Amid the cascade of tech layoffs, I don’t see companies taking a conscious look at all the risk involved. Perhaps it’s time to start changing the conversation.
There are a variety of reasons why the tech industry is shedding so many people.
One is that tech people have gotten used to being seen as a necessity. We’ve forgotten about proving value. How often do you hear about people in accounting or sales or legal being laid off when companies want to reduce costs? That’s because they persistently find ways to prove value to the company. We, too, need to take the time to continuously prove value to an organization.
Another thing that’s made tech people easier to lay off is availability. There’s a misconception among corporate executives that tech people are easy to find and easy to replace. But these executives aren’t thinking about the value of institutional knowledge. When a company lays off people who know the historical context of why certain decisions were made, the quality of the technology will suffer, because the company will have lost the institutional knowledge that was the base for that product in the first place.
Another thing that makes tech layoffs easier is the fast-follower idea. For some reason – – and I don’t know why – companies always look first at workforce reduction as a way to prove to investors they’re making themselves more efficient.
As an investor myself, when I see workforce reduction, it means a company hired people they didn’t need. I see bad management.
So instead of cutting headcount, how about changing market strategy, or product strategy, or how you reach out to customers and provide services? Get honest about whether you’re competing in the right places, and put the right effort behind how you sell your product or service. I understand that’s hard work, but I think more executives need to focus on structuring their businesses better instead of blindly laying off people to play the numbers game.
I offer this as a cautionary tale to executives from a security standpoint. Because the things that make it easy to get rid of tech people in the short run make it more dangerous for companies in the long run.
One thing that keeps cybersecurity professionals up at night is the employee who is treated badly. True harm could be caused by disgruntled employees in the digital space. They represent a material risk with respect to intellectual property and reputation, as well as from the standpoint of their systems knowledge. With so much work being done remotely, they’re an even greater risk than before.
Businesses have to reevaluate their rationale for cutting talent, because ultimately, what distinguishes a business is not that they’re best in class or any other such platitude. It’s some discrete technology that senior executives are not thinking about.
Getting rid of the wrong employee, then, puts that employee in the next company’s hands. And what was a competitive advantage for you has now become a competitive advantage for somebody else.
This is truer in the tech space than anywhere else. Too many companies are putting themselves unnecessarily in harm’s way because they don’t think about their employees as a center of risk. They think of them as a cost center. If they shift the dialogue to take a risk-based approach to layoffs, then they’ll think twice about getting rid of people for cost savings.
This takes me back to my earlier point about technologists needing to prove value. When we show value, it makes it easier for a company to say we cannot lose that department, or that team or that person. You show value with data that backs up what you’re doing, KPIs and metrics from every facet of the business.
By this same token, companies have to work to keep valuable people. They need to recognize the value we show and the efforts we make, and provide things we need for us to remain comfortably and happily at the firm. If we balance things out so it feels more like a 50-50 proposition, we’ll see less turnover and greater employee satisfaction. Valuable people shouldn’t have to worry about being laid off.
And as for investors, our ears aren’t perking up when we hear a company is letting people go to save money. For investors, the only gauges are the share price or the dividend. For us, it’s just about dollars and cents.
If companies start to recognize this and begin evaluating whether they’re providing the right value to the people who consume their products or services, then we can change the narrative away from this risky approach of let’s slash payroll.