The first thing business leaders learn about layoffs is all the smart people outside the company think they’re a terrible idea.
“There’s an old motto that people are a company’s most important asset. Layoffs demonstrate the hollowness of that statement,” Stanford Organizational Behavior Professor Jeffrey Pfeffer recently wrote.
“If the purpose of layoffs is to reduce operating costs [and] increase earnings and stock prices, history casts serious doubt on the long-term payoff of this approach,” an Academy of Management Perspectives meta-analysis of 113 studies of layoffs at S&P 500 firms over a 20-year span concluded.
There are plenty of experts to cite on the financial, strategic, and human costs of layoffs, from decreased productivity, engagement, and innovation among remaining employees to increased deaths among managers who carry out layoffs.
And yet, when revenue declines – due to macroeconomic conditions or situations unique to individual organizations – layoffs are a reality of business life.
How HR Tech helps before & after
Successful organizations must make smart decisions about layoffs, then pursue a post-layoff people strategy that positions the organization and its employees for future success. The new generation of HR Tech helps companies make those better decisions at this crucial time.
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Everyone agrees layoffs should be designed and executed surgically. The organization must retain people with the specialized skills and knowledge it can’t easily hire back when conditions improve.
AI-powered digital HR Tech enables deft microsurgery through skills and people assessments that inventory not only present and future needs, but also remaining employees’ career aspirations/trajectories, upskilling/reskilling capability, and the potential to take on new jobs in the future.
Leveraging Skills Profiles and other digital solutions, HR Tech maps skills across the organization and across time – skills needed today and tomorrow – using a Y-axis of potential and an X-axis of performance. These maps identify employees with skills useful elsewhere in the company or in the future success of the organization.
Building a better future after layoffs
After layoffs, effective managers build a better future for their organizations by investing vigorously in the employees who remain to keep them motivated, engaged, productive, loyal, and happy with their career development and advancement.
When better times return, as they always have, these are the employees companies will need.
The investment needn’t be more money. Thanks to progress in HR Technology, it’s now possible to “invest” meaningfully in talent transformation strategies at scale for the next leap forward without spending much. One example: laser-targeted Learning & Development resources that give employees the exact resources they’ll need to upgrade their skills without overwhelming them with L&D’s “Problem of Plenty” that paralyzes progress with cascades of unnecessary resources.
Leaders must elevate their team’s mood after layoffs by demonstrating commitment to remaining employees as assets to be developed, not costs to be cut.
Sounds great. So what should I do on Monday morning?
The first big step is showing employees the journeys they need to take for future success – theirs and the organization’s. Once business priorities are reset and role expectations communicated, the same HR Tech that helped micro-target layoffs now creates customized GPS maps for each remaining employee’s forward journey through skill-building.
For the organization, HR Tech automates job architecture analysis, mapping, and creation after layoffs to prioritize critical gaps that need to be addressed. Can roles be combined? What talent can be redeployed to higher priority roles?
Do remaining employees want to move up into leadership, change careers, or dig even deeper to become better performers in the role they’re in today? No matter the answer, HR Tech illuminates the road ahead.
HR Tech builds agility muscle that must be strengthened after layoffs, training employees in such competencies as agile thinking and adaptability.
Critically, HR Tech offers leadership development and coaching at scale to help often-maligned middle managers become the inspiring leaders newly reset organizations need. Middle managers who become leaders are essential sparkplugs who inspire remaining employees on their career journeys.
HR Tech provides tools to answer every question that arises.
Beyond HR Tech: The human element
Ask for volunteers at times of strategic change. Whether contributing change championship or pitching in to help with short-term projects, volunteering makes change feel like a group effort, not just a top-down decree. Leaders are often surprised how many team members gladly offer time and expertise to help out colleagues and the organization.
It’s vital to celebrate successes. Remaining employees need refreshing jolts of positivity. Celebrate colleagues who volunteer to ease the discomfort of change, step up into expanded roles, or propose innovations. HR Tech collaboration tools offer ways to recognize and offer these invaluable kudos to colleagues at scale.
With the right HR Tech solutions supporting an empathetic people strategy, the most difficult moment in an organization’s life can be turned to everyone’s advantage when leaders prove they value their people as the prime source of next-wave innovation and renewal.