“As a war on talent rages – yet again – we must use the perspective of history to better prepare for the future” – Mike Beesley, founder of The HR World

Rewriting the age-old HR script will allow us to emerge stronger from the current economic crisis. 

Recruitment industry expert Mike Beesley considers the importance of a great working environment in defence of the office

07 October 2022

Mike Beesley

Story by
Mike Beesley, Founder & Managing Director, The HR World 

With a career in the people space spanning four decades, there is one thing I’ve learned: every time there is a war on talent, we think it’s the first.

But I’ve been working in this area since the 1980s and experience has taught me that just as the economy works to familiar cycles, so, too, does HR.

In this world though it’s not about boom and bust, rather the narrative that can play out during times of economic crisis is ‘hire, hire, hire’ followed by ‘fire, fire, fire’.

And it’s time to rewrite it. We must abandon so much of our traditional thinking and find new ways to successfully negotiate the increasingly complex – and combustible – world we live in.

Let’s start with the very first building block: don’t believe everything you’re told.

Over the past couple of years, the HR industry has galvanised around a familiar theme: the war on talent. And it’s true of course that the market has experienced some extraordinary pressures.

Combine Brexit with the effects of the pandemic – everything from empty posts created by laying off workers to people taking early retirement – and it created a vacuum that needed to be filled.

But at times, as I’ve looked at the headline vacancies being quoted in the press, creating anxiety in HR departments up and down the land, and wondered if I was living in a parallel universe.

Where exactly did these figures come from? How many of these vacancies were actually real? And how many have disappeared now we’re experiencing a downturn?

If the Queen’s funeral is anything to go by, then we must question the statistics.

Within days of the event, it was being quoted that four billion had watched her funeral worldwide. The number was repeated across so many news outlets it became fact.

Then it emerged that this figure was quoted by one analyst at one website who used it for the expected number of viewers – not even those who did actually watch – and didn’t extrapolate how they’d come up with it. Their prediction was taken as read.

All of us working in the field of HR must take care not to buy into the headlines, be accountable for our part in behavioural cycles. HR – like so many industries – is subject to the whims of the headlines. And as we rush to respond to them, we risk creating a ripple effect that morphs a micro trend to a concrete macro movement.

Businesses are clearly all competing for the best young talent. But let’s not characterise it as a war. Because war creates a sense of increased pressure that can lead to bad decision-making – and an often-panicked hiring strategy.

And then what happens when times get more difficult as they are now?

That’s when we usually flip from the hire, hire, hire side of the coin to the fire, fire, fire one. And young talent is usually at the sharpest end of this.

Two experiences in my early career taught me vital lessons about how to negotiate difficult times.

The first was doing recruitment for the Central Electricity Generating Board in the 1980s. When it was broken up, many of its specialists were made redundant and moved into other industries. When demand returned again, there was a void of talent.

The second was when I was asked to hire people into the IT functions at the forklift truck manufacturer Lansing Bagnall, which had just been acquired by the German company Linde AG in 1989.

It wasn’t a good time economically. UK manufacturing was depleted, and Lansing Bagnall’s order book was worryingly empty. But the new management didn’t follow accepted British wisdom and cut to save costs.

In fact, they brought me – as well as redeploying much of the existing workforce to modernise and streamline their manufacturing processes.

When better times returned – as they always do – Lansing Linde was in a far more competitive position, able to quickly response to increased demand with a better product offering. Instead of contracting during the difficult times, they pivoted, strengthened and future proofed their business.

It taught me that so much of what we think of as ‘fact’ is actually culturally determined. The Germans had an entirely different view on how to respond to downturns. And yet even all these years later, many British industries are sticking to the bad old ways.

The airline industry has suffered huge reputational damage after firing during the pandemic – and being left completely unable to properly redeliver when demand increased.

I’d argue that Warren Buffet – who once famously said, “Only when the tide goes out, do you see who’s been swimming naked” – should have included the tide is coming in as well. Fail to prepare for the eventual upturn at your peril.

So how do we create this kind of culture shift? Because make no mistake – that’s what it is. What I’m talking about is a move away from businesses being led by a short-term, one-dimensional, sense of the bottom line to a longer, more expansive, view of their profits and processes.

We are increasingly understanding of the critical importance of the human element to a business. It’s no longer simply about hitting targets. We have a far more nuanced understanding these days of the impact our people have. We are more accepting too of our environmental considerations.

But we must start to interweave our financial strategies for economic downturns with a vital people element too. We must recognise the critical need to protect and develop a workforce even in the leanest times.

Who best to argue this? HR leaders. 

Currently, however, HR has very limited representation at the top of corporate life with limited opportunity to input strategically at board level. All too often, HR is used as a reactive tool to grow or shrink a workforce depending on the economic climate.

But it’s time for HR leaders to play a far more active role in corporate strategy and exert sufficient influence over board decisions to allow us to flatten sharp upward, or downwards, curves.

Mike Beesley - War on talent

I have seen in my own businesses that investing in your people creates long-term financial growth. When the banks crashed in 2008, it had a huge impact on the recruitment industry.

But while competitors followed accepted wisdom and sacked people, we made the decision not to. We knew that our people were our USP. They defined us. When the market came back, we were in a better position to respond to it and experienced exponential growth as a consequence.

I understand of course that this is easier said than done. Most businesses are there to maximise shareholder return – and to do that will cut costs.

But we must somehow, through conversation, consultation and advocating for our key role in business – at even the highest level – start to shift the dial on this conversation.

We have to start with ourselves though. It’s not just businesses who are too reactive – it’s HR departments too. We are understandably caught up in the here and now, but must begin to plant far deeper roots in our thinking.

I suspect however that in our industry, as in many others, there is a reluctance to confront reality. We get too caught up with today’s buzz words but need to look back and learn in order to stop making the same mistakes again and again.

Firing up high – draining the most expensive expertise and knowledge out of your business – will leave you exposed financially in the future as you rush to hire expensive contractors to fill the gaps.

But firing down low – getting rid of your youngest, cheapest talent – will also ultimately fail. You’ll experience reputational damage, lose vital time in developing that talent and may loose many as they pivot away from your industry into a new one – and be lost forever.

On every level, we must start to dare to do things very differently. Protecting our people – and businesses – into the future.

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