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Rightsizing Your Workforce in the Face of Economic Change

Businesses everywhere are still grappling with tremendous change, as pandemic aftershocks continue to roll through the global economy. Although most Covid-era restrictions are behind us, organizations large and small are still dealing with significant people-related issues. Workforce capacity planning is just one piece of this complex, multi-faceted puzzle. But if you’re an employer, rightsizing your workforce has likely become one of your top priorities during these turbulent times.

One of the most serious repercussions of the pandemic involves talent — or the lack thereof. Companies aren’t able to hire enough skilled workers to meet their operational needs. This inability to attract and retain qualified talent — coupled with inflation — is driving compensation higher. In fact, according to the March 2023 U.S. employment cost index, civilian wages continue to increase, up 5.0% over the past year. And depending on the industry, some workers are asking for even more.

This means employers are having to get creative when attracting and sourcing talent. For example, some are focused on rightsizing their workforce to maintain operational efficiency while qualified workers are in short supply. And many companies are downsizing and upsizing simultaneously, as they adjust to continuously changing industry challenges and trends.

Effective Workforce Rightsizing Isn’t Only About Efficiency

For numerous organizations, workforce rightsizing involves reliance on contingent workers. This can be a smart choice. Contractors and temporary workers often provide the flexibility needed to operate efficiently and effectively, even when market demand shifts or business priorities change. This strategy is also attractive because it helps protect internal employees and their core responsibilities.

Even so, a flexible workforce might not be enough to weather a negative business cycle. It may also be necessary to make the difficult decision to lay off existing employees. Obviously, the most challenging aspect of downsizing is deciding which employees to lay off.

Is it best to make these decisions based on individual performance? What role should seniority play? And how can you be sure your remaining team will have the skills, knowledge, experience and motivation to sustain your business through tough times and support future growth?

If layoffs are followed by a hiring freeze, there’s the additional question of how to retain remaining employees. What will you do if critical contributors decide to resign? The last thing you want to do during a business downturn is jeopardize a product launch, revenue goals, or customer experience.

It’s important to recognize that drastic workforce adjustments can trigger problems with stress, morale, and engagement. Naturally, staff members who aren’t laid off are likely to soon wonder, “Is more bad news on the way?” or “Am I next?”

Even in an era known for record levels of voluntary resignations, job loss is foremost on employees’ minds. In fact, it is the top concern among 85% of people, according to the Edelman 2022 Trust Barometer. Concerns like this can prompt even the most loyal team members to start hunting for a new job. And without proactive intervention from leaders, this kind of “flight” response can spread and upend your organization’s efforts to regain stability.

Rightsizing Your Workforce: 4 Key Strategies

When rightsizing your staff, finding the right balance isn’t easy. It’s even more difficult when you need to downsize one department while upsizing another.

You can certainly be upfront about your intentions — and you should be. Transparency and clear communication are essential when managing change. However, you can’t afford to lose sight of the fundamental challenge every organization must face. You must determine the best way to anticipate and respond to potential business fluctuations. Here are a few ideas that can help:

1. Include Contingent Workers in Your Plan

By definition, contingent workers serve as supplements to your core employee base. They generally work on a project-by-project basis. As such, adding contingent workers to your plan offers significant flexibility when rightsizing your team becomes necessary.

In fact, 63% of organizations told SAP Fieldglass that contingent workers enable greater organizational agility. What’s more, 62% believe contingent workers are essential for filling key IT and digital skills gaps. For example, when companies experience a sudden influx of work, they can call on this scalable talent pool for quick access to the right capabilities.

2. Be Strategic About Any Hiring Freeze

When initiating a hiring freeze, one of the biggest mistakes companies make is to halt all recruitment activities and contingencies, entirely. It’s important to continue hiring-related processes. This way, when the need for additional help arises, you can more easily pick up where you left off and maintain operational continuity.

Even if incremental roles are temporary, you’ll be better able to tap into the skills needed to support critical business objectives. In fact, 61% of companies told SAP Fieldglass that contingent workers help accelerate their speed to market. In other words, relying on flexible staffing can actually help you continue to scale during a hiring freeze.

3. Treat Skills Development as a Long-Term Investment

Don’t be shortsighted about talent recruitment or development. Focusing only on the skills you need now can leave you scrambling to fill critical roles down the line. In addition to the skills and competencies you need today, emphasize what will be essential for your business in the next few years.

Investing in professional development also gives you a chance to leverage learning and growth opportunities in your recruitment efforts. It can help your job openings stand out in today’s environment, where jobseekers value employers that emphasize learning and career advancement.

4. Leverage a Talent Marketplace

Essentially, a talent marketplace is a system that helps employers align talent with open roles. It can work one of two ways:

  • Internally, you can use this kind of system to facilitate employee mobility, helping individuals pursue different roles based on their skillset. Or you can redefine and reorganize an employee’s existing role so it better aligns with your organization’s changing needs. This process can be especially helpful during a hiring freeze.
  • Externally, a talent marketplace can help organizations open the door to freelance, temporary, or gig workers who are qualified for hard-to-fill roles. Think of it as creating a larger, more agile talent pool that lets you secure the right skills at the right time, while saving costs typically associated with recruiting and hiring internal employees.

