I recently had the opportunity to circle back to a topic that occupied my mind as Chair of the Human Capital and Remuneration Committee of one of Africa’s most complex organisations: human capital challenges now and beyond. This trip down memory lane was triggered by a panel discussion on the topic at the IIA Mauritius’ annual conference. I had the good fortune of sharing the stage with people who have clearly applied their minds deeply to the topic.
A simple fact is that an organisation can have a compelling strategy, a reassuring workforce dashboard and a succession chart filled with names, yet remain dangerously vulnerable without the leadership being aware of the vulnerability. Among the questions I explored during a panel discussion at the conference are:
- The people delivering critical work may sit outside its employment structures.
- Essential knowledge may reside with someone whose absence would bring operations to a halt.
- The capabilities needed for tomorrow may be eroding while leaders remain satisfied with today’s performance.
Although the discussion included the assurance implications, the responsibilities extend across boards, executives and HR. Human capital resilience depends on how these role players understand the workforce, distribute accountability, and prepare people for change.
Three challenges deserve particular attention: responsibility across a blended workforce, continuity of critical capability and knowledge, and the fairness of workforce transition. Together, they require a broader view than headcount, employee costs and annual succession reviews can provide.
When the employment boundary becomes a responsibility gap
There was a time when most organisations operated within fairly contained walls. Today, however, many depend on a combination of permanent employees, contractors, outsourced teams, independent specialists and platform workers. In this context, a person’s employment status may tell us surprisingly little about how critical their work is to the organisation’s success. Yet governance arrangements often follow contractual boundaries. In other words, business leaders understand their accountability for employees, procurement manages the supplier relationship, and the provider assumes responsibility for its own people. The risk therein is that each part may appear adequately managed while significant gaps remain between them.
In walks the ethics Achilles heel, as organisations become blind to how far their responsibilities actually stretch. For example, an organisation may specify delivery targets without adequately examining how those targets are achieved by the service provider. It may insist on ethical conduct from employees while overlooking or being completely blind to how the pressures imposed on outsourced workers could result in unethical behaviour. The flaw is in the design. For example, it may have a credible speak-up mechanism that people working through third parties cannot access, or do not trust.
Service-level agreements do help to establish expectations, but they cannot substitute for oversight of the full working relationship. Nor does a shared values statement demonstrate that ethical standards operate in practice. And, simply terminating a provider after misconduct does not repair the harm or explain why warning signs were missed. It is therefore critical that the employment boundary must not become the ethical boundary.
Boards should ask whether the workforce model is appropriate for the organisation’s strategy and the criticality of the work. Executives should be able to explain who remains accountable when work crosses organisational boundaries, including through subcontractors. HR brings expertise concerning working conditions, capability and fair treatment, alongside procurement, risk, legal and operational colleagues.
The choice to outsource should therefore include more than a comparison of employment costs. Leaders need to consider dependency, knowledge loss, continuity, supervision and the potential human consequences of the arrangement. Differences in employment relationships may justify different processes, but should not provide an excuse for abandoning ethical expectations.
Replace succession lists with capability continuity
I have long preferred the language of leadership and critical skills continuity to a narrow focus on succession planning. The terminology matters because succession planning can become an exercise in identifying who might replace a senior leader when that person leaves. That is too limiting a lens. Continuity asks a wider question: can the organisation continue to function when a critical person becomes unavailable, whether temporarily or permanently?
That person may be an executive, but could equally be a specialist who understands an ageing system, a technician whose judgement keeps equipment operating, or an employee who holds relationships and institutional memory that nobody has documented. Position on the hierarchy is an inadequate measure of key-person dependency.
Identifying these concentrations requires leaders to trace the work itself. What would stop if this person were absent tomorrow? Which decisions would become unreliable? Who understands the exceptions, workarounds and historical reasons behind established practices? How long would it take someone else to become competent?
At Eskom, our discussions included key-person dependencies and the use of cross-functional talent boards to examine development and readiness. Those conversations were valuable because continuity requires ongoing attention. A name on a chart does not demonstrate that someone is prepared to act, make difficult decisions or perform under pressure. Organisations need immediate cover, a developing pipeline and deliberate knowledge transfer. Cross-training, acting opportunities, mentoring and documentation each have a role. Documentation alone cannot capture every aspect of experienced judgement; people also need opportunities to practise and learn alongside those who hold the knowledge.
Retention remains important, but retaining a person indefinitely is an insecure continuity strategy. The organisation should reduce its vulnerability while treating the individual fairly, rather than making that person permanently responsible for everyone else’s dependence on them.
Do not allow indispensability to weaken accountability
There is an uncomfortable ethical dimension to capability continuity. What happens when the person holding critical expertise must face disciplinary action? I have firsthand experience of the operational gaps created when action against people in critical positions was insufficiently supported by continuity arrangements. It is not a comfortable space to be in. Especially not when it could have been foreseen. This does not mean misconduct should be tolerated. It means leadership must prepare for foreseeable absence before a crisis forces the issue.
