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"Business started to devalue people," observed Adam Wardel, CLO of nClouds, of the 2007-09 Global Financial Crisis. "Upper management began to think more about the bottom line and lost sight of people's value, seeing them as a dollar amount."
Fast-forward to 2023, and as once again we are dealing with an economic storm, Wardel's remarks should be noted - and avoided. Sure, the intention of businesses is to make a profit, but doing so to the detriment of retaining top talent is never a good idea.
Yes, a recession does call for companies to "batten down the hatches" as Wardel says, and tech companies in particular have been doing exactly that, but in the form of cutting costs, ie, their employees. According to layoffs.fyi, more than 105,000 people have been laid off by tech companies in 2023 to date. To put that in perspective, in the whole of last year, employers in the tech sector cut 150,000-plus jobs. That we're only halfway through the second month of this year and layoffs are already two-thirds of that figure is alarming; ominous for many who work in the sector.
First and foremost, reducing people to their salaries is no way to treat people. Wardel reminds us that treating people with integrity and kindness should always be a business priority. Wardel implores us to think of the people, children, and dependents that rely on someone's salary - your staff aren't just a figure in a spreadsheet. They are human. Sweeping the rug out from a person who thought they were in a stable job is hugely disruptive and has a butterfly impact on many other lives. This is precisely why Wardel is an advocate for hiring with intention. He says companies should be prioritizing ways to cut costs before cutting people's livelihoods. An overlooked but proactive way to do that is to be "more thoughtful about who we hire and why."
Intentional hiring means playing the long game and taking time to assess where critical resource gaps are and what kind of people will add value to the company. It's about seeing people as humans with boundless potential and not as a payroll obligation that performs a particular role. Wardel advises hiring talented people who can help better your company, not merely fill a gap. He cautions that when times are good and businesses are flush with money, they should not rush to expand headcount.
Not only do layoffs negatively impact people, but they are also a genuine risk to businesses. "There's a lot of liability and risk to having people and then letting them go," Wardel says. "Employment is one of the biggest risks a company faces." He regards the current knee-jerk firing as a mistake and urges employers to consider the intangible value of people rather than diminishing their importance, thus making them an easy way to cut business costs.
In the same vein, retention also proves to be a massive challenge for companies. As a leader, Wardel often finds himself pondering ways to reward and fulfill great talent and what he can do to make them want to stick around. "These days, people have expectations of health and dental benefits, unlimited time off, snacks in the break room and other perks, but I feel they are becoming a little trivialized."
He's not wrong. As work perks become the norm, people expect more than just a Nespresso machine and a great leave policy to make them want to stay. Wardel believes what they're really after is the opportunity to grow. "If you want to keep the top talent, you have to tell them you think they are talented and you want to grow that talent."
That means explaining how you will support them, the opportunities they will have to grow vertically, and the new responsibilities they can take on in order to be promoted. If they choose not to focus on growth, that's fine too, but as Wardel says, talent is hungry for opportunity. What will set a company apart is when its talent has a roadmap of the educational tools, certifications, management skills and leadership opportunities the job offers them.
Company hopping is both a risk and a reality. Many professionals jump jobs in order to level up. Yet Wardel believes the trend won't last. Why? "Because there's a lot of value to your career in staying put, getting established, and with having contacts and mentors who will advocate for you."