Final Notes on Rightsizing Your Workforce

Pandemic aftershocks are still reverberating through the business world — and organizations will continue to be disrupted by unexpected external factors. As a result, smart employers are staying open to more agile workforce planning and management strategies.

Today’s successful employers are already rethinking the way they recruit, hire, manage, lead, compensate, and redeploy talent. Rightsizing your workforce is just one piece of this larger puzzle, but it can make a significant impact on your organization’s long-term success.

After Layoffs, How Can Employers Handle Survivor Guilt?

We may or may not be heading for an economic downturn this year, but we certainly are seeing a slew of layoffs. The technology industry has been most heavily affected, with more than 224,000 jobs eliminated since the start of 2022. Although many small companies are affected, we’re also seeing announcements from big names like Alphabet, Amazon, Microsoft, Salesforce, and Meta.

Now, layoffs are spilling into other sectors as well. For instance, Disney, Goldman Sachs, and FedEx recently announced job cuts. Even McDonald’s is downsizing.

But no matter where and when layoffs happen, we can’t help wondering about the people who’ve lost their jobs. How will they cope financially? How will their mental health be affected?

It’s natural to be concerned about their wellbeing. But what about employees who remain onboard? We shouldn’t forget about them.

Many of these layoff “survivors” are likely to be suffering as well. They may be expected to put in extra effort or take on additional tasks to cover for those who are gone. All the while, they’re worrying about whether their own job will vanish next. Survivor guilt only compounds their problems.

Recognizing the Trauma of Layoffs

When lives are lost in a traumatic event, survivors sometimes feel guilty because they didn’t die. Or they may obsess about what they could have done (but didn’t) to help save others. This survivor guilt phenomenon also emerges in the aftermath of work layoffs. Although the situation is less dire, employers should take it seriously.

Remaining employees may feel guilty because they still have a job when others lost theirs. They may believe they’re less worthy or less skilled than those who were laid off, which further compounds feelings of guilt. This is one reason why layoff survivors typically don’t perform as well as predicted, which can ultimately harm business performance.

Learning From Covid Layoffs

The last big wave of layoffs happened during the Covid pandemic. At that time, my organization conducted research to understand the impact on employees. Specifically, we asked people how much they agreed or disagreed with these questions:

  • I am annoyed or angry that I am still working, when others have been laid off or furloughed.
  • I feel guilty about having a job, when others have been laid off or furloughed.

We found that remaining employees were much more likely to feel guilty than annoyed. In fact, only 5% agreed or strongly agreed that they felt annoyed or angry. In contrast, 33% agreed or strongly agreed that they felt guilty. This means a third of respondents were experiencing survivor guilt.

Upon closer inspection, we found that the extent of this guilt varied considerably from person to person. In part, it was due to differences in personality preferences for either Thinking or Feeling, a dimension included in the Myers-Briggs Type Indicator (MBTI) framework.

People with a Thinking personality preference prefer to make decisions based on objective logic. In contrast, those with a Feeling preference favor decisions based on values and how those decisions affect people.

Our research found that individuals with a Feeling orientation were significantly more likely to experience guilt than those who lean toward Thinking. Specifically, 44% of people with a Feeling preference agreed or strongly agreed that they felt guilty, compared to only 21% people with a Thinking preference.

How Guilt Affects Remaining Employees

Given today’s economic pressures, organizations could see a repeat of the 2020 survivor response. It’s important for line managers to pay close attention to this, because survivor guilt can erode job performance.

But here’s a potential problem: Managers and executives are far more likely to have a Thinking personality preference. This means they’re less prone to survivor guilt, themselves. They’re also less likely to notice survivor guilt in others, or take it seriously.

How can organizations bridge this gap? The MBTI assessment and similar tools can help managers understand if their staff members see the world the same way they do. When an assessment reveals misalignment, it can help managers recognize that, even if they aren’t experiencing survivor guilt themselves, they should be open to others who are struggling.

Steps to Minimize Survivor Guilt

Managers and HR specialists can take several steps to mitigate the worst effects of survivor guilt. For example:

1. Let remaining employees know that you addressed all those who were laid off as individuals and you treated them as well as possible. But don’t communicate this message if it isn’t true. People with a Feeling preference have a knack for sensing inauthenticity. So lying will make matters worse than saying nothing at all.

2. Offer to help employees who lose their jobs. For example, you may want to offer outplacement counseling to everyone who is laid off. Providing this kind of support is a moral thing to do. Plus, it can improve morale and engagement among those who remain. So, even though it increases the upfront cost of layoffs, this investment can lead to tangible business benefits.

3. Reassure employees that, even if they had been prepared to make sacrifices themselves, the outcome wouldn’t have changed. Again, don’t communicate this message unless it is true.

4. Clearly explain the rationale for layoffs to those who are leaving as well as those who remain. This helps avoid the appearance of arbitrary decision making.

