Talent Sustainability: From Replacing to Investing in People
I have been working in Talent Operations for established tech companies and scale-ups in International Markets and the Bay Area for over 15 years. There is a pattern that repeats itself every few months and that we can see magnified during the current economic climate: The Hiring and Layoff Tsunamis.
ππππππππππTHE REPLACING WAVES πππππππππππ
The hiring Tsunami
The cycle starts with positivity in the markets and investors getting excited about growth. Leadership drives a big push to hire, and other investors and competitors follow suit. A big wave of qualified jobs enters the market, and recruiting professionals are in high demand. The war for talent exacerbates, and recruiting departments invest heavily to amplify their short-term impact. The main objective is to deliver hires as soon as possible so that the product or service line can be launched on time. After a few months of the wave swallowing up as much talent as it can, the waters get more serene, and everything starts to slow down.
The layoffs Tsunami
Something else starts to brew. A wave of reorganizations and layoffs. This one has the opposite starting point: conservatism hits the market and investors, resulting in optimization efforts, hiring slow downs, freezes and ultimately layoffs. Companies realize all of a sudden they are bloated, over-hired in the wrong places, and need to augment productivity so they decide to become leaner. After the layoff Tsunami, calmer times come again until the next wave of hiring appears.
π₯π₯π₯π₯π₯π₯π₯π₯π₯π₯THE WHIPLASH EFFECTπ₯π₯π₯π₯π₯π₯π₯π₯π₯π₯π₯
Why are we constantly moving from one Hiring Tsunami to another and suffering from a whiplash effect? Companies are optimizing for costs and adjusting to market needs as fast as they can. From a financial perspective, it makes sense because people have traditionally been accounted for as a cost. Cost-optimization strategies consider hiring and letting go of personnel the quickest tactics to keep financials on track. However, there are hidden costs and missed opportunities to these practices.
The hidden costs of layoffs
The hidden costs of layoffs are often not considered. Severances, the damage to the company's reputation as a future employer of choice, and the lower productivity and loyalty of the remaining employees might be overlooked when making headcount resizing decisions. Productivity is impacted in both waves. During layoffs, employees need to take additional work that their impacted peers left behind and figure out the new organizational landscape. In times of growth, they take time off their day to interview and onboard the new people that come in.
Employees and employers demands polarize
The erosion of trust increases after every wave. When layoffs occur, employees become more aware of how dispensable they are. Their motivation and loyalty drops. Conflicting demands for flexibility make it worse. Employees want to keep the flexibility they gained during the pandemic. Employers want people back into the offices to improve collaboration and engagement. Job security has raised in importance for employees. At the same time, the illusion of permanent work being safe has diminished, and many seek for diversification in their sources of income. Platforms such as Upwork, Teamway.io and Expert360 provide more flexible work arrangements for freelancers to take fractional and temporary work on.
π±π±π±π±π±π±π±π±INVESTING IN TALENT SUSTAINABILITYπ±π±π±π±π±π±π±
We can transform the way that we manage Talent, making it more sustainable and a better experience for everyone involved. Companies and HR teams need to start changing their approach from "replacing" to "investing" in people. That means trying to avoid layoffs and hiring sprints by professionalizing workforce planning and getting faster at reskilling and upskilling the workforce.
Workforce Planning
Workforce and Headcount Planning practices need to be aligned with the business strategy and consider the overall workforce (permanent and contingent) as one. Knowledgeable HR experts should be at the table when key financial planning conversations happen. Better planning solutions are needed. ChartHop, Recruitingplan.io, and Headcount365 are just a few examples of providers trying to make things better in this space.
People Analytics
The focus on People Analytics needs to continue. Productivity and engagement have to be discussed frequently, attached to financials, and possess enough granularity to have more meaningful conversations. Better measurements will help us understand short and long-term opportunity costs and benefits of people decisions. Thereβs a new generation of People Analytics platforms that are trying to make sense of it all, including Orgnostic, OneModel, CrunchHR, and OrgVue.
Skills
If we want to get the full picture of what people investments are needed, skill sets (hard and soft) have to be at the core of scenarios and models. Positions are currently the centerpiece of People systems. They are leveled and priced, easier to create and destroy without remorse. Itβs what lies behind the people that occupy positions that can bring closer what companies and employees want. Building a taxonomy of skills that are important for the organization and using it to architect People models will enrich People strategies and tactics. Capturing and validating that data is not an easy task, but one that many have already embarked on. LinkedIn and Workday are two of the largest HR companies that have been strategically leading the way. Players like Reejig and Eightfold provide with talent intelligence platforms powered by AI to accelerate this transformation.
Internal Mobility
People who go through internal mobility within a company stay longer than those who don't. When we invest in the growth of people, they go from languishing and surviving to truly thriving. Investing resources towards building the necessary infrastructure to run Talent Mobility programs systematically is a must for companies that want to make a difference. That can be accomplished by creating a live marketplace to share all types of opportunities transparently (permanent and temporary). A Talent Advisory team can take care of matching opportunities with employee skill sets and interests to stay in tune with the business needs. Platforms like Gloat, Fuel50, 365Talents, and Hitch are enabling organizations that started this journey.
Development
Accelerating the development and delivery of learning offerings in the areas where we anticipate skill gaps to appear is another challenge to tackle. Historically, the development of learning programs has been too slow. Artificial intelligence is offering a great opportunity to change that for good by accelerating content creation. ChatGPT is contributing to a revolution in the industry. Creating, offering, and proactively enlisting people into new learning modules will allow closing skill gaps internally quicker. Supporting people to gain and retain the mental agility to cope with constant change is essential to avoid burnout and keep high levels of engagement. Coaching is a great way to preventively work in mental health with BetterUp, Torch, CoachHub, ModernHealth, and Lyra delivering it at scale.
β‘οΈβ‘οΈβ‘οΈβ‘οΈβ‘οΈβ‘οΈβ‘οΈβ‘οΈβ‘οΈTHE TIME FOR CHANGE IS NOWβ‘οΈβ‘οΈβ‘οΈβ‘οΈβ‘οΈβ‘οΈβ‘οΈβ‘οΈβ‘οΈ
I anticipate that the current Tsunami of Layoffs in Tech will leave some scars. I canβt think of a better time for Leaders and HR practitioners to step it up and embrace a brighter and more stable future. One where Talent Sustainability takes the central stage and we invest in People.