Like many developed economies, Canada’s growth has slowed in recent months. Economic instability is putting pressure on employers to economize where they can in hopes of reducing risk and shoring up their financial stability.
Unfortunately, this pressure historically manifests itself in the form of layoffs and furloughs that typically define a recession. As employers ponder the risks and benefits of these measures, many are endangering their long-term growth by making short-sighted cuts to IT staffing budgets.
The high cost of layoffs
Consider this scenario: Leadership just laid off a large segment of your workforce. It was hard, but you got through it. Now, it's six months later, business is picking up, and it’s pretty clear you need to staff back up again.
The problem? In six months, everyone you laid off has found gainful employment elsewhere because (despite the recession) the talent shortage is still on and the unemployment rate remains low. Even if they were open to changing jobs again, they’re probably not enthusiastic about coming back. Your employment branding (and thereby your ability to recruit great talent in the future) takes a hit if employee separations aren't handled with care.
In this scenario, you’re starting your recruitment process over from scratch with new potential candidates just to get back to where you were six months ago. While you’re spending extra money to attract, screen, and hire new employees, your current employees are burning out trying to fill the gaps created by layoffs.
In addition, there’s a high probability that somewhere along the way your organization also decided to reduce its recruiting staff, too. Now that skeleton crew of recruiters is overwhelmed with new, urgent job openings, your hiring process can be negatively impacted.
1. Leverage the flexibility of contingent labor
Contract talent can be a powerful tool in times of economic uncertainty. For example, you might use contract talent to staff up for a specific project that doesn’t need a team of direct hires to support it.
Alternatively, if you have more work coming in than your current workforce can handle, contract talent can be the perfect solution for fueling growth without adding to your permanent headcount before you’re ready.
Today top talent increasingly prefers to work on temporary assignments vs. as a full-time employee. This arrangement allows them to gain new skills quickly to improve their employability.
2. Prioritize key IT talent segments
If your organization does find itself in the unfortunate position of having to consider layoffs, there are ways to avoid laying off strategically vital or difficult to hire IT talent that could hurt your organization in the long run.
First, take a look at your own data. Are there any roles or specific skill sets that your organization is hiring more often? Which roles take longer than normal for you to fill? What roles have the most long-term strategic importance for your organization?
These kinds of questions can help you identify and prioritize which talent segments in your organization are too important to cut. Going through this process, you might also identify skills that are no longer in high demand or strategically important to your organization. The key markers to look for in a job or skill set that is of declining importance include:
- The skill-set is easy to find and not very expensive (e.g. time-to-fill is low, average salary is stagnant or on the decline, etc.)
- The skills are easy to cross-train for with your current employees
Now, while it’s important to have a clear understanding of what your organization’s particular IT talent needs are, it’s also vital to know what’s happening in a broader context. Talk to your suppliers and ask what they are seeing in the talent marketplace. At S.i. Systems, we handle 1,500 new IT jobs opening per month, and there are a few categories where we’re seeing sustained growth:
- Cyber security: This field has had steady growth in the past few years, but has exploded recently. Ramp up your retention efforts for anyone who knows their way around threat and vulnerability, penetration testing, and cloud security architecture.
- Data and Analytics: The datafication of the economy continues, and we’re seeing massive demand for data scientists, data engineers, machine learning engineers, and data architects.
- Anything Cloud-related: This is another trend that hasn’t slowed down. Organizations are abandoning on-premise IT infrastructure and replacing it with (you guessed it) the cloud.
This list is by no means exhaustive but, if you look at this recent list of the fastest-growing careers from Indeed’s Canadian data, you’ll find that much of it aligns with what we at S.i. Systems are seeing.
3. Don’t be afraid to go on “talent offense”
So far, we’ve been talking about which types of talent to keep on the payroll if your firm is considering layoffs. There is also an opportunity to go on “offense” for organizations that are financially strong and still growing despite the uncertain macroeconomic environment.
As others shed talent in an attempt to stay afloat, your organization might be in a position to strategically hire important, in-demand IT talent at a time when most organizations are frantically trying to protect their bottom line. If this sounds like you, don’t be afraid to make a few high-impact hires. It could set you up to win big coming out of a downturn.
Overreactions have consequences, too
It’s understandable to be concerned about the impact of a global recession on the information technology sector. Will tech jobs decrease in a recession? The answer is probably yes. However, layoffs have a high cost all their own, and, if you get rid of too much talent or the wrong types of talent, staffing back up when the economy improves is going to be that much more difficult.
Don’t forget how hard it was to recruit the high-quality IT talent you have today. Are you prepared to go through that all over again? Or, is there a smarter way to reduce your costs? Or, if you’re fortunate enough to be financially protected from the recession, there could be opportunities for you to make a few strategic additions to your team at a time when your competitors for talent are eager to clear their balance sheets.
If you have questions about how to re-prioritize your IT talent or want to talk more broadly about IT talent strategy, reach out to our team.