Your HR Pro

Difficult financial times sometimes call for difficult employment decisions. Your company might consider laying off employees to meet financial requirements. As a talent management professional, this can be frustrating. All your hard work to collect all these talented individuals is about to walk out the door. Is there a way to salvage your top talent?

In this article, we will look at trends in the market, managing your talent, and repurposing or reassigning employees rather than laying them off.

Talent Trends in 2023

With tough economic times hitting many firms in 2023, many companies have announced layoffs, with the tech sector being a significant contributor. Experts speculate that many tech companies were hoarding talent just in case they needed to fill their talent pipeline, and some even claimed that firms had employees doing fake jobs.

While some firms are still posting fake jobs to fill their talent pipeline for hard-to-find roles, especially in engineering, many companies are taking a step back from hiring. They are re-evaluating compensation ranges and benefits to align with a more attractive labor market for employers.

Your Talent Management Function

Every organization is concerned with managing its top talent and ensuring they have a pipeline of new talent available. For fast-growing organizations in knowledge fields, this is critical to their success.

Talent management attracts, develops, engages, and retains high-quality employees who can contribute to the organization’s goals and performance. It is important because it can help organizations improve performance, stay competitive, drive innovation, form productive teams, decrease turnover, and enhance employer branding.

Every good talent management program needs a strategy. A talent management strategy is a plan that outlines how an organization will manage its human capital to achieve its business objectives. A talent management program typically includes the following components:

• Recruitment: This involves attracting and hiring qualified candidates who fit the organization’s culture and values.
• Hiring: This involves selecting and onboarding the best candidates who meet the requirements and expectations of the role.
• Engagement: This involves creating a positive work environment that motivates and empowers employees to perform well and stay loyal to the organization.
• Development: This involves providing learning and growth opportunities for employees to enhance their skills, knowledge, and competencies.
• Performance management: This involves setting and measuring goals, providing feedback and coaching, and rewarding and recognizing achievements.
• Recognition: This involves acknowledging and appreciating employees’ contributions and efforts to the organization’s success.
• Succession planning: This involves identifying and preparing high-potential employees for future leadership roles.

A talent management program can vary depending on the organization’s size, industry, and culture. However, some common practices that can improve the effectiveness of a talent management program are:

• Aligning talent management with business strategy: This involves ensuring that the talent management program supports the organization’s vision, mission, values, and goals.
• Using data and analytics: This involves collecting and analyzing relevant data to inform talent decisions, such as hiring, development, retention, and promotion.
• Fostering a culture of learning: This involves encouraging employees to continuously learn new skills, share knowledge, and seek feedback.
• Embracing diversity and inclusion: This involves valuing and respecting employees’ differences and creating a sense of belonging for everyone.
• Leveraging technology: This involves using digital tools and platforms to streamline talent processes, such as recruitment, training, assessment, and communication.

What alternatives are there to layoffs?

In a right-sized organization, there should be enough people to do the work, right? There should be no need for layoffs assuming the volume of work hasn’t changed? Yes, and no. To maintain an equilibrium, companies must have enough employees to manage the daily work, provide coverage during vacations and unexpected absences such as FMLA, coverage for vacant positions, and a pipeline of talent that can step into new openings. Even in lean organizations, there must be some “fluff”; otherwise, a firm will quickly burn out its employees.

Some companies are more “fluffy” than others. Those very “fluffy” organizations can lay off staff without too much impact on the daily routines of getting the work done. On the other hand, lean organizations need to be more creative.

Here are other strategies to avoid layoffs:

1. Voluntary pay reductions by executives. Voluntary pay reductions are when executives give up some of their contractual rights to compensation to realize financial savings for the company. Some firms share this information with employees and shareholders to reinforce leadership’s commitment to the company. These reductions or givebacks are not always made public.
2. Pay and benefits cuts. General pay cuts, bonus/incentive reductions, or elimination of benefits or other perks may be another alternative to avoid laying off staff. This strategy can demoralize employees and may cost talent as your top performers may not want to stick around for pay to return. Pay cuts may be distributed as a set percentage company-wide or prorated based on other factors. Elimination of benefits is another strategy a company can look at. Be cautious about eliminating specific benefit programs so that it doesn’t have a disparate impact on select populations.
3. Furloughs. A furlough is a temporary pause in work where employees retain their job but are not paid for a specified period. Furloughed employees may be able to seek temporary work elsewhere or receive unemployment benefits during their time off, depending on the state and their contract with their employer.
4. Hiring freeze. A company-wide hiring freeze is a good measure because it signals to employees that no new employees will be brought on while there is a consideration of laying offs. During a hiring freeze, an employer may increase the employee’s roles and responsibilities to provide coverage for those employees who have left the organization through natural turnover. One strategy is job sharing, where two employees split a role. Any new assignment of duties must be taken with care and consideration of your firm’s overall compensation program. Often, employees will expect compensation for taking on new responsibilities.
5. Reassign/realign/repurpose. Later in the article, we talk about redeploying your existing staff rather than laying them off. Continue reading to learn more.
6. Contract labor. It’s in poor taste to hire new employees right after layoffs. Vacancies will arise naturally as a matter of business. You may consider hiring contractors to fill in the gaps on your teams. If your company’s financial circumstances change, consider re-hiring your laid-off talent or hiring them back as contractors.

Companies are receiving greater scrutiny due to their continued use of layoffs with a call for accountability from users on social media, traditional media, and even among their peer institutions.

Layoffs have a detrimental effect on employees and corporate performance. The short-term cost savings a layoff provides are often overshadowed by bad publicity, loss of knowledge, weakened engagement, higher voluntary turnover, and lower innovation — all of which hurt profits in the long run.

