Since the 90’s dot-com bust and the latest tech boom, Silicon Valley and its avid spectators have been holding their collective breath for the next tech bubble to burst. But is there really a bubble?
A sense of anxiety has set upon the tech industry maintained by the occasional warning from vocal personalities like Mark Cuban claiming the bubble is real and its implosion will be worse than the one in 2000. Just this week, with the news of Dropbox’s stalled IPO, the WSJ claimed that the tech bubble is already bursting:
“…the second tech bubble, one which has seen nearly 200 tech “unicorns” rising out of the ZIRP ashes in the past few years and promptly attaining valuations of over $1 billion, is bursting.”
Whether the bubble pop is a blip or a bomb, one truth remains: Tech companies of all sizes and ages are starting to have layoffs.
Just this past week several tech firms have cut back on personnel: Flipagram, Zomato, Snapchat, Qualcomm, and Twitter. However, those reading the tea leaves are split on whether these tech layoffs are a sign of a healthy tech market–where firms wisely refrain from overstretching resources–or one that is starting to show signs of collapse.
Bubble or No Bubble, Tech Leaders Must Prep for Change
The reason behind each layoff, and what these reductions in force portend, is anyone’s guess. However, what is certain is what’s at stake–your bottom line and employer brand, arguably the two most crucial resources for any tech company.
Why? Tech is a small town: Everyone knows everyone, and everyone talks. Not only is tech a more intimate talent group compared to other markets, but it is where the war for talent is perhaps the fiercest. This year the tech industry tied with healthcare for most in demand jobs, with Software Developers topping the list.
So how do tech companies successfully transition talent in this competitive labor climate, while minimizing the blows to employer brand?
Here are 3 tips for tech leaders who are considering a Reduction-In-Force (RIF):
Offer an outplacement solution that matches the needs, lifestyle, and flexibility tech talent demands.
Outplacement is a career transition service employers provide their exiting employees in the event of a layoff to help them get a leg up on their job search. However the traditional outplacement method–brick-and-mortar approach wherein employees must drive across town to attend in-person resume workshops–is not a fit for today’s tech talent that is so accustomed to a more mobile, on-demand, flexible service delivery. Solutions like Intoo’s outplacement solution, leverage technology and offer a more flexible approach that fits the independent, tech employee.
Outplacement is not only proven to protect brand–by reducing negative employee feedback, mitigating legal risks, and increasing the likelihood of boomerang employees–but like most SaaS solutions, a tech-based outplacement delivery is more cost-effective than the traditional model. Learn more about outplacement.
Review and refine your off-boarding process; ensure it follows the correct guidelines but also reflects your values as a great employer.
In-demand technical talent can choose where to work, and since tech companies experience the highest turnover, the choice to quit is made most frequently in this industry. During a layoff, your off-boarding process is made public; in the audience are the employees who remain with your company, competitors looking to attract your transitioning workforce, and even members of the press.
The way you treat your employees at a difficult time will determine the character of your brand more than any employee benefit or perk you offer. Download our RIF checklist so you don’t miss any steps in the off-boarding process.
Communicate with clarity and compassion. The way employees learn of their layoff is crucial to the success of a separation event.
Communicating a layoff is one of the most difficult elements to manage and usually fails because of poor planning, mixed messaging, and simple oversight that often gets misconstrued as insensitivity. Speaking with PR and legal professionals who have experience in managing RIFs is advisable to solidify messaging and lessen liability. However, what you say is as important as how the news is delivered. Informing the affected employees first is always a good rule to follow.
Access our library of outplacement resources.
Contact us to learn more about our outplacement solution.