Traditionally, two types of economic cycles have alternated in the economy: the expansionary cycle and the counter-cycle or recessionary cycle. The dynamic seemed simple: after a growth cycle in which investment and the acquisition of resources are recommended, a period of degrowth emerges in which theorists suggest divestment in non-strategic assets and debt reduction.
This classic model worked for a long time and favored both of our organizations: while in expansive stages organizations tend to incorporate more talent and invest in training and development, in recessions early retirements, dismissals and outsourcing of operations become important.
- As a particular case, it is important to note that selection is a fairly indicative indicator of the economic cycle. It is reactivated in the final phases of contractionary cycles and tends to lose momentum somewhat earlier than the main economic indicators, in an inversely proportional relationship to the EREs.
These were, roughly, some features of how the HR consulting sector worked until very recently. But… Does this situation respond to the current reality? Can we continue to build on these ideas?
For some years now, especially since the crisis, the HR sector has become atomized and competition has increased exponentially. Turnover, workforce restructuring, new competitors, technological tools, freelance… all this has turned our environment into a VUCAH environment:
- V for volatility
- U for uncertainty
- C for Complexity
- A for ambiguity
- H for Hyper-connectivity
And in this new environment, increasingly volatile, technological and hostile, economic cycles are increasingly shorter and more irregular, so we will be less and less able to recognize them. We will witness cases in which our clients are in full expansion in a saturated environment and vice versa, the incorporations will coexist with the dismissals and three values will progressively gain importance: agility, cost and innovation. Constant innovation, in tools and processes, to remain competitive and agile.
Therefore, we must make an effort to sharpen our sensitivity to what is happening in our customers and what they may need. We can be antennas that identify new business opportunities of our own and crossed and thus weather volatility.
If we achieve this, we will be able to get the most out of the Psicotec-Gestolasa Alliance whatever the cycle we are in.