HR leaders face a barrage of uncertainty as we settle into 2024, from a potential recession to a presidential election that may spur louder employee activism. And, of course, there is the constant question of whether employers or employees have the upper hand in the labor market.
“These are the most uncertain times, unlike any we’ve seen in the past. We’re still dealing with health issues from COVID, the wars in the Middle East and Europe, protests all over the world and an election coming up that will likely be the weirdest in our lifetime,” says Dan Kaplan, a senior client partner with consulting firm Korn Ferry. “And for the last 18 months, experts are predicting a recession—and [other] experts are saying we’re going to avoid a recession. Companies are slashing spending because they expect a recession, then hiring because they think they averted it.”
These uncertainties are creating tectonic shifts for HR leaders—which, at times, might be putting them at odds with employees, leaders, boards of directors and CEOs. Navigating these relationships, particularly with senior leadership, will require HR leaders to lean into new skill sets and strategic savvy, experts say, to ensure the workforce and leadership can thrive through uncertainty.
HR’s job is to be the “consigliere to the CEO and leadership team,” Kaplan says.
“You are their sounding board, their resource, the one person in the room who’s speaking truth to power,” Kaplan tells HRE. “CEOs typically live in an echo chamber where everyone tells them how smart they are because they are either afraid of the CEO or vying to be on the succession chart. It’s HR’s job to tell the emperor when they have no clothes.”
Take economic uncertainty, for example.
“We’ve been riding this wave up and down on whether we will have a recession, and part of HR’s job is to have a tough conversation with the CEO and CFO,” Kaplan says. “‘Do we really need to cut to the bone? Can we postpone cuts for another quarter or two if the business is holding strong?’”
Giving such feedback can be tough, says Kaplan, who notes that HR executives can flex this muscle by starting with smaller, lower-stakes conversations.
“It has to feel right for you,” he says. “Some [HR leaders] can give really tough feedback that hits the person between the eyes, and others find it will never be the right approach for them. For these HR leaders, maybe a more nuanced delivery of asking questions speaks to their style.”
Regardless of communication style, the ability to have tough conversations is central to an HR leader’s role, particularly in the current climate, he notes.
“I’ll ask [CHRO] candidates the last time they couldn’t hold down their breakfast because they knew they were going to have a conversation with CEO that could likely get them fired,” says Kaplan, who recruits HR executives for various companies. “And if they don’t have any meaningful examples, they’re not right for what most companies are trying to deal with these days.”
Embrace uncertainty
HR leaders who are accustomed to being rewarded for having the answers may find it more difficult to embrace uncertainty, but finding comfort with the unknown is a key step all leaders need to take, Rebecca Zucker, an executive coach and a founding partner at leadership development firm Next Step Partners, tells HRE.
“As you get more senior, you deal with more complexity, and it makes it more difficult to have the answers,” says Zucker, author of the Harvard Business Review article 6 Strategies for Leading Through Uncertainty.
“I think there is less of an expectation to necessarily have [answers] but instead to be able to navigate through uncertainty and highlight what are the different options.”
Develop multiple scenarios
Scenario planning is a way to create a guidebook to rely on if something happens outside of your master plan, says John Lykke Nielsen, an international business strategy and people empowerment leader. LinkedIn recently published his article on the topic, Embracing uncertainty in 2024: The power of scenario planning in navigating unpredictable times. Scenario planning also helps HR leaders be more adaptable and resilient, key in uncertain times.
To effectively scenario plan, Nielsen advises, HR leaders should stay tuned in to global trends, analyze how those developments could impact the workforce and then spell out specific scenarios, with strategic responses to each. Ensure the strategy is flexible, he says, and review and update scenario strategies as new information emerges—at least every quarter. Importantly, engage multiple teams in scenario planning.
Nielsen offered an example from his role as a regional director and chief operating officer for a construction and civil works company in Europe.
Based on reports of a tight labor market in the construction business in Greenland, he developed several scenarios of how his company could fill the talent void. The strategy the business ultimately leveraged was hiring from outside the company’s normal recruitment area. The company dipped into Sri Lanka’s talent pool because many workers there had experience working on big construction projects in the Middle East.
“Scenario planning is a real powerful tool that can bring together different departments from an organization and give them a sense they are being listened to,” Nielsen says. “It’s a way to really use everyone’s knowledge.”
Differentiate between complex and complicated challenges
When leaders view a problem as complicated, it implies there is an answer that can be figured out, says Zucker. However, a complex problem can have many variables, which multiplies the challenges exponentially, she adds. As an HR executive, it’s important to know the difference between the two to suggest whether the organization needs an outside specialist to tackle the complexity of the problem, Zucker notes.
Appreciate imperfection
Aiming for perfection is fruitless but aiming for progress is productive, Zucker says, an idea that becomes especially relevant in uncertainty.
“I think part of being a senior leader is discerning when good is good enough. When is 80% good enough? And when isn’t it?” she says. “You need to choose where you spend your time and what problems you’re solving. You need to be strategic about that decision.”
Avoid oversimplifications and quick conclusions
Leaders, particularly high achievers, tend to lean toward taking fast action by oversimplifying a problem or drawing a quick conclusion, Zucker notes.
“The temptation is to come to a quick answer that brings closure, so you can get it behind you and focus on other things,” she says. However, today’s uncertainty means that challenges are ever-changing. So, what might be the right answer today may not be tomorrow.
Make trust your North Star
If HR leaders focus on building trust with their employees and creating a culture of trust, it can smooth the path as they navigate uncertainty, says Rubab Jafry O’Connor, a professor of management at Carnegie Mellon University’s Tepper School of Business.
“Even when we have these uncertain times, people would have buy-in more easily when there is trust,” O’Connor tells HRE. “This can help HR leaders manage the uncertainty of a situation a little better.”
Enlist others
HR executives shouldn’t operate with the belief they need to navigate uncertainties alone, says Zucker. This will create greater obstacles, as most organizational challenges—and the solutions needed—are largely intertwined, she says.
During times of uncertainty, HR leaders should reach out to their network for insight and perspective. “[By] getting people together—whether it’s from various functions within HR, different functions across the company or even outside the company—you’re getting multiple lenses on the problem to see what you are not seeing,” Zucker says.
Take a step back
When examining a shifting landscape, HR should take a seat in the balcony versus in front of the stage, Zucker advises.
Stepping back affords HR leaders a panoramic view of what’s happening within and outside of the organization, gaps in strategy, where resources are unevenly distributed and more, rather than simply what is immediately visible, she notes.
“Uncertainty naturally causes a lot of anxiety for people, but there is also a lot of opportunity in uncertainty,” Zucker says. “Being able to recognize it for what it can be is a real skill and something that can be developed over time.”
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