future-proofing your business with people-first strategies.
If you’re thinking about layoffs right now, you are not alone. Technology giants and startups alike are taking measures to contain costs amid economic unpredictability. The tech boom of the pandemic – when product demand soared and hiring rose by over 20 percent – has subsided for now. Today, tech companies have to reckon with their pandemic hiring and contend with a market that is wrought with sky-high inflation, geopolitical turmoil and reduced spending.
Hiring freezes only go so far in this scenario, and layoffs are a common cost-cutting solution that enables tech startups to extend financing runways and Big Tech firms to prepare for marketplace changes. However, are they the best first response for businesses or their people? Maybe not. According to the Society for Human Resource Management, employers resorting to mass layoffs ‘often ignore innovative cost-reduction solutions that may fit their cost-cutting environment.’
Fortunately, you have viable alternatives to consider. Workforce solutions such as talent mobility can help you build an agile workforce while enabling you to contain costs, advance long-term business objectives and remain a top talent destination when the market rebounds.
factoring in the new normal
As you evaluate your workforce strategies now, you’re doing so in the new norm. Unpredictability reigns in today’s employment landscape – and it has since the pandemic completely transformed the global talent market. In addition to economic volatility, HR leaders face enormous challenges related to talent scarcity and growing skill gaps, especially in the tech sector. You’re juggling a perfect storm of workforce complexities.
That’s why it’s more important than ever that you make significant decisions regarding layoffs with a long view of your current and future landscape. It’s a chess game. While you plan ahead, market fluctuations will always be a critical consideration. Yet, ensuring employee engagement – through talent mobility and skilling – is increasingly vital as you move forward to meet ever-evolving market dynamics and business needs.
staying ahead of talent scarcity
As businesses struggle to fill roles across nearly every pay grade, talent scarcity represents one of the most dramatic cultural shifts in the new norm: Today’s job market is talent-driven – and employers no longer call all the shots.
This shift toward an employee-centric workplace stems from the pandemic, when people were able to reevaluate their ability to have more fulfilling and meaningful lives and work. As a result, they quit their jobs in record numbers – and made it clear that career satisfaction and personal well-being were their top priorities. Now, business leaders are making people-first talent strategies a top priority as well.
The challenges of talent scarcity are particularly fierce in tech, according to McKinsey, where demand grows exponentially for specialized skills in software engineering, data management, platform design, automation, cybersecurity and more.
When your talent is your greatest asset, its profound impact on your ability to advance business innovation and market leadership cannot be overstated. Adopting alternatives to layoffs through talent mobility strategies may be your best long-term solution.
stemming the skill gap crisis
As technology usage accelerates across all industries, the skills shortage also poses an enormous threat to workforce management today. If anything, the skill gap crisis highlights the tremendous loss of layoffs. When you lose your valued employees, you lose the invaluable skills they provide to keep your business thriving. In the highly competitive tech sector, the impact of this loss can be especially damaging.
A recent McKinsey survey found that 87 percent of executives said their organizations are currently experiencing skill gaps or expect them to emerge within a few years. Digital skills are particularly at risk, and many global workers feel unequipped for the future of work. Randstad Sourceright’s 2022 Global In-demand Skills Report shows that the top 10 in-demand skill clusters across 26 markets globally include:
- artificial intelligence and machine learning (AI/ML)
- cloud computing
- big data
- business intelligence & data visualization (BI/DV)
- user interface & experience design (UI/UX)
- mobile app development
- customer service
- sales & business development (BD)
- financial management/budgeting & accounting
To meet these growing demands, building a comprehensive employee-first plan to skill and reskill employees and transition employees to new positions helps future-proof your organization. Fortunately, opportunities for knowledge sharing and skilling are growing as well, and HR leaders are gaining a clearer understanding of what their people need to help their businesses thrive.
embracing talent mobility vs layoffs
Talent mobility refers to the fluid movement of people within and out of an organization and presents a powerful solution as you take steps to avoid layoffs. Engaging and retaining your people in finding new opportunities within your organization through internal mobility and redeployment is a preemptive measure – and your best first line of defense when you’re considering layoffs.
Through upskilling and reskilling, talent mobility enables employees to benefit from expanded career options, improved job satisfaction and longer tenure with a company. At the same time, a long-term talent mobility strategy enables organizations to remain competitive and quickly shift gears in volatile economic environments. Ultimately, talent mobility allows you to improve engagement and retention while building a sustainable, productive and loyal workforce with employees already a good cultural fit. It’s the ultimate win-win.
Companies that invest in their employees will find many advantages to creating an agile workforce:
- lower recruitment costs
- reduced time to fill open positions
- faster time to productivity for new hires
- higher employee loyalty, productivity and retention
- quicker development of new solutions or services
While an active and well-promoted internal mobility program can serve as a tool to increase workforce agility, engagement and retention, it’s also highly appealing to your existing talent. Our recent worklife coaching report showed that ‘nearly all employees (87%) who want to change roles would prefer to do so in their current organization.’
surviving and thriving in times of change and growth
Organizations that embrace talent mobility are able to survive and thrive through times of disruption by promoting agility at every stage of the employee journey. These capabilities are equally essential when your company needs to readily adapt to new market dynamics, when lack of a plan and properly skilled employees often leads to a crisis situation.
Companies that have an impactful talent and career mobility strategy are continuously:
- learning about the skills of their employees
- communicating opportunities to employees to use those skills
- developing new skilling and reskilling programs
- encouraging the development of new skills
- creating career pathways for employees that extend beyond their current job function
future-proofing your business with people-first strategies
These are challenging times in workforce management. In an era wrought with talent scarcity, mounting skill gaps and economic uncertainty, can you afford to let your valued talent go? And, if layoffs are unavoidable, are you prepared to upskill and reskill your existing talent so your business maintains its competitive edge? Most importantly, if you initiate layoffs, how will you ensure they’re handled with the highest professionalism to take care of your people and safeguard your brand
If layoffs are unavoidable, the support of professional outplacement services and solutions can help you mitigate the impact while providing your employees with a severance package that can add value and deliver the empathy and care they deserve throughout their transition.
As you navigate ever-shifting global demands, a viable option to manage market-related fluctuations is to work with an external provider. Turning to modern outplacement and career transition firms provides you with industry-leading talent mobility solutions to optimize all of your workforce management needs. We offer expert solutions to help organizations achieve higher levels of agility and responsiveness to meet dynamic talent demands.
Learn more about tech trends and right-sizing in the post-pandemic economy. Download our report from layoffs to rebuild: workforce right-sizing in the tech industry.