5. Do not congratulate survivors because they still have a job. This may only increase any guilty feelings they’re experiencing.

6. Establish multiple channels to share information on an ongoing basis. People have different communication preferences, depending upon their personality. That’s why it’s important to offer a variety of methods, especially if your organization includes remote and hybrid workers. Here are several ideas:

Provide opportunities for people to ask questions and submit suggestions. Some people prefer live face-to-face discussions, group meetings, online forums, or instant messaging. Others need to think about questions and submit them in writing. These people may feel more comfortable with on-demand online events, online feedback forms, email messages, or anonymous surveys.

Whatever communication mix you implement, be sure to set expectations for how quickly you’ll respond to questions, ideas and comments. And once those guidelines are in place, be sure to follow through.

Final Thoughts

Whenever employers initiate layoffs, it’s vital to consider the organization’s psychological contract with employees. Unlike a tangible work contract based on things like salary and working conditions, the psychological contract is intangible. It focuses on values and “the way we do things around here.” This contract is an implied agreement between employer and employee.

Organizations must consider if and how layoffs violate this contract. When this is the case, leaders must explain their actions. Otherwise, employees with a Feeling personality preference may walk away from their jobs without any explanation or warning. They’re likely to feel justified because their values have been compromised.

To avoid these unintended consequences, think ahead about the implications of layoffs — not only for those who will lose their jobs, but also for those who will remain. Then act accordingly. If you want your organization to prosper in the long-run, ignoring survivor guilt is not an option.

Hiring In a Recession: 3 Strategies for Business Resilience

The global economic climate is in a precarious state, with experts now predicting a 70% likelihood that the U.S. will enter a recession this year. No doubt, this news is unsettling for business owners. But it’s important to remember that recessions are a natural part of ongoing economic cycles. They can even present opportunities for organizational growth and resilience if you know how to capitalize on them.

So, how can leaders navigate today’s challenges and emerge even stronger on the other side? By strategically hiring in a recession. If you want to build bench depth on your team during tough times, here are three strategies to consider:

3 Strategies for Hiring in a Recession

1. Go Global With Remote Hiring

We’re in a much different position now than during The Great Recession of 2008. So is the global workforce. Thanks to technological advances and the prevalence of remote work models, it’s much easier now for hiring managers to tap into the vast global talent pool.

Compared with local hiring strategies, seeking out top talent internationally offers multiple advantages. Not only can you gain access to a much larger source of candidates, but you can also achieve significant overhead cost savings if you hire people in locations where labor costs are lower.

In addition, sourcing job candidates from around the world can help you develop a much more diverse team. If you are careful to hire skilled professionals, an international approach can inject your work culture and business deliverables with fresh perspectives. This can help your business operate more effectively and efficiently while supporting long-term growth.

That said, hiring globally isn’t without its challenges. To succeed, hiring managers need to be aware of hiring laws and regulations in their chosen countries, as well as cultural differences. It’s also important to ensure that hiring practices are fair and equitable, regardless of where potential employees may be located.

The importance of remote work leadership also needs to be taken into consideration here. Your organization should be prepared to develop and support management skills and practices that will help remote teams stay connected, engaged and motivated.

2. In an Era of Mercenaries, Focus on Your Missionaries

The last few years have been like a game of musical chairs for the labor market. The Great Resignation resulted in 44% of workers hopping from job to job, searching for higher pay, better benefits, and more flexible work options.

This led to a new trend known as “mercenary hiring,” where employers use inflated compensation packages to recruit highly skilled candidates without regard for the company’s mission or culture. However, this recruiting practice can be very risky. While it may be an effective way to attract top talent in a tight labor market, it can also lead to increased workforce churn and damage company culture.

Fortunately, there’s an antidote to mercenary hiring. Hire “missionaries” instead. Focus on people who share a passion for your company’s mission, purpose, vision, and values. These job seekers are more likely to invest in long-term success with your organization, so they’ll also be more invested in your company’s growth.

Of course, it’s one thing for employers to identify, attract and hire these “missionaries.” But it’s even more important to focus on creating an environment that nurtures them and encourages them to thrive. For example, this can include competitive salaries, consistent recognition, and generous professional development opportunities, as well as incentives like flexible scheduling and remote work options.

3. Find Opportunity in Adversity

The hiring landscape may have changed, but one thing remains the same: Hiring during a recession is an opportunity to tap into highly qualified talent you might not find as easily during better economic times.

During the last recession, the U.S. lost 2.6 million jobs. And in 2022, we began seeing some very prominent companies announcing major layoffs. While this news can be disturbing, hiring managers should see it as an opportunity to find the best and brightest talent amidst the chaos.

History has shown us some iconic instances of hiring when the job market was at low ebb. For example, in the 1940s, Hewlett-Packard famously capitalized on the closure of military labs to beef up its workforce. And during one of the nation’s worst 16-month economic cycles, Microsoft took the initiative to hire some of its most influential engineers. Both cases offer powerful business lessons.