An organisation should never become so dependent on an individual that enforcing its standards appears operationally unaffordable. Keeping a delinquent individual on just because their exit would create a crisis may, in itself, create an ethics crisis and have an impact on how employees view the organisation’s ethical standards. Boards should therefore examine whether continuity plans work under difficult conditions, including sudden incapacity, dismissal and several departures occurring together.
Executives need to ensure there is evidence of readiness, and that the evidence puts both them and the Board in a position to exercise their fiduciary duty effectively. For this, they need support from HR, which should help build credible development and retention processes, with transparent criteria that challenge favouritism and unsupported assumptions about potential. In the process, leadership must ensure the same scrutiny extends to external specialists and providers. A dependency does not disappear because the person holding the knowledge sends an invoice instead of receiving a salary.
Look beneath reassuring workforce averages
Evidence of readiness is often assumed to be included in reports and submissions to the Board. However, how the information is presented can easily obscure the truth, whether by design or through a lack of application of mind. Aggregate reporting can conceal the loss of capability that matters most. An organisation’s overall turnover rate may compare favourably with an industry benchmark while one critical function steadily loses experienced people.
The average does not explain the operational significance of who is leaving and why. Looking beneath aggregate attrition figures is therefore fundamental to reveal where particular pockets of skills loss require closer attention. Boards must therefore be provided with enough detail to distinguish manageable movement from damaging concentrations of loss. Relevant reporting may include departures by critical capability, readiness of replacements, time to competence, workload among remaining employees and progress with knowledge transfer.
Retention strategies also need to reflect the people involved. Pay matters, but so do leadership conduct, meaningful work, development, and support through life transitions. Support for experienced women navigating menopause is one example of a leadership consideration that a generic retention strategy may overlook. Understanding people’s circumstances helps leaders respond more intelligently without reducing individuals to demographic categories.
Prepare for future work before capability becomes obsolete
Workforce strategy should begin with the work the organisation expects to perform and the capabilities required to perform it responsibly. However, the current strategy focused on existing job titles can obscure how fundamentally the work itself may change. Technology, changing markets and shifts in the business model inevitably create several plausible futures. Boards should ask management to explore those futures and work backwards: what learning, recruitment, redeployment or redesign should begin now?
This requires judgement about both direction and timing. An organisation can move too slowly and leave people unprepared. It can also announce ambitious change without building the capability to deliver it. Agility is key, but it is a capability that should be developed deliberately. Training attendance alone tells the board little about whether employees can operate effectively in a different environment.
Employees need transferable skills, opportunities to exercise judgement and a reasonable understanding of how their work may evolve. I think that one of the core skills of leadership today should be the ability to help their employees see the multiple potential futures, how they may be affected and what they need to do to ensure that they are ready for the future that unfolds. Employees also need capacity to learn. People fully occupied with surviving today’s demands have limited room to prepare for tomorrow. And this is where organisations can trip over themselves. Not ensuring that the capacity is created will result in people not investing the time in transitioning to new capabilities.
Make fairness part of the transition
Workforce resilience includes an ethical question: who receives the opportunity to adapt, and who carries the cost of change?
An organisation can describe its transformation as successful while transferring substantial costs to particular individuals, families and communities, to the exclusion of others. Leaders should therefore examine access to reskilling, the credibility of redeployment pathways and the treatment of people whose roles are becoming vulnerable. They should consider whether contractors or particular employee groups are excluded from opportunities, and whether performance expectations allow people time to acquire new skills.
Fairness does not guarantee that every role will remain or that every transition will be painless. It requires honest communication, defensible criteria, meaningful preparation and attention to how decisions affect people with different levels of power and opportunity. Boards should thereofore ask management to make the consequences visible and explain how avoidable harm will be reduced.
Give each role clear responsibility
The board oversees the relationship between strategy, workforce capability, resilience and fair treatment. Its information should integrate operational, financial, technological, risk and HR perspectives. Leaving the entire conversation to HR creates an incomplete view.
Executives own the workforce choices and leadership practices within their areas. HR provides expertise, develops and maintains people systems, and must account for their quality and impact. Internal Audit can independently test whether dependencies have been identified, readiness is demonstrated and reporting exposes material vulnerabilities. It should also challenge whether the risk register adequately captures these exposures, rather than treating that register as an unquestionable starting point.
The decisive test is whether these responsibilities connect to action. Can leaders show where capability has become less concentrated, successors more ready and transition opportunities more accessible? Can they explain what remains exposed and what they are doing about it?
The organisation’s future depends on people whose contribution may be poorly represented in its dashboards. Protecting that future requires leaders to understand the work, recognise the dependencies, and act early enough for people to prepare.
If you are considering how you could be assisted in dealing with human capital challenges, either as the Board or the Executive team, read more about my work here: Board Services and Executive Support
