By now, most HR executives have lived through many moments of disruption. Unfortunately, those moments were met as they arrived, with little effort going into developing a playbook to be ready for the next change. The last decade, beginning with the rise of digital business models and continuing through the Covid-19 pandemic, has taught leaders to build agile teams, prioritize critical skills, and respond quickly when the unexpected becomes reality.
But today’s disruption is coming from multiple fronts at once — geopolitical and economic instability, generational shifts in the workforce, and the sweeping impact of AI on how business gets done.
This kind of disruption is particularly challenging for talent and learning leaders, who are often among the first to face budget scrutiny. In the coming quarters, we should expect to see downward pressure on HR and L&D budgets even as expectations rise to do more with less.
Scenario planning offers a path forward — giving HR leaders and their trusted peers a practical method to evaluate tradeoffs, anticipate future states, and build flexible strategies that can adapt as circumstances shift.
Why Start Scenario Planning Now?
In economic downturns like the one we might soon see, driving business outcomes demands a new kind of talent planning.
When the future is less predictable, scenario planning — widely used in military and emergency preparedness — offers leaders a way to anticipate disruption and rehearse responses. At its core, it’s one of the best strategic tools for thinking through forces like AI, automation, economic volatility, and shifting business models — and look ahead rather than react.
When practiced regularly, such as two or three times a year with an HR executives most trusted leadership team, the team begins to develop their own capabilities of connecting their scenario exercises with real world developments, and to begin moving chess pieces around the board prior to the moment of necessity. It’s like applying our skills around succession planning to our own strategy and operations.
Three Likely Scenarios — and How HR Should Respond
In today’s environment, we’re seeing three interrelated scenarios emerge. Each requires a different playbook.
1. Budget Pressure and Retrenchment
When learning budgets shrink, many HR teams default to low-cost, high-scale content — often powered by AI. This is understandable. But that approach often pushes out high-volume, low-impact training that doesn’t move the needle on what really matters to the business during times of duress. Your learning system will bring back search results for nearly any term, but the reputation of your team will suffer as the content fails to produce meaningful skill building and business results.
Instead, leaders should double down on fewer, higher-impact programs. Focus investment on mission-critical roles and the people who fill them. Use scenario planning to define where development matters most — and then align spend accordingly. Tight budgets are no excuse for scattershot skilling.
2. Business Pivots and Operational Shifts
Some organizations may find their business model fundamentally shifting, whether due to global trade patterns, supply-chain shifts, or digital acceleration. In these cases, talent teams must rapidly recalibrate toward new skills and functional capabilities.
The task here is triage: Identify where the business is moving, what capabilities it now requires, and which existing workers can pivot. Do you have talent with the skills ready to manage an acquisition? Are you ready for reallocation of production facilities through onshoring? Is your sourcing function ready to move entire supply chains across continents? Scenario planning enables this response by mapping future-state operating models and matching them with internal talent pipelines and necessary skills profiles.
3. Growth Through AI and Automation
In contrast, some firms are leaning into AI as a growth strategy. They are automating non-core tasks and reallocating human capital to fewer, higher-value roles.
For L&D, that means identifying which teams will absorb the strategic work that remains. It also means training employees to reimagine business processes from scratch, implement new technology, and manage agents as a part of their teams. Learning teams must partner with business leaders to design targeted upskilling programs and implement platforms that integrate human-AI workflows. To be clear, AI should not be seen as a substitute for talent strategy but a multiplier of its value.
Revisit the Foundations
No matter which scenario you face, your fundamentals matter. Start here:
- Get control of the budget: Reassess costs across systems, content, and staffing. Set clear investment priorities and identify options for reallocating your budget for different scenarios. .
- Audit your content stack: Focus on what’s used and what’s impactful. Reduce noise.
- Evaluate your tech stack: Favor low-IT, high-agility platforms. Understand the moments for consolidation and integration vs innovation and testing. Identify which tools enable flexibility through one-to-many relationships.
The Advantage Goes to the Planners
We don’t know how long today’s uncertainty will last. But we do know that resilient organizations will emerge stronger if they use this moment to rethink and realign. The advantage doesn’t go to the biggest spender. It goes to the most prepared.
Scenario planning gives leaders the ability to anticipate change, test decisions, and protect talent investments in any economic climate. Don’t wait for the next crisis. Build your plan now.
For nearly 20 years, Matthew Daniel has consulted on talent development, talent management, and HR technology strategies for Fortune 500s, including companies like Nike, Boston Consulting Group, Chipotle, Allstate, Cigna Healthcare, Microsoft, Walmart, and General Motors.
Matthew currently serves as Sr. Principal of Talent Strategy at Guild, where he crafts solutions with Guild’s employer partners at the intersection of skills, career pathways, mobility, and equity in the workforce, and bring back market insights to Guild’s product and solutions teams. Additionally, he advises HR leaders from Guild’s existing and prospective employer partners on workforce transformation, skilling, career pathways, mobility, and equity.
Previously, he’s served both internally as an L&D leader at Capital One and in various consulting roles for a number of Fortune 100s.