4 - HR strategy through a risk-optimization framework

Summary

Previous chapters have explored fundamental issues associated with strategy in general, and HR strategy in particular (Chapter 1), features of the external environment that underpin business and HR strategies (Chapter 2), and the multiple levels of HR strategy and its connections to the organization and to the surrounding environment (Chapter 3). This chapter focuses more explicitly on mitigating, managing, and optimizing human capital risks, and then incorporating these considerations into HR strategy. The risks associated with managing talent are becoming more and more obvious to decision makers, as the following sections illustrate. We begin our treatment by considering a 2011 report from the Boston Consulting Group and the World Economic Forum that focuses on global talent risks.

These risks comprise looming talent and skills scarcities that threaten the strategic initiatives of companies and governments everywhere. The report proposes seven responses to global talent risks – blueprints for action on how to attract, move, develop, diversify, and retain talent. They are as follows.

1. Introduce strategic workforce planning: model the labor supply and demand for different job families to understand current and future imbalances and to develop strategies for addressing them.

2. Ease migration: innovative, points-based migration systems and “migration-friendly” branding by governments and companies are necessary to attract the right talent globally.

3. Foster brain circulation: develop strategies to turn brain drains into brain gains as students and professionals come home to apply skills learned abroad.

4. Increase employability: increase employability – of the current as well as the future workforce – through education systems that include practical and theoretical skills, lifelong learning, and upskilling.

5. Develop a talent “trellis”: talent development is key to ensuring a sustainable pool of highly skilled people. Focus on evolving from career tracks to a trellis, building the skills required for the jobs of tomorrow and offering vertical and horizontal career and education paths.

6. Encourage temporary and virtual mobility: do this through short-term work or study in another location (temporary mobility). A networked world enables virtual mobility, allowing individuals to carry out their professions regardless of their locations.

7. Extend the pool: this can be done by tapping into the skill sets of women, older professionals, the disadvantaged, and immigrants. Easily available childcare, flexible work schemes, mentoring and advisory roles, together with improved options for licensing and recognizing credentials, are solutions to the barriers that these groups face.