The challenges and opportunities resulting from economic change are the most common drivers of change in UK organisations, according to the CIPD’s latest People Profession 2020, survey conducted in collaboration with Workday.
Economic uncertainty is top of mind for both in-house people practitioners (40%) and independent HR practitioners (45%). And, given the survey was carried out between January and March 2020 before the global effects of the COVID-19 pandemic became clear, we can expect economic change to be even higher on the agenda now. UK organisations have long faced limited growth opportunities, lagging productivity and stagnant wages. Now the pandemic, coupled with the end of the transition period for the UK’s departure from the European Union on 31 December 2020, means businesses can expect prolonged economic instability.
To meet these challenges, organisations will need to strengthen their financial, operational and workforce resilience to be in a better place to meet future economic change. For, while COVID-19 and Brexit are likely to shape the global business context for some time, economies will eventually recover. But doubtless then another threat will emerge. Given this world of constant change, Peter Cheese, Chief Executive of CIPD, points out that 'people professionals are a vital function in supporting businesses to adapt to the rapidly changing circumstances'.
It’s therefore important that people practitioners remain constantly aware of the economic environment and look ‘upwards and outwards’ from their organisation. Business acumen – understanding your organisation, the commercial context and the wider world of work – is a particularly important capability highlighted in the CIPD’s new Profession Map. Responding successfully to economic change requires agility. We have already seen how business leaders and people practitioners can radically change in a remarkably short space of time in response to COVID-19. But even before the pandemic, our survey shows that industrial change and organisational agility is recognised as a key driver of change by 34% of in-house professionals and 40% of independents.
Yet, in the CIPD’s survey of business leaders, only a third said they believe their HR/people team helps their organisation to be more agile and less than a quarter believe their HR/people team displays adaptable behaviours.
These in-demand capabilities of organisational development (OD) and change management are key areas for HR improvement to rectify this disconnect. Being able to think in and act in an agile manner is an area that people professionals must prioritise to survive in times of economic crisis. Adaptability is an element of OD, a specialist knowledge area in the Profession Map, and requires access to data and evidence to better inform practice decisions. Change management is a key knowledge area in the new Profession Map.
To be better prepared for continuous economic change, we suggest HR teams consider the following questions:
- What steps do you take to fully understand your organisation – its strategy, product/services and customers?
- How do you use financial and commercial information to inform your work?
- Is the people strategy aligned to the wider business strategy to support this and influence the wider success of the business?
- What methodologies are in place to support change in your organisation?
- When did you last carry out assessment to understand the people impact of change?
- Which levers are most used in your organisation to deliver change?
- What others could you use?
- How well does your OD&D team or external consultant deliver and enable different types of change across the organisation?
With economic challenges set to dominate boardroom discussions for the foreseeable future, people practitioners should look at the economic context within which their organisations operate in, the resilience and stability of the business, and the leadership capability in place to support the business through change.
Just a few months ago we could not have imagined business could adopt huge change almost overnight. As organisations continue to face prolonged uncertainty, our tools and resources can help you integrate priority areas such as organisational agility and change into your practice to equip people functions to deal with today’s – and tomorrow’s – economic crises.
