People Impacts of a Market Downturn

With all of the market turmoil in 2022, many private company CHROs have to revisit their hiring, retention, and employee communication strategies. Faced with potentially smaller recruiting budgets, reorganizations, or a dreaded reduction in force, people leaders are carefully watching the current market conditions and planning for the people-related impacts.

CHROs in The Circle recently convened to share their on-the-ground insights and strategies for navigating recruitment and retention in the current market. Here are the key takeaways:

Reducing and Re-Prioritizing Headcount

Several CHROs noted that they are currently reducing their headcount targets for the year based on current market volatility and potential fundraising challenges down the road. The adjustments apply not only to new hires but also to backfilling recently vacated roles.

Rather than coming down by a certain percentage across the board, most CHROs are focusing headcount numbers around “near-term profitability.” That requires looking across various organizations and individual roles and prioritizing headcount against crucial business needs and strategic deliverables.

A unique challenge some CHROs face is how to refocus their internal recruiting teams now that hiring budgets have been reduced. Companies that significantly built up their recruiting function to keep pace with the white-hot talent market need to figure out ways to maximize that investment and retain strong recruiters. One solution is to refocus recruiting team members on “backburner” projects that are important but haven’t gotten the attention they deserve – such as revamping recruiting and onboarding processes or putting focused time into DEI pipeline efforts. Another option is to explore whether some recruiting team members are interested in more generalist roles that would be more helpful overall for the business. 

Partnering with Finance Leadership

CHROs find themselves in much closer contact and partnership with the finance leaders of their organization these days. That’s a trend we’ve seen a lot of lately in The Circle, as CHROs and CFOs have gotten together to discuss things like employee bonus programs and global workforce expansion.

Building a strong strategic partnership with the CFO or VP of Finance (not just during annual financial planning) has been tremendously helpful for CHROs both from a planning perspective and for creating a unified front when addressing employees’ concerns over the financial health of the business. If this relationship is distant, strained, or nonexistent, it’s definitely time for both leaders to give it some attention. 

Communicating with Employees During Uncertainty

Naturally, CHROs are spending a lot of time thinking about communicating transparently with their employees and maintaining morale amidst financial uncertainty. There’s the challenge of deciding how transparent you want to be with your employees and ensuring that message is conveyed and received appropriately.

The bottom line is that during turbulent times, maximizing face time with employees really matters at every level of leadership in the organization. Some specific employee communication and engagement tactics being used by CHROs in The Circle include: 

• More frequent All Hands meetings 
• Town Hall style Q&A sessions with the executive leadership team
• Fireside Chat conversations between the CEO and functional leaders 
• Small group virtual coffee conversations with executives (limited to 10 spots with a waitlist) 
• FAQs and other resources for people managers 
• Employee pulse surveys 
• Tools for gathering and up-voting common questions / concerns (such as Slido)
• Office hours with the CHRO
• Sharing highlights from recent employee sabbaticals
   

The Takeaway

As the current market turmoil continues to unfold, CHROs and other people leaders are finding creative ways to adjust their budgets, reprioritize roles, and keep employees engaged and invested in the company. The success of those efforts will hinge on a continued partnership with Finance as well as a pulse on employees’ needs and concerns.

If you’re a CHRO looking to connect with other peers on current challenges and long-term strategies, we encourage you to apply to join The Circle.