Key Takeaways

So, what’s the moral of this story? Here are the three key takeaways to keep in mind about hiring in a recession:

1. Top Talent is Only a Zoom Call Away

With the rise of remote work and virtual hiring tools, it’s easier than ever to find top talent in all corners of the world. Don’t limit your search to local candidates. Consider expanding your talent acquisition reach to a global scale. This can open you to a broader pool of qualified, motivated candidates while giving you access to diverse skills and experiences.

2. Resilience in Hiring is More Than Just Hiring More People

In a recession, it’s important to be strategic about who you recruit. Look for individuals who share your goals and understand your company’s mission. People who sincerely want to advance your agenda are much more likely to stay with your company during difficult times. Focus on building a team of dedicated employees who are willing to be flexible during uncertain times. This will help you weather the storm and emerge stronger on the other side.

3. When Others Freeze Hiring, Be Bold

During a recession, it can be tempting to react with a hiring freeze. Although that approach may save costs in the near term, it is also likely to be a mistake. Investing in talent during tough economic times can set you apart from competitors and position you for success in the long term. Don’t be afraid to be brave and continue investing in your team, even when times are tough. This can help retain your best existing employees, while also helping you attract strong new talent. That combination can build the foundation your company will need to drive future growth.

Final Note

Overall, the key to successful hiring in a recession depends on three factors – your ability to be adaptable, strategic, and focus on building a team that is willing and able to weather the storm with you. By keeping these principles in mind, you can navigate even the toughest hiring climate and make your organization more resilient in the face of any economic downturn.

Are You Ready to Lead Through Uncertainty?

Sponsored by HiBob

As 2023 begins, the world of work is bracing for a rough ride. For more than a year, inflation has gripped the economy. Previously unstoppable tech companies are reeling from recent layoffs. And other industries are tightening their belts, as a recession now seems unavoidable. What will it take to lead through uncertainty?

Strategies that helped organizations thrive under different circumstances are no longer relevant. But during lean times, how can you preserve what’s valuable and unique about your organization? This question is top-of-mind for leaders everywhere. So let’s get advice from someone who understands the factors driving today’s business climate:

Meet Our Guest:  Ronni Zehavi

Today, I’m thrilled to welcome Ronni Zehavi, Co-Founder and CEO of modern HR platform provider, HiBob. After more than 25 years of experience in launching and leading successful technology companies, Ronni knows first-hand how to guide organizations through volatile, uncertain circumstances. Now he’s sharing his unique perspective and expertise to help others lead through uncertainty.

Managing Multiple Unknowns

Welcome, Ronni. Let’s dive right in. How can organizations navigate through uncertain times?

It’s a bit like driving a car. In 2021, driving fast may have been easier because the road was clear. But today it’s bumpy and cloudy. No one knows when it will end, so you need to slow down.

2023 is going to be challenging. First, read the map and then adjust your plan. How long is your runway? Do you have enough cash? Do you have enough funds to weather the coming storm?

Then look realistically at the environment. A slowdown will have an impact on your customers as well as your organization. Will you be able to generate the revenues you expect?

The Long Game

The economy will eventually bounce back. How can we prepare for that now?

It starts with your people. Invest in them. Make sure you can retain all of them. Or, if not all of them, focus on your most important people. Because you’ll want them to be with you when the tailwind comes.

And more than anything else, think positive. What goes down comes back up. So optimism is critical.

How to lead through uncertainty

JOIN US ON TWITTER!

What About Layoffs?

Is there a right way to reduce headcount? How can leaders avoid damaging their company culture?

Layoffs are only one option in a CEO’s toolbox when adjusting to a difficult environment. First, you may decide to slow down hiring. If a slow down isn’t enough, then you may need to freeze hiring or freeze salary increases, or both. And if needed, the next option could be salary cuts or layoffs. One or both.

But it is important to think about the people who stay as well as those who are laid off. Retention can be affected when those who remain are expected to do the job of two people or even more.

Communication and transparency are critical to preserve your culture.

Can Flexible Work Help?

Do you think economic changes will influence where we work? 

I don’t think so. I think hybrid work is here to stay. Flexibility was a nice-to-have perk a few years ago. But the pandemic proved that organizations can deal with it.

The ultimate combination is two or three days at the office or two or three days remote. It offers flexibility, but it keeps engagement and collaboration among people.

How to Support Hybrid Work

I like the idea of finding a balance between onsite and remote work. But how can leaders accomplish this? 

It’s a journey. It will take time until we get there as a standard. But flexibility is all about what we call internally, The Three T’s:  Trust. Transparency. Teamwork.

If your organization follows these values, it will help you create a flexible work culture.

 


For more insights from Ronni about how to lead through uncertainty, listen to this full podcast episode. And be sure to subscribe to the #WorkTrends Podcast on Apple Podcasts or Stitcher.

In addition, we invite you to join our live Twitter chat about this topic on Wednesday, January 25th at 1:30pmET/10:30amPT. Follow @TalentCulture for questions and be sure to add the #WorkTrends hashtag to your tweets, so others in the community can easily find your comments and interact with you!

