – and being structurally adaptable in the longer term to continually move with the changing needs of the business.

If we consider how the external environment has impacted manufacturing which faces on-going shortage of raw materials due to a global supply chain disruption. HR teams need to be able to assess the situation and collaborate with other departments who look at alternative sources of raw materials. This may involve the retraining of employees to work with new materials or adjusting their production schedules to manage the reduced supply. By focusing on business outcomes and being open to experimentation and innovation, HR should be able to support business continuity. The shortage of raw materials could cause significant disruptions to the production process and result in delays to order fulfilment, which may impact the company's reputation and revenue. The adaptable approach allows the company to quickly respond to the changing external environment. By leveraging relationships and collaborating across a broader ecosystem of partners, such as suppliers and customers, HR is able to gain a better understanding of the supply chain disruption and identify potential solutions quickly.

Adaptability must be front and centre of the CHRO's agenda as they design their operating model, allowing them to take disruption in their stride. Whether moving away from a traditional 'silo' structure for the first time or optimising an existing adaptable model from the lessons learned through previous economic uncertainties, adaptability will continue to be a key trend for HR leaders.

If you're interested in learning more about the future of work and HR, listen to our Humanising the Future of Work podcast series. Deloitte experts discuss how organisations can reimagine the way in which work is carried out and how HR can continue to evolve in today's rapidly changing business environment.

Note: This article is adapted from an original post made in March 2022, which can be found here: HR adaptability is needed to lead the Future of Work | Deloitte UK