2022 has been a year for the history books for business leaders–and it doesn’t seem to be slowing down.
Amidst an ever-growing talent shortage and seemingly indomitable virus, leaders are juggling a wholesale re-envisioning of the workplace (do we go hybrid? Full-remote?) while trying to attract and retain talent who are still in the mindset of the Great Resignation.
Now, a looming recession threatens to strike just two years after the last one, leading many to fear sweeping layoffs of the global workforce.
This presents a catch-22 for already-overworked HR leaders. How can companies cut back to survive a shrinking economy when they’re short-staffed to begin with? The tech skills required to stay afloat — let alone competitive — are on the rise without talent to fill them. By 2030, there will be a global talent shortage of more than 85 million tech workers, representing a loss of $8.5 trillion in annual revenue for the economy. This begs the question, can companies afford to downsize?
We know this complex problem just piles up competing priorities for business leaders to process. You’re already busy, with constant pressure to show immediate results. However, in a landscape where recessions typically last about ten months on average, it’s necessary to act in the long-term interest of your business and, more importantly, your people to come out stronger on the other side. To help you make a plan, we’ve outlined 3 steps you can take right now to start recession-proofing your talent.
3 STEPS TO RECESSION-PROOF YOUR TALENT
1. Understand the talent you have and the talent you need
It can be tempting to assume that layoffs are a necessary step in a recession — but don’t because there’s no guarantee you’ll be able to rebuild your staff. Beyond that, companies who conduct layoffs still see immediate stock slumps and multiyear profitability declines, despite efforts to cut costs. At a time when lack of talent drives $162 billion of unrealized revenue each year in Silicon Valley alone, filling skill gaps may be the most effective short- and long-term path to a recession-proof business.
Of course, this is not simply a game of numbers in your org chart. To identify the talent, you need to achieve profitability goals and start to get curious and creative about the skills already within your org chart. Before doing anything, it’s important to work with other leaders to answer these key questions:
- Does your business structure still make sense for you to meet your goals?
- Are there antiquated departments or roles that could use an upgrade?
- If so, what will it take to modernize those roles? Are there open roles existing employees could fill with the prerequisite skills or potential?
- If you do have to do layoffs, is there a way to funnel those laid-off back into the workforce in new, tech-adjacent roles?
- Instead of bringing on full-time talent, can you consider apprenticeship models to get key projects off the ground?
Examining the gaps you need to fill will help you separate the roles for which you’ll truly need to hire from areas where you can promote from within, keeping cultural continuity, bolstering morale, and avoiding the skyrocketing salaries of the tech talent market.
2. Continue or start to invest in employee skilling
Now you’re ready to build recession-proof skills within your org. This is where some leaders may face pushback from holders of the purse strings, as employee incentives are often the first expense line to go when belts need to tighten. Think twice about this: building up employee skills is a key part of preparing for a recession, helping to drive flexibility, creative thinking, and a connection to the business to motivate the productivity that gets businesses through hard times.
Whether you’re already investing in skills or looking to get started, the foundational knowledge of what you have to work with will help you allocate your efforts strategically to get the best return on your skilling investment. Based on your needs, there are two options for modernizing your workforce, and each style can play a key part in your skill-building strategy:
- Upskilling is ideal for filling more technical or senior roles with employees currently on that career path. For example, suppose you have a team of individual contributors seeking a leader with data skills. In that case, the right upskilling in data or leadership can help you level up an employee into a management role.
- Reskilling, in contrast, is ideal for when you need to strategically reallocate talent from one field to another. This is most effective when you understand the current skill sets of your talent — from hard skills like proficiency with numbers (from within orgs like accounting) to soft skills like determination, motivation, and commitment — and use those to direct employees into the recession-proof jobs that drive innovation.
Not only will skills investment help your employees get you through the dips and pivots to come, but it is key to building trust and loyalty within your organization during talents’ ongoing search for fulfilling work.
3. Be as transparent as possible & lead by example
2022 is still the year of the employee, as the impact of the Great Resignation reshapes the workplace. While quitting has slowed, talent continues to look critically at their work environments for opportunity, meaning, and a foundation of trust. To retain these employees, communication is key — especially now.
Economic instability can create uncertainty for your employees, particularly when layoffs are seemingly happening everywhere. If your employees suspect their jobs are at risk, productivity will plummet. That’s why it’s critical to get ahead of the rumor mill and lead with transparency.
Invest in frequent, proactive communication to share with employees how you are preparing your business for the future. Be sure to communicate the ‘why’ behind all of your steps to modernize — especially if they involve strategic reskilling and upskilling to give them recession-proof skills that will preserve their jobs — where employee motivation is key to their (and your) success.
More importantly, make sure this strong communication does not stop with the HR team. To inspire morale across the organization, the entire leadership team must stay connected to their employees and keep a united front about any upcoming changes. A disconnected leadership team is one of the top warning signs for the toxic business culture that employees are fleeing during the Great Resignation, but if your leadership team can get aligned and communicate proactively, you can maintain the foundation of trust needed to keep your workforce performing.
Don’t stall on building recession-ready talent
Just as the time to repair the roof is when the sun is shining, the time to craft your recession plan is before it hits. That way, if or when belts get tighter, you will know what to do to set your team up for success across the board: success in motivation and loyalty, success in business momentum, and ultimately, success in winning revenue for sustainable growth.
General Assembly has been helping businesses like Disney, Macy’s, and more modernize their teams for over 10 years, including during the COVID-19 pandemic.
If you’re interested in learning how we can help you, too, get in touch.