Also, to continue this conversation on social media anytime, follow our #WorkTrends hashtag on Twitter, LinkedIn, and Instagram.

Leadership Done Right: Yes Elon, Empathy Works

Some conversations stay with me. It could be something about the subject, the wisdom of the person I’m talking to, or the timeliness of the discussion. And sometimes, a random event triggers my recall. Case in point: The world recently watched a sad spectacle, as half of Twitter’s 7,500 employees lost their jobs when new owner Elon Musk stepped into his CEO role and promptly went on a firing spree. Apparently, he hadn’t received the memo from other successful executives that empathy works as a leadership style.

Twitter is obviously grappling with numerous business issues. But it’s stunning to think this company’s future depends on a singular person in a position of great power who simply decided to slice the workforce in half. And that was only his first week on the job.

Why Empathy Works

This behavior reminds me of a #WorkTrends podcast discussion I had with Gary DePaul, a brilliant leadership consultant, researcher, and author. We spoke in June 2021 — more than a year into the pandemic — when everyone was grappling with workplace challenges. The Great Resignation was gaining steam, and leaders were scrambling to redefine work life and organizational culture in ways that would keep talent onboard.

Over the course of our conversation, Gary explained what makes leaders effective in the long run. Among the qualities that give leaders staying power is (you guessed it) empathy. Seems like the opposite of Elon Musk’s approach, doesn’t it?

Whatever you think of his business acumen, Elon has never been an empathetic leader. It doesn’t seem to be one of his goals, to put it mildly.

This posture is already damaging his relationships with employees. And it doesn’t seem to be garnering trust among Twitter’s business partners, either.

Days into this acquisition, major advertisers like GM decided to put their Twitter budgets on hold and marketing strategists began advising clients to spend elsewhere. It seems Elon’s lack of empathy is already costing him dearly.

Empathy Works Because it Builds Common Ground

Will an empathy void ultimately matter to the success of this $44 billion deal? It probably depends on your view of the people/profits equation.

In our podcast interview, Gary made it clear where he stands, and I’m inclined to agree. Empathy is absolutely crucial for leadership. It’s also a necessary through-line for every organizational tier. Whatever your title, you won’t win the hearts, minds, or cooperation of your team members unless you make a genuine effort to connect with them on a human level.

Gary said that openly acknowledging your weaknesses as well as your strengths is a powerful way to break the ice. It doesn’t need to be complicated. For instance, at your next Zoom meeting, when you ask everyone to introduce themselves by sharing a bit of personal information, don’t skip yourself.

Empathy Also Builds Alignment

Self-awareness leads to humility, which in turn, leads to empathy. When you honor others’ right to be at the table, you can expect a better response from them. That’s the reason why empathy works.

Think about it. When you make an effort to connect with others, pay attention to them, and factor their input into your decisions, others will be drawn toward you.

But when your actions make it clear that your business revolves around you, why would your team sign-up for that? When you send a message that says you make decisions in a unilateral, top-down way, you inhibit the free exchange of ideas where engagement and innovation thrive.

No wonder we see phenomena like “quiet quitting” eroding modern work cultures. When people feel like it’s not worth the effort to work hard or go the extra mile, why should employers expect that kind of commitment?

The Elon Musk Twitter story still needs to unfold. But I think we’re already learning some valuable lessons. I believe Gary DePaul would agree.

Authority is best served with warmth. In other words, leaders should be willing to admit they’re going to make mistakes. They should also be willing to admit they’re on a learning curve — particularly when they’ve just taken over a company.

Anyone in charge of a team can and should work on their leadership style and recognize the importance of communicating with different types of people on their terms. (Hint: Maybe email isn’t the best way to deliver life-altering news.)

A Key Takeaway from Gary DePaul

Studying leadership is Gary DePaul’s career passion. When we spoke, his latest book was What the Heck Is Leadership and Why Should I Care?  It speaks to these core questions:

  • What does it really mean to lead?
  • What does this job really require?

Gary’s bottom line:  Leadership is a continuous, ongoing vocation. So if you’re heading into the corner office (metaphorically or not), don’t assume you’ve arrived. You’re just getting started.

 


EDITOR’S NOTE:

For more insights on leadership and other work-related topics, explore our #WorkTrends podcast archives. You’ll find a treasure trove of great guests and ideas.

Also, be sure to subscribe to Meghan M. Biro’s LinkedIn newsletter,  The Buzz On Work, her personal take on what’s happening at the intersection of people, tech, HR, and work culture.

Photo: You X Ventures

Don’t Sacrifice Talent To Survive a Crisis

Nobody needs to tell you that we’re in hard times. A pandemic is sweeping the nation, a trail of personal and economic devastation behind it, and frightening uncertainty ahead. Businesses are struggling to figure out the best path to survival. For many leaders, the impulse is, understandably, to lessen their organizations’ financial load with layoffs.

The good news is that eventually, through the efforts of courageous health care workers and our technology, we will defeat the virus, and life and work will return to a version of normal. And many economists predict that when this happens, our mothballed world economy will snap back to life, unleashing a wave of pent-up demand.

