Corey Berkey is the SVP of People & Talent at Employ.
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Layoffs that originated in the tech sector in late 2022 have since spilled into other industries, from aviation to entertainment—enough to warrant an ongoing 2023 layoff tracker (subscription required). Unsurprisingly, laying off employees affects team morale and workplace culture, regardless of the reasons for the layoffs or how they are communicated. And even if a specific employee is not let go, they go through an emotional cycle of anger, sadness and guilt, making it harder for managers to refocus the team.
With a majority of recruiters worried layoffs may hit their organization this year, there are concerns among employees about what’s next. Companies must be strategic to avoid layoffs and overcome potential economic downturns.
It Starts With Leadership
Surviving a recession or economic downturn and keeping a full team that is focused and aligned starts with having the right leaders in place. If the impetus for reducing headcount is purely to save money, you are taking the wrong approach. Before resorting to layoffs, a leadership team must be strategic by first digging into what changes are necessary and then effectively communicating restructuring efforts. They should also be able to take a high-level look at the company’s roles to see which are necessary and what responsibilities can filter through different positions.
Uncertainties also mean that your company should consider all of its options. This may mean putting promotions or raises on hold, considering adjustments that reduce expenses associated with benefits or perks, reducing employee hours or considering compensation adjustments for highly compensated employees.
It’s a challenging economic environment, but a company must weigh all possibilities before resorting to layoffs. Should these options be necessary, be honest with workers and communicate changes transparently. These communications are not “one and done.” Consider how messages will cascade through your organization and what the narrative is. Leaders should have a high degree of consistency in their messaging to keep assumptions and rumors at bay.
Upskilling In Today’s Workforce
A restructuring may necessitate shifting roles among employees, which will help get the most out of the people already on the team. First, prioritize employee retention strategies to keep skilled and valuable employees engaged and happy. Then, invest in current employees by creating an upskilling program. Upskilling enables employees to develop more advanced skills through additional education and training.
As the team becomes more efficient with newly gained skills, consider reprioritizing and reallocating time and energy to projects that move the company forward. Eliminate tasks not benefiting the organization long-term to free up employees’ bandwidth to learn more skills and realign responsibilities.
Focus On Community Building
It’s vital to focus on building community and intentionally reengaging the team. This is challenging when working with hybrid or remote teams. But investing time and effort into the team is essential to building strong relationships with employees and enhancing the culture and brand.
At Employ, we host “virtual coffee meetups” where we block out 30 minutes for employees to engage with someone outside their departments. During these meetups, there are only a few rules: Don’t talk about work, and focus on enjoying the time spent making a new connection. We also provide participants with sample icebreakers to help kick off their conversations, helping them focus more on building relationships with team members. This type of cultural investment must come from the top down, and leadership must ensure that workers are able to spend time building these connections.
Another element is to ensure leaders cultivate a culture of inclusivity and belonging. This is crucial, especially during times of change, and DEI efforts should be integrated company-wide. At my company, we look at touchpoints from software accessibility to candidate experience—all of which are critical to driving a feeling of inclusion. Organizations not prioritizing DEI will be left at a disadvantage. Per benchmark data from my company, 33% of HR decision-makers plan to increase their budget for DEI programs in 2023, and 51% plan to increase spending on recruiting technology for DEI initiatives. Now is the time to double down on DEI efforts and create opportunities for employees to participate.
Plan For The Future
It’s challenging to plan during times of uncertainty, but flexibility is vital. Companies must create and implement flexible strategies, stay informed and avoid getting bogged down. To do this, consider what roles are required, not just what needs to be filled. Hiring doesn’t need to slow down during times of economic downturn. In fact, with motivated and qualified workers being laid off, these can be some of the best times to onboard top talent.
This is also a perfect time to reflect on your talent acquisition process. Don’t just automatically backfill roles as you experience turnover. Stop and evaluate your organization in its current state and ask yourself if a replacement in the same position is the solution. Should you hold off and reduce expenses elsewhere? Should you repurpose dollars to hire a role that will have a greater impact? Should you uplevel? Downlevel? Taking the time to be reflective at each headcount change event is critical.
In Conclusion
Layoffs may be sweeping our nation across different industries, but they are not always the solution and should be a last resort. As it stands, avoid backfilling any current open roles unless they are crucial to the organization and instead reevaluate what your company truly needs to be successful. Taking the time to restructure teams thoughtfully by creating upskilling opportunities for current employees is another impactful strategy in today’s labor market. Finally, avoid plans for the short-term downturn and remain focused on the long-term.
The possibility of an upswing in the economy is always on the horizon. Cutting expenses too deeply or prematurely could put your organization at a disadvantage whenever the economic outlook starts to improve.
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