Editor’s note: The following is a guest post from Susan Robinson, EY Global TMT People Advisory Services Leader.
Employees looking elsewhere is just one of the challenges facing tech companies in an increasingly volatile talent market. Recent reports of layoffs by tech businesses have been well-documented, with the pandemic and supply chain disruption driving huge workforce disruption.
As of February, it is estimated that US companies had laid off more than 100,000 tech workers since the start of 2023. Yet, those cutbacks are only a fraction of the 1.3 million jobs added by the U.S. tech industry in the past five years, according to the U.S. Bureau of Labor Statistics.
The overall message for tech businesses is that we’re in turbulent economic times that may require hiring freezes and layoffs, and where the fragility of their workforces has become increasingly clear.
To navigate through this environment, companies must undertake a strategic transformation to build a skilled, diverse talent pool. All in tandem with redefining hybrid work experiences, developing more attractive packages aligned with generational shifts, and reforming career frameworks for greater internal mobility.
The common thread running through all of these changes is the employee experience.
The reinvention of employees’ experience of work is now critical to growth. And achieving this requires action focused around four buckets of value that together create an aggregate approach.
1. Customer value
Where organizations exhibit high levels of customer satisfaction and innovation to meet consumers’ needs, this rises from a working environment that motivates individuals, supports high-functioning teams and fosters a dynamic and diverse workforce.
Today, such an environment will focus strongly on diversity, equity and inclusiveness, and environmental, social and governance issues – with the traditional compliance lens on these areas ideally progressing to a more authentic rationale grounded in culture and values.
Authenticity is even more important when people are worrying about layoffs, given that happy, engaged, well-rounded, diverse and socially minded workforces are far more likely to provide a great customer experience.
2. People value
This bucket has two main aspects. One is performance, with the goal of unlocking ingenuity and cultivating a culture that encourages self-development and collaboration, to create high-functioning, high-performing teams.
Amid the current volatility, it can be hard to see how to cultivate an environment and culture to build an entrepreneurially minded workforce.
The way forward? Work to ensure your people’s mandates, objectives and goals – together with the whole employee experience – are absolutely tied to long-term business value and financial plans.
The other aspect is behavioral analytics. There are still workforces where employees can do their jobs well but feel disconnected from the organization's performance. To restore that linkage, organizations need to collect and apply targeted insights on team dynamics, sentiment and the impact of the physical work environment.
While workforce-wide employee surveys are still useful, there are now many more creative ways to understand how people are feeling, providing insights that support the right decisions and interventions at an individual or team level.
For example: take the current debate over how many days a week people should be in the office – and the need to monitor people’s wellbeing and levels of stress if layoffs are possible.
3. Societal value
Organizational resilience increases when work environments sustain positive outcomes for the workforce and connected communities are strengthened and stabilized. DEI and ESG are central to achieving both.
Whether these outcomes are viewed through a compliance or culture lens – either can work – what matters is having solid targets, measuring and tracking progress against them, and showing how DEI and ESG are becoming real.
For instance, take the tech industry’s still very low representation of women at senior levels. As the diversity spectrum evolves and generational shifts continue, organizations need to ensure their efforts to build societal value are sincere and not just hyperbole.
This can significantly influence their brand and reputation, in turn feeding back into employee experience.
4. Financial value.
EY research shows that the top 25% of organizations for employee experience achieve twice as much customer satisfaction and innovation. Which in turn boosts profitability and helps reduce operational and reputational risk.
As an organization wrestles with tough decisions over layoffs triggering negative brand sentiment, protecting its reputation requires a focus on employee experience. And keeping an eye on early warnings – like staying alert to any regulatory lapses or inequitable treatment across the workforce.
Here, employee relations groups can be a powerful asset. Also, any rumbling issues that could detract from the employee experience should be addressed early and proactively before they turn into bigger problems.
A time to be humble … and listen
We all know that having the right talent is mission-critical for any business. But in an industry that’s highly attractive to talent, such as tech, it’s easy to assume a flow of premium talent will always be readily available.
Well, times have changed. As has talent. And any past confidence around attracting, retaining and managing talent through all economic conditions is now a luxury that organizations can ill afford.
Leaders must adopt humility and vigilance, which means focusing explicitly on organizational resiliency; using digital platforms to listen to and understand their people; filling in the blank space outside talent processes to identify how experience gaps erode business value; and closing those experience gaps with effective interventions.
Those businesses will see higher workforce engagement, productivity and wellbeing, and faster adoption of new ways of working, all leading to a more resilient and profitable business.