Will your company survive and be ready for this?

After all, consider what happened post 9/11. After the attacks, the world economy reeled, oil prices surged, and the stock markets plunged as the world braced for war in the Middle East. Many companies, fearful about the future, indulged in a layoff binge, slashing their workforce without thought to who their top talent was, or what current and future skills the organization might need to remain viable and recover with the economy.

But then the economy quickly rebounded, and the downturn turned out to be what economists call a “V-shaped recession.” The sharp decline in GDP was followed by an almost equally sharp increase in business activity. At this point, companies found that the talent they let go was desperately needed. They scrambled, and the result was a massive hiring binge to fill the gap that they themselves created.

The fact is that fundamentally, there was nothing significantly wrong with the underlying economics on September 11th, 2001. The economic downturn was not caused by normal business cycle considerations, the firing binge was followed by a scramble to replenish a depleted workforce.

Today, the pandemic is cutting a swath through what otherwise had been a robust economy, so the mistakes of 9/11 are a cautionary tale.

If you are among the business leaders queuing up the pink slips in reaction to this unprecedented crisis, I urge you to stop, take a breath, and think your next steps through — lest you sacrifice valuable employees in your rush for short-term relief.

While I understand some companies are in crisis and don’t have the luxury of time to pause for analysis, most do have the wherewithal, and I would argue, a duty to their workforce and, if public, their shareholders to proceed with wisdom and caution.

So instead of rushing to throw off what might feel like human ballast, consult with your HR executives to put together a strategic workplace plan, or crisis plan, by performing a three-dimensional review of your current workforce, considering more than headcount and cost. Instead of responding in panic only to the here and now, look ahead, 6 to 18 months in the future, and decide:

  • What skills your people have today and what your organization will need
  • How to ensure you have an adequate supply of these skills and where to deploy them
  • Your succession plan for key leaders

Upon sober reflection of these needs, you probably will find that you can keep most of your workforce in place, and you will be ready to make clear decisions based on your data and forecasts. Additionally, doing a strategic workforce crisis plan will set you up for the future by seeing how you can maximize the productivity of the workforce you have. From this plan you will be in position to drive higher performance and workforce engagement, creating what I call “PEIP capability,” where PEIP = People Engagement, Innovation and Performance.

PEIP is a strategic capability that not only creates higher performance, it creates a more engaged workplace, which naturally leads to greater productivity. Who doesn’t want to work in an organization that wants to optimize employees and work with their skills and their career aspirations? A workplace that tries to align people to what they do best? An engaged workplace is a fun place to work, but it is also a competitive advantage. Some of the highest performing companies, such as Google, Microsoft, Accenture, IBM, and SAP, have implemented PEIP strategies to create competitive advantage, and this is reflected in their people engagement scores as well as share-price performance.

PEIP can also help future-proof your organization. New smart technologies and AI perme.ating the workplace create another opportunity for the workforce and the organization to align the right people with the right skills to harness new technology. This creates a “turbo-charging” effect, driving more engagement, innovation, and productivity, as well as return on investment on IT spend.   

We are at the fork in the road — once again. It’s a scary time, but rife with opportunity for companies that respond with foresight. We can do as we have done for decades before and continue the hire/fire binge, or we can step back and be more strategic and thoughtful in addressing the current crisis, while at the same time positioning our businesses to thrive in the future — whatever it brings.

Outplacement: Staying Ahead of the Curve

Written by Raymond Lee, Founder, Careerminds

Outplacement services
were once considered a perk reserved for executive layoffs. But in recent years, corporations have rapidly expanded the model to help transitioning employees at all levels.

There are several reasons:

1) As outplacement has gone virtual, it’s proven cost effective for employers and attractive for employees;
2) Leading service providers are setting the bar for employer branding;
3) The recession made layoffs a common experience for many members of the workforce.

Outplacement has always been considered a perk, but now, as the Wall Street Journal notes, it’s an expected perk. In fact, according to a recent survey we conducted, more than 70% of companies offer assistance to displaced employees.

The New Normal

Of course, we’ve all been affected in one way or another by the severe economic recession in recent years. Those tough times have forced leaders to conduct business differently. Companies that survived have learned how to run effectively with a leaner workforce. And now, across-the-board, we see a surge in companies that approach staffing based on on strategic alignment with industry needs.

Instead of reacting to the ebb and flow of internal operating cycles, companies are anticipating talent requirements across their industries, and mapping to those benchmarks. Now, even though the economy is making a strong comeback, it seems workforce alignment is here to stay. In fact, we expect it to play a key role in the ongoing business practice of managing layoffs.

Skipping The Layoff Scramble

However, even with smart planning and a focus on industry trends, companies typically find themselves scrambling for solutions and guidance when they experience shifts in demand. This is common, even when reductions in force (RIFs) are small. Having been in this industry for a long time, I’ve seen first-hand the panic that accompanies any kind of RIF.

As the scale of a layoff expands, so do the risks. Unfortunately, all too often, HR departments don’t establish a relationship with outplacement specialists until the panic has set in and the scrambling has begun. That kind of environment is ripe for poor management choices. It’s certainly no time to pick a provider.

