During the COVID-19 pandemic, the world of work changed overnight, and organizations had to make tough decisions to survive the economic downturn. That meant cutting jobs to minimize expenses. Even tech companies on a hiring spree were laying off workers to survive the economic downturns globally.
But as demand returned, those same companies struggled to hire back the people they needed to meet customer needs, stifling growth and recovery. Talent scarcity stood in the way of company goals and, as a result, employers found themselves offering unsustainable salaries and exploring new ways to acquire skills. Now, yet again, many are facing the need to right-size, opening their organizations to risk and scrutiny.
As more companies consider layoffs in today’s uncertain economic environment, there are lessons to be learned following the pandemic. Are layoffs always necessary or can other talent strategies help businesses build more agile, sustainable workforces long-term? What does a company lose during layoffs, and can it reduce costs without losing crucial members of the workforce?
what does a reduction in force cost?
Managers often underestimate the actual cost of a reduction in force. The direct and indirect costs usually range from severance packages and legal fees to loss of productivity, damaged reputation and lower profitability. How can a company retain its best talent, avoid employee layoffs and still make savings when necessary?
Redeployment of talent and more proactive reskilling can help your employees develop the skills the organization needs while strengthening their resilience to withstand tough economic conditions in the future. It can also build greater workforce agility, helping you to deploy skills when and where needed, and workforce loyalty as people feel valued.
In fact, according to Randstad Enterprise’s 2023 Talent Trends Report, 23% of companies are concerned that they will fall behind their competitors if they make cuts this year. At the same time, one in three expect career mobility and redeployment to be vital talent strategies, which may be why 56% report they are increasing spending on internal mobility.
what is redeployment?
To avoid or minimize layoffs, many organizations use workforce redeployment to transfer current employees to new roles within the company. If you introduce more structured redeployment in your company, you future-proof your workforce and prepare them for new positions that may arise — now or in the future.
For instance, technology dictates the most in-demand skills in the current job market. If your organization provides training and development to help workers learn emerging skills, you can move employees to new positions instead of having to bring in these hard-to-find skills from outside. If employees are constantly developing their skills to keep pace with business needs, and are encouraged to be more internally mobile, you can transfer employees from low-demand roles to high-demand roles instead of laying them off.
Redeployment helps both the employee and the organization. It’s a win-win. Your company benefits from improved retention, better internal networks, more collaboration and less siloed thinking; and workers benefit from broadening their skill set and becoming more flexible and adaptable. Your organization continues its relationship with talent who already understand your business and are loyal, and your people get greater job security and stability.
In short, internal mobility strategies strengthen your workforce and improve innovation. And, this strategy can also help you source skills quicker than hiring new talent from outside the organization.
But, for a redeployment program to work successfully, an organization must provide ongoing upskilling or reskilling opportunities to workers, as well. Skills mapping and understanding both transferrable and adjacent skills can make a big impact when identifying which training programs will be necessary.
For example, people in Product or Engineering teams can make great salespeople because of their product knowledge. Recruiters can make great internal career coaches; or Finance professionals can transfer their skills to Operations or Strategy.
If you have an accurate and up-to-date profile of your existing workers’ skills, and a good map of the skills and capabilities you need in the near future (both volume and depth), matching tools can also help you identify where the gaps are. This allows you to promote the right kind of skills development to your employees — knowing that you have capacity to redeploy them to in-demand areas and simultaneously reduce your headcount in areas where you have surplus supply.
the benefits of redeployment and internal mobility
The current labor market is unpredictable. Organizations are planning layoffs to reduce payroll and survive economic downturns, but with 83% of business executives focused on business growth, they still need to attract and retain great talent. Investing in your workforce can help you do both by offering career growth and stability during a time when other organizations are making cuts.
According to Randstad’s Workmonitor, 52% of employees are worried about job security. If you introduce greater talent mobility, however, you boost employees' confidence in their job security, which improves morale and productivity. Your employee satisfaction ratings after investing in redeployment and upskilling will likely be higher, promoting your employer brand.
An internal mobility offering can also help you build a more sustainable workforce long-term, setting your business up for success as demand and growth return. This can also prevent the cycle of massive hiring and then layoffs as business needs shift, helping to protect both your employer and consumer brands as people build trust in your business strategies.
And, if your business plans to expand into new markets or incorporate new offerings into its model, your workforce is already primed to upskill, adapt to change and meet your future needs more quickly because it will already be a part of your company’s culture. By retaining more employees and reducing churn, you sustain institutional knowledge and diverse internal networks for a smoother transition and response to any organizational change.
As the economy recovers, you’ll have lower dependence on acquiring new talent externally with an agile workforce. And when you do need to recruit externally, your employer brand will be well-supportive and more attractive. It’s one of the many reasons that, even as we face economic uncertainty, the talent experience still matters.
embrace talent mobility
A successful redeployment plan helps you avoid employee layoffs in the short term, and is a long-term talent mobility strategy that’s worth embracing. Redeployment and internal mobility value continuous learning and provide you with the right skills for emerging business opportunities. Employees will be more productive as they learn new skills that contribute to their career growth — and you’ll see the benefits in improved retention, engagement and productivity.