Layoffs are seen as a sign of poor leadership and management. Companies that resort to layoffs are often accused of having an unsustainable and destructive “growth at all costs” mentality. Alternatively, companies that avoid layoffs are praised for being transparent, creative, and humane in dealing with financial challenges.

Layoffs are not inevitable or necessary. There are other ways to reduce costs and improve efficiency without layoffs.

Do you have employees whose skills could be repurposed?

A good talent management program will have an assessment of current employees’ talents and abilities. There are different methods and tools you can use to evaluate your employees’ potential, and some of them are:

• Look at the information you already have: You can review your employees’ resumes and performance data, such as feedback, ratings, goals, achievements, or awards. These can give you a sense of their strengths and areas for improvement.
• Use self-assessments: You can ask your employees to rate themselves on various skills or behaviors or to identify their interests, values, and career aspirations. These can help you understand their self-perception and motivation.
• Do a 360-degree review: You can collect feedback from multiple sources, such as peers, managers, subordinates, or customers. These can provide a comprehensive and balanced view of your employees’ talents and performance.
• Conduct assessment tests: You can design or use standardized tests to assess your employees’ knowledge, skills, or abilities in specific domains. These can help you benchmark your employees’ proficiency levels and identify skill gaps.
• Think ahead: You can align your talent assessment strategy with your long-term business goals and vision. This can help you identify the skills and traits that will be needed in the future and spot the employees with a high potential to grow and succeed.

Use a 9-Box Grid for Talent Evaluation

Once you’ve collected all your employees’ capabilities, it’s time to categorize them for potential with your organization. One method is using a 9-box grid typically used for succession planning. This tool can be beneficial for identifying the top talent so you can ensure they are placed elsewhere in the organization rather than displaced.

When you plot your talent in the 9-box grid by their performance and their potential, you can identify the development actions needed to prepare them to move into new roles.

To place your employees in the 9-box grid:

1. Review their current performance. Categorize their performance among one of the three groups: exceed, meet, or not meet expectations.
2. Review their potential. Potential is measured differently from organization to organization. Typically a high-potential individual will have ambition, ability, and commitment. There may be other factors that identify high-potential employees with your company. Meet with your leadership to determine what those characteristics look like. Those characteristics should not conflict with your company’s core values.

	Current Performance
Potential	Does Not Meet Expectations	Meets Expectations	Exceeds Expectations
High Potential	MISPLACED EMPLOYEE > Coach/Develop A high-potential employee with poor performance is typically not engaged. The manager must focus on identifying the cause of poor performance. Review their skills, and put a development plan in place.	GROWTH EMPLOYEE > Push This individual could be ready for a promotion with increased performance. Focus on managing this employee to contribute to a higher level and consider giving them stretch assignments to challenge their skills.	FUTURE LEADER > Promote This individual has mastered their current role and is ready for a new challenge, which may include a promotion or challenging assignments that seek to keep them engaged.
Medium Potential	UNMOTIVATED EMPLOYEE > Coach With moderate potential and not meeting expectations, this individual’s manager must focus on turning performance around. Uncover why performance is lower and take action to improve it.	SOLID PERFORMER > Develop Work to increase this individual’s performance through stretch assignments, providing broader scope, or increased responsibilities.	HIGH-IMPACT PERFORMER > Push This is a great candidate for growth and development. The manager must work to prepare this individual for a broader scope of roles and responsibilities. Concentrate on overcoming skills gaps with training.
Low Potential	BLOCKER > Coach/Exit With limited potential and not meeting expectations, this individual’s manager must focus on turning performance around, finding a better-fitting role, or moving them out of the organization.	POTENTIAL BLOCKER > Observe A consistent contributor with limited potential can be focused on maximizing performance, which may require moving to a different role.	TRUSTED PRO > Develop A strong performer who has low potential to move into a higher role is someone you want to keep. The manager must focus on this individual’s continued motivation and commitment. Consider using this individual to develop others.

Can I rearrange my employees with quiet hiring?

Quiet hiring is a term that describes a hiring strategy where employers add new skills and fill gaps without hiring new full-time employees. This can be done in two ways:

• Internal quiet hiring: This involves moving current employees to other roles or tasks within the same organization, either temporarily or permanently, to meet the changing business needs.
• External quiet hiring: This involves hiring short-term contractors, freelancers, gig workers, or alumni to perform specific work without adding new headcount or benefits.

Quiet hiring can benefit employers who want to save costs, increase flexibility, and adapt to uncertain market conditions. However, it can also pose some challenges, such as:

• Communicating clearly and transparently with employees about the reasons and expectations of quiet hiring.
• Managing the impact of role changes on employees’ motivation, engagement, and career development.
• Ensuring the quality and alignment of work done by external contractors or gig workers.
• Balancing the short-term and long-term talent needs of the organization.

Quiet hiring can also be an opportunity for employees who want to learn new skills, expand their network, and advance their careers. However, it can also require some adjustments, such as:

• Being open and flexible to different roles or tasks that may not match their current skill set or interests.
• Seeking feedback and guidance from managers or mentors on their performance and development.
• Negotiating their compensation and benefits if they are moved to a new role or task.
• Leveraging their existing skills and experience to add value to their new role or task.

It can be a win-win situation for employees and organizations if they communicate effectively and align their goals and expectations.

You cannot just reassign employees to new roles. That leads to distrust from your employees. Sudden shifts in work give a lack of stability and will cause panic. Your employee may start looking for other work, and have many others concerned that their roles are next.  

Design new roles with job descriptions, titles, and compensation packages like any other open position. Typically, as layoffs are announced, so are new assignments.

Repurposing your employees can be a good strategy for saving your top talent during tough financial times. Ideally, identifying top talent will be ongoing and part of the company’s growth strategy.