Outplacement Risk — And Easy Insurance

The reality is, no one knows they need outplacement services until they need outplacement services. Conducting a RIF is inherently risky. It makes sense to work with a reliable, prepared outplacement partner. And although most companies realize that they need expert guidance to manage layoffs, most typically avoid engaging with outplacement until the need is urgent.

Rather than waiting to start your research during the pressure of “the scramble,” it’s wise to begin long before the need arises (if it ever does). You have nothing to lose by establishing a trusted relationship with a reputable firm. Think of it as an insurance policy — one that no company can afford to ignore. As the recent economic crisis demonstrated, market demand can be volatile, and in a downturn, the high cost of staffing can have a devastating impact on business performance. It’s important to be prepared, just in case.

Quickly choosing a firm at the top of Google search results, or picking a low-price bidder is a recipe for a mismatch. These might be great companies with viable services, but there’s more to choosing an outplacement provider than that. Does the firm have coaches who understand your industry’s talent requirements? Can it demonstrate a proven history of business relationships and placements in your sector? How easily can global or decentralized employees gain access to services?

Also consider the pricing and services structure. Some outplacement providers charge for each type of service delivered, while others base fees on the duration of an engagement. It’s important to research the average time-to-place for your industry, and consider this along with other decision criteria.

Why It Pays To Think Ahead

These are just a few of major factors in choosing the right outplacement company. But they illustrate my point. Waiting until you’re in the thick of layoffs is a sure bet that you’ll sign-on with an outplacement company that isn’t right for your business. Even a small investment in preparation can help you avoid costly missteps.

Whenever a RIF occurs, your company’s hard-earned employer brand is on the line. If you haven’t already considered potential outplacement scenarios and requirements, it will be too late to compensate. Start doing your homework now. Establish a relationship with a provider. Ask tough questions. Consider them one of your organization’s ongoing HR advisors. You’ll sleep better at night — and you may also gain insights that will help your department operate more effectively — even if you never lay off another employee.

RaymondLeePic(About the Author: Raymond Lee launched Careerminds in 2008 as a virtual outplacement company. He brings over 18 years human resource leadership, career consulting, and outplacement experience to Careerminds. The concept of virtual outplacement was developed by Raymond after experiencing years of traditional outplacement in a variety of HR roles. Over his career, he planned and executed several large-scale layoffs, and in his last role set up a costly in-house brick and mortar outplacement center for displaced employees to access.)

(Editor’s Note: To discuss World of Work topics like this with others in the TalentCulture community, join our online #TChat events every Wednesday, from 6:30-8pm ET. Everyone is welcome. Learn more...)

Image Credit: Pixabay

Consider Culture Before Leaving Your Job: #TChat

Originally posted by Matt Charneyone of #TChat’s moderators, on MonsterThinking Blog

A lot of companies, through recruiting advertising, corporate mission statements, employee communications or any other aphorism-friendly medium, proudly proclaim some variation on the theme, “Our people are our greatest assets.”

As the economy slowly rebounds, however, there’s a pretty good paper trail showing that, in fact, many of these assets were treated, essentially, like a cost center, at least when it comes to the old p&l.   Shedding the fixed costs of human capital might make sense on a balance sheet, and has, over the short term, created both shareholder value and historic levels of employee productivity.

For the overwhelming majority of workers, there’s nothing fixed about human capital.  And they’re about to prove it; with the expected mass exodus of talent  in the wake of the rebounding economy, many companies and talent organizations are about to discover, in fact, that “our people are our greatest assets” is more than a corporate catch-phrase.

Because a lot of those assets are about to walk out the door, taking with them, in many cases to competitors, a level of institutional and internal knowledge whose value on the balance sheet might be hard to calculate, but whose bottom  line effect will be felt by many organizations for years to come.

The upcoming seismic spike in employee turnover will look different than any we’ve seen in the past.   A recent Monster.com survey showed that fully 82% of fully employed workers have updated their resumes in the past 6 months, and a whopping 96% of employees with tenures of over 5 years are openly exploring opportunities.

Any recruiter can tell you, candidates with up-to-date resumes and job longevity are pretty much the Holy Grail of talent acquisition.  And the crusade for your organization’s employees is about to begin.

Join #TChat tonight as we discuss what employers and job seekers alike can do to take advantage of this historic confluence of trends that stand poised to redefine the status quo of workforce and talent management.

#TChat Questions and Recommended Reading (4.5.11)

Whether you’re a recruiter, job seeker, or employer, the ‘perfect storm’ of accelerated attrition and acquisition will change the way you work, and who you work with, and we want to hear from you tonight from  8-9 PM ET.

Here are the questions we’re going to be discussing tonight, along with some recommended reading to help inform, and  inspire, tonight’s #TChat conversation:

Should I Stay Or Should I Go?  Workplace Culture Factors to Consider Before Leaving Your Job

Q1: Almost 90% of workers report being “open” to looking for new jobs.  Why is this number so high?

