The virus shook HR this year, and 2021 looks like much of the same. Unfortunately, most leaders at large to mid-sized companies still use temporary solutions to “fix” the issue of unpredictable hiring cycles. Rapid hiring, rushed layoffs, and changing demands all mean that businesses spend money, time, and resources reactively. And, as the pandemic accelerates the timetable of these changes, many look for ways to gain a proactive edge over and above uncertainty to safeguard their operations from unexpected fluctuations. Businesses are finding that the typical and traditional approaches of reactive hiring and layoffs to meet business demands are not responsive or flexible enough to cope. They see urgency in the need to develop or find solutions that can respond to these cycles quickly and dynamically. One prominent response has been to retain a HRBPO to outsource HR functions, hiring, and employee benefit administration since it offers significant cost savings to their mid-sized and large businesses.
Let’s bring clarity to HR professionals and c-suite leaders through this deep examination of the problematic cycle of hiring that resists the usual interventions, especially in light of the present global health concern. We explore the cycle of hiring problem as uncertain, complex, ambiguous, and always volatile, seeking an answer to the puzzles and paradoxes it poses for HR managers. Read on to learn the depth of the hiring and layoff problem and to explore what remedies are available to you.
Four Elements of the Vicious Cycle of Hiring Exposed
One of the best ways to reveal the problem of the cycle of hiring is through COVID-19, a great accelerator of issues that already existed—to some degree—for HR professionals and leaders. From the beginning, the demands of hiring have changed from time to time to meet scaling (or shrinking) business needs as well as unavoidable changes in economic conditions.
But, we see that incredible flux and stress has been introduced by the pandemic, speeding up the frequency and severity of these oscillations. As a result, the nature of the cycle of hiring as uncertain, complex, ambiguous, and volatile is exposed.
Hiring is always under a state of transition, moving up and down to meet all kinds of variable, unstable factors. Now, this is more obvious because the pandemic presents a cloudy future that is hard, if not impossible, to predict.
When it comes to COVID-19, at least three possibilities present themselves for businesses and HR departments to understand. In one, a national lockdown and stricter mandates occur as a result of political winds changing direction and public dangers increasing as the virus shows no remorse. This would shrink hiring for many industries and require HR to react with quick layoffs in addition to other sweeping changes.
An alternative is that a vaccine is introduced that could return business to normal as shopping, entertainment, productivity, and life regenerates following new stability and safety. In this scenario, HR professionals and leaders would need to scale rapidly to meet swift flux in purchasing and engagement with their product or service. (Of course, a vaccine could equally or eventually fail to be effective at neutralizing coronavirus, meaning companies would need to urgently backpedal those same hiring increases.)
And, in a perfect world, the third possibility might be that everything improves from here. The response would be to hire as quickly as possible those that have dropped out of the workforce so that we can experience a rejuvenated economy and take full advantage of gains and growth.
The future is uncertain, but the condition of the cycle of hiring is not. It betrays itself as deeply unstable and reactive to forces both within and outside company control. The solution for HR professionals and leaders can, therefore, not be temporary or dependent on factors that are always undergoing transition from one extreme to the other. Instead, the realization should be that a mid-sized to large company must take a proactive and anticipating strategy toward HR functions and hiring patterns, one which can easily and quickly scale to maintain optimal business performance such as with a HRBPO.
Even as the future of hiring is shaky and indeterminate, there are more complexities within the problem of reactive hiring cycles. Again, the pandemic puts in bold these underlying complications.
In a few short weeks, coronavirus crushed businesses of all sizes, but in some sectors it increased demands. They had to respond by encouraging and formalizing work from home policies, introducing hiring freezes and furloughs, and many more reactions from HR professionals.
In fact, in a recent survey conducted by Future Workplace, over 300 HR professionals and leaders explored the question of how the pandemic has impacted massive transformation. The primary change they cite is an increased demand for investment in remote work and training. Around the world, companies are enduring coronavirus by implementing flexible arrangements for working from home. It is quickly becoming an expectation that hiring too becomes remote as stricter mandates and safety measures seek to limit exposure.
For HR, this means that companies are dealing with the need for remote work with various training and organizational changes. They are having to develop onboarding practices and education that can operate remotely in short order. They must focus on supporting remote workers to focus on wellbeing, conducting virtual meetings, and being transparent while communicating frequently with workers. As a result, they need to invest in new tools and technologies to facilitate such alterations in the function of work management.
HR professionals as well as corporate leaders are confused by the ambiguous needs of the new workforce. They ask themselves, “How can I lead my organization to HR success over the coming years, virus or no virus?” While experts outline different best practices for maintaining the well-being of the workforce, preparing for a blend of AI-driven automation and human work, and even expanding the role of HR at companies to include these changes, it’s certain the coming years will introduce vast redefinition.
Most recently, the sudden pandemic has made these ambiguities more pressing. Finding a permanent solution, at first, seems impossible when so many possibilities for the future of hiring and work present themselves, but many have found a permanent solution to the indeterminacy that always exists in the hiring and HR cycle. One of these permanent solutions is deferring the role of HR administration and benefit offerings to a third-party HRBPO whose sole responsibility and competency lies in its ability to scale with businesses and cut costs by charging fees on a per employee per month basis.
