Flying-blind: navigating the EU referendum fog

I’ve started to think that 2016 will probably be remembered as the year of uncertainty: when environmental, social and political forces demonstrated just how complex and hard to predict they really are. It is also likely to be viewed as the year we were realised just how poor we are at living with uncertainty, as individuals, organisations and governments we don’t prepare well enough. We work within severely limited horizons. Scholars of the future will no doubt point to the “weak signals” which if received would have highlighted the scenarios which with hindsight become so clear. That is little help today though, when we’re trying to navigate what feels like an increasingly complex and noisy situation. A complex environment which, by the way, is the world in which we have always lived. Incredible that we’re so surprised that reality really is rather complex!

Take for example the outcome of the recent EU referendum in the UK. Post-event the media has already started to dissect the signals, to take a birds-eye view. Our organisations sometimes do the same post-event (Salz post-LIBOR is one example of this). Doing it this way around is costly though (the direct cost of LIBOR was upwards of £325 million in fines for Barclays, and countless more in brand damage). We don’t do enough with our data to anticipate incoming threats and prepare for their impact on our business models and our people. This is certainly true of our post-EU referendum organisations.

We recently explored the sentiment of business pre and post polling day in our Labour Market Outlook survey and the findings show just how unclear we are to the impact of the referendum on our organisations. For example a third (33%) of professionals surveyed expect that there will be an immediate impact on their costs, something which they’re now having to plan for. The data, which we have cut in our analysis to show employer views pre and post referendum also shows that organisations have become more cautious about hiring, and are changing their approaching to training and developing their workforce. In fact, one in five (21%) expect that post referendum their investment in training and development will shrink. Given that this could be a direct hit on the human capital potential of their organisations, its concerning that the reaction to an unclear threat is to divest in such an important asset to the business. Surely to prepare for what could be a very bumpy ride we should be investing in our human capital.

If the data is everywhere we need a simple way of extracting and understanding it which can be applied by both HR and finance professionals. Complex data requires a consistent approach that works in practice, not something highly academic in nature - this is why we’re building the Valuing your Talent framework, a set of human capital measures that organisations should aim to measure and report on so to understand the complexity of their people and human capital. By applying measurement systems to our organisation and collecting some of the data we propose on the framework it’s possible to explore some of the significant risks and opportunities that our organisations face. And there are also a set of interesting case studies, from the likes of Asda and Capgemini describing how some leading organisations are approaching human capital measurement and reporting.  

The challenges that we face post-referendum are slowly revealing themselves to us, and as the Labour Market Outlook shows, there is definite cause for concern across the profession. I can’t help but think that if we were more able to plan and use our people data effectively some of the more reactionary impacts of the vote may not be so severe, and our outlook on risk would instead be one of opportunity. To approach the complexity of the world of work not as one of risk, but something that drives us to innovate, explore and grow is something all organisations should be striving for.

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