Read: Another Workplace Survey Shows Workers Are Fed up And Ready to Bolt by John Hollon

Q2: How can employers take advantage of these trends to recruit and hire top talent?

Read: How To Capitalize on the Post-Recession Resume Turnover Tsunami by Jon Picoult

Q3: What factors should employees consider when looking for a new job opportunity?

Read: What To Know Before You Quit by Roberta Matuson

Q4: What can business leaders do to improve retention  rates and morale among top talent?

Read: Rules for Retention: The Big 6 Motivators by Dr. John L. Sullivan

Q5: What’s the difference between an active and a passive candidate, if any?  Does it matter?

Read: The Darwinian Evolution of the Recruiter by Mark McMillian

Q6: What are the most significant factors employees look at when deciding to stay or leave?

Read: The Grass is Not Always Greener by Dr. Caela Farren

Q7: What are some ways employers and companies can help turn the tide?  Or is it too late?

Read: Top 2011 Employee Engagement Trends by Kevin Sheridan

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Visit www.talentculture.com for more great information on #TChat and resources on culture fatigue and how to overcome it!

Our Monster social media team supports the effort behind #TChat and its mission of sharing “ideas to help your business and your career accelerate – the right people, the right ideas, at the right time.”

We’ll be joining the conversation live every Tuesday night as co-hosts with Kevin Grossman and Meghan M. Biro from 8-9 PM E.T. via @monster_works and @MonsterWW.  Hope to see you tonight at 8 PM ET for #TChat!

Being a Good Boss Means Not Being Afraid to Fire; #TChat Recap

Everybody likes to be liked. Most colleagues and bosses that I’ve worked with do. To a fault, which makes it very difficult when dealing with those who need dealing with.

Those who need to be written up and eventually fired.

For those who don’t care about being liked, in particular the bosses, most still don’t deal with confrontation very well and hence don’t fire. Well. Or at all. This of course is all anecdotal, but I bet most of you agree, and we’ve all seen the surveys and the research that validates.

The overall consensus last night during #TChat was that this “fear of firing” affects business performance detrimentally, because not only do poor performers topple the bottom line by falling flat on it, they also affect their co-workers and others in the business, which then creates a domino effect of further poor performance. And if they’re customer facing in any way, then there’s another affront to growth and revenue.

We didn’t really define “poor performance,” but that can include the inability to complete assigned tasks to being a toxic employee. Because which is more important when considering termination: cultural fit or performance? I say performance and lack thereof. I’ve hired great cultural fits who don’t perform (or can’t in that position).

There was a contingent last night who thought if the cultural fit was there, performance issues can be resolved. Maybe. Maybe not. Too many variables and if you cram a lazy square peg into a virtual round hole and then ask them to handle customer services calls from home…

Ultimately it’s the immediate supervisor’s responsibility to initiate the termination process, and why they must document performance and have 1-on-1’s beyond the annual review. I wrote a post last month titled Did you get that last part? Don’t be afraid to fire. Period. where I recommended the following:

  • Create formal and informal employee learning networks for mentoring and career development.
  • Empower, develop and train the average employees so as to develop a more productive workforce.
  • Allow employees in training to dial up and down their roles and responsibilities.
  • Recruit and hire those with high potential — FT, PT, contractor, etc.
  • Reward the high potentials and high producers.
  • Don’t be afraid to fire those who can’t be empowered, developed or trained.

By no means am I an expert in this area, but based on my experience recruiting, training and developing employees, these are activities that worked for me and my companies. Being a good boss means not being afraid to fire. Period.

Don’t forget to include human resources in the termination process, even the CEO and other leaders when applicable. Unfortunately this is because we live in such a litigious society and HR still need to help enforce compliance and proper procedure.

We had the pleasure of having Kevin Wheeler stop by #TChat last night. He’s a globally-known speaker, author, columnist, and consultant in human capital acquisition and development, and we were thrilled to have him join in our stream. When we got on the subject of hiring better performance fit to prevent eventual firing, better interviewing came up quite a bit. But Kevin reminded us that according to recruitment research, interviewing wasn’t much better than chance in predicting success in a position. Even those who are good at behavioral interviewing, which isn’t many, it’s still not much better than chance. References, however, can help evaluate cultural fit, and I agree with Kevin there. At least beyond the obligatory three five-minute reference check calls.

Thank you again Kevin!

You can see our TweetReach here and these were last night’s questions:
  • Q1: What impact does “fear of firing” have on leaders?  Biz performance?
  • Q2: What red flags should managers look for when recruiting now to avoid firing later?
  • Q3: Who should have ultimate responsibility for firing decisions?  HR, CEO, Supervisor?
  • Q4: Which is more important when considering termination: culture fit or performance?
  • Q5: What can job seekers do to explain being fired when looking for their next role?
  • Q6: Some say being fired can be the best thing that ever happens to someone.  T/F?

Thank you again everyone for joining us last night!  Next week’s topic will be “ “Should I Stay or Should I Go: Workplace Culture Factors to Consider Before Leaving Your Job”