Just as the technologies that many large companies already rely on to function come as a subscription, the monthly- and user-based model works well for them. They no longer need to worry about how the demands of their HR department will change or how they will need to handle varying levels of hiring or furloughs because the third-party is designed to deal with these uncertainties. In effect, these companies who outsource HR spend more of their time on core business functions and perform better overtime by cutting costs without sacrificing their efficiency and capabilities. It removes the issue of ambiguity at the source, and it is not just a response to the COVID-19 crisis but rather the nature of the issue of the hiring cycle.
Perhaps the most incredible problem that coronavirus seems to introduce is the frequency with which the virus changes the conditions of hiring and HR. Already, companies have had to adapt to remote hiring, interviewing, and onboarding more rapidly. But, most companies were moving toward these cost-saving strategies already since they save time, employ cutting-edge technologies, and can be automated easily, helping to boost the bottom line.
The disruption to organization has merely picked up the momentum of an issue that always exists in HR administration and the hiring cycle. Not only has it cut the amount that companies want to spend on HR functions, but it also must respond to sometimes strained hiring and immediate layoffs. As teams often shrink, the need to handle and process paperwork, meet requirements, and give security to their workers only increases for those HR professionals and leaders who remain.
Leaders must get the jump on these stressors by working quickly to implement solutions. Many opt to use a HRBPO to outsource the HR function totally to save time, cut costs, and still meet the remote demand, paying only for what they need on a per employee and per month arrangement. In part, this response is well-suited because the primary upset is that remote work could become permanent, and many are not ready to support it in-house.
Temporary “Fixes” and Permanent Solutions to Naturally Unstable HR Cycles
As HR managers and corporate leadership face the volatility, ambiguity, complexity, and uncertainty of the hiring cycle, they must act quickly. Weigh these three major options for redesigning your HR functions that the new world workforce increasingly dictates.
HR departments and their leadership can, first of all, choose status quo. They can hope to endure the changes that coronavirus emboldens while ignoring the underlying truth that instability always exists within HR, hiring, and benefits. As a result of doing nothing more than responding to hiring bursts and furloughing tremors on a case by case basis, they will lose money, time, resources, and talent because they cannot anticipate or scale while on shaky ground.
Conversely, they can seek to implement best practices according to the latest trends by keeping their finger on the pulse of HR evolution in the time of coronavirus and beyond. Many organizations think they are already taking this strategy and doing their best to create an exemplary place to work that is cost-effective and focused on profitability.
The problem is that their teams are overworked as they seek to process applicants, onboard hires, update procedures, implement technologies, administer benefits, adjust responsibilities, and even more with ever-increasing speed and flexibility. Honestly, it is too much for organizations with 75 to 4,000 employees because they have fewer resources to expend than extremely large corporations and competitors who never miss a beat.
For employees, this approach means that they are frustrated, tired, overworked, and unhappy with the organization’s response (if there is a response at all). The overwhelming need to manage internal as well as external challenges such as safety and remote access means that leadership concedes in the war against HR flux, losing employees, advantage, and profits in the process. In a recent study, the Institute for Business Value at IBM found that employee satisfaction has been neglected even as safety and flexibility have been prioritized.
Executives and HR leaders only think that things are going well. Most believe they are supporting their employees, but the vast majority of employees disagree. Most concerning of all, the customer experience has been directly impacted by a lack of engagement from remote employees who feel they are not properly supported by HR and other departments.
The third option is to address these gaps. The most forward-focused companies admit that HR functions require the devoted attention that only third-party HRBPO partners can offer. By forming a contract with an outside provider and transferring the responsibility of some or all HR functions, companies free themselves to focus on more strategic initiatives and core business needs. The reality is that HR functions are one of the first departments to experience outsourcing as a benefit, saving costs when they choose an experienced and competent vendor that will finally make employers and employees happy with performance. Improvements are generous when HR modernizes itself through operating as a subscription service.
Leadership gains the ability to access special HR expertise, complete regulation requirements which change every year, and speed their response time in areas like hiring shifts, payroll, and benefits enrollment. Technical challenges, equipment needs, and program management hassles are also avoided since the third-party takes responsibility for HR seamlessness.
The Future of Hiring Cycles: HR Trends for 2021
In 2021, leadership and companies will endure shockwaves from the pandemic as well as the HR consequences of the 2020 election.
It’s likely that the new year will merely revisit the same tests that HR departments always face: changing government-mandated requirements, altered tax rates and reliefs, environmental impacts from the economy, as well as shifting moods of employees and their expectations of employers. So, the issue of unpredictable hiring cycles is and will be unchanged—only escalated.
The prediction is that more mid-sized and large organizations will choose an HRBPO subscription model for their HR functions (in whole or in part) to sustain themselves, remain competitive, and cut costs. More and more are already admitting that their employees and goals are best supported by the focused and remote solutions of third-party vendors of benefits, payroll, hiring, and more.
If your company with 75-6,000 employees seeks to modernize your approach to HR functions and administration to cope with coronavirus and a vicious hiring cycle; are ready to discuss the best way to outsource your HR department responsibilities; relieve the pressure of the pandemic; and the stress of shifting business demands.