At this stage of the COVID-19 outbreak, organisations are dealing with two equally important factors—namely, keeping employees and their families safe, and business continuity while preserving operations as best as possible.
But eventually, the virus will end. And when it does, organisations need to be ready. Certainly, in today’s turbulent world, some of the business community have gotten better at planning for and mitigating against risk in the face of a crisis. For many others, however, this is a time of confusion, paranoia, and rash decision-making. Here’s our advice on how leading organisations should be thinking about managing their talent over the next 12 critical months.
A year of two halves
Without question, this year will test not only the leadership acumen of senior management, but also the ability of organisations to operate through ambiguity, with the need to balance empathy with business continuity and the ability to rethink what “performance” means in the post-coronavirus world.
We believe that 2020 is likely to be a year of two halves: the first half will be spent dealing with safety, containment, continuity, and contingency planning. And rightfully so, dealing with the crisis and its ramifications is job one for every organisation right now. This is a time for calm, prudent leadership. To paraphrase Napoleon: in times of uncertainty, define reality and provide hope. When there is fear, it is the job of the leader to demonstrate compassion, set direction, and get people focused.
Organisations need to show empathy, build trust with employees and customers, and, above all, be as collectively united as possible. Although the two halves of 2020 will look very different, it is impossible to do well in any cycle without thinking about and planning for the next one.
In dealing with this crisis, organisations need to think differently about performance and target setting than in the past few “business as usual” years. The focus right now is on preservation, taking market share, and being nimble. Acting as one team, in a fight for survival, will be a better approach than encouraging employees to carry on alone. The weighting assigned to individual objectives should give way to collective, shorter-term team-based targets, the notion being that the whole is truly greater than the sum of its parts.
Communicative, action-oriented leadership is necessary during this period. During a crisis, leaders must show unyielding empathy and commitment to their team. People need to know that even though the leader is employed to manage and run a business, he or she is also a human being, someone that cares for them and understands what they are going through. The leader must lead from the front, exhibiting the values and behaviors they expect from the team.
Rewards and reward systems can also be an important tool during these times. Our advice would be to move toward two separate performance cycles for 2020. The first should emphasize stability and preservation in the short term, and then once conditions return closer to normal, a second cycle should focus on driving the longer-term strategic agenda.
During periods of economic instability, we recommend organisations use the time to review and enhance these areas:
- Driving efficiency and organisational design models, and deploying more agile operating methodologies.
- Training and developing hard and soft skills, so employees are ready for the rebound curve.
- Recruiting key roles and identifying incumbent future leaders/high potentials.
- Reviewing performance and reward systems, both for short-term team-based goals and improvements to overall performance-driven incentives.
The second half
Organisations that can keep their employees engaged and motivated during the first half of 2020 will be well positioned to take advantage of the pent-up demand in the global economy in the second half. Three key areas will be critical to growing and gaining market share: incentives, recruitment, and leadership.
Initial projections from the 2020 Korn Ferry Annual Salary Survey indicated an average increase of 5.3% in the APAC region this year, or 3.1% when adjusted for inflation. In the wake of the coronavirus outbreak, however, it is quite possible to see a 1% to 2% point decrease in initial projections across different markets/geographies. China, Singapore, Hong Kong, and Korea may be affected the most as part of this revision. One way to counteract that possibility could be to move compensation and rewards to a team-based approach in the short term.
Additionally, Richard Ferry once said, “In difficult times, there is always a flight to quality.” During a crisis, organisations have to remain forward-looking and differentiate between high performers and others. In a survey of human resources professionals we conducted in February, 26% of respondents said they would adjust salary and incentive targets in the wake of the coronavirus, for instance, highlighting the importance of retaining top talent during this time. This could lead to a situation where average pay remains stagnant but the market value of top talent becomes even more expensive than what it was before the outbreak.
This should not preclude organisations from making a concentrated effort to take some judicious bets to attract top talent from the market as well. Consider that 56% of the HR survey respondents said their enterprises decided to postpone recruitment plans. For some organisations, that could represent an opportunity.
There’s no doubt that leadership will play an even more vital role than usual as organisations navigate through the challenges and opportunities presented by the coronavirus outbreak. It is important that leaders be agile and not cling to one way of doing things. Indeed, it is likely that different leadership styles will need to be adopted as the year progresses through different stages. Right now, for instance, an affiliative and participative style of leadership, where decisions are made through consensus and based on relationships, may be best. In the second half of the year, assuming the virus runs its course, a pacesetting, “run fast and keep up” style, or a more directive “here is what we need to do to make up for lost time” approach may be in order.
Whether we’re confronted with digital disintermediation, climate change, or infectious disease, the VUCA world is here to stay. For organisations to maintain any level of sustainable success, they must learn to operate in ambiguity and constant disruption. Building a culture that not only tolerates this climate but also thrives in it will separate the winners from the losers.
Organisations that come out of a crisis stronger typically have leaders who drive change around how they operate, how they engage employees, and how nimble and flexible they are in focusing, engaging, rewarding, and retaining their people.
Join Mike Distefano, Korn Ferry’s President for Asia Pacific, as he'll discuss with our expert panel what organisations need to do now to navigate the COVID-19 crisis and prepare for the inevitable market recovery. Thursday, 2 April 2020. Register now