Holiday Human-Capital Culling Could Cost

by | Dec 5, 2023 | Career Development, I-O Psychology, Workplace | 0 comments

Delaying hiring decisions and conducting layoffs could hamper New Year success.

Everywhere you look online during the 2023 holiday season, you’ll see three things:

  1. A ridiculous amount of ads for products you don’t need or want… but might buy anyway.
  2. Compilation videos of holiday decorating fails.
  3. News of layoffs or companies reporting the deferment of hiring decisions until mid-January.

Indeed reports that hiring has cooled significantly. In-person, low-paying positions in retail, hospitality, restaurants, and healthcare remain in strong demand, though they may not attract highly skilled talent with college degrees or advanced credentials. Historically stable jobs such as those in software development, information management, and mathematics have seen some of the most dramatic drops in the workforce, with reductions in hiring of as much as 50% in some sectors and layoffs reported by watchlists on TechCrunch and other sites. USA Today offers advice on preparing for winter layoffs.

When one speaks with business owners, executives, or recruiters, about and during the hiring process, the message has become more pointed post-Thanksgiving from “We’re not sure when we will make our decision” to “We’ll make a decision after the holidays.” Job seekers report on peer-support calls and during networking meetings that they have had their interviews postponed or canceled. Candidates who may have undergone two, three, or even six rounds of interviews may find that they must now wait to see if organizations actually fill the positions, much less whether they will have a job. Unemployed people, underemployed workers, or those seeking to make career changes for their own reasons will, subsequently, languish in uncertainty, low self-esteem, and imposter syndrome. At the same time, they continue to seek employment wherever they can.

Organizations not only impose hardships on people without adequate employment when they act indecisively or with a scarcity mindset. They may also add weaknesses and threats to their SWOT analysis, which could impose heavy costs.

The Cost of Holiday Talent Reductions

Delaying hiring decisions until after the holidays can serve as a detriment to organizations for several reasons:

  1. Missed Opportunities for Top Talent: Companies risk losing highly skilled and in-demand candidates because they have waited too long. By delaying hiring until after the holidays, savvy competing employers can snatch high performers away from the timid or currently unprepared.
  2. Burnout of Existing Staff: During the holiday season, workloads can often increase due to year-end tasks and holiday-related activities, resulting in a season filled with stress. Delaying hiring or RIFs (reduction in force) means existing staff may be overburdened, which can lead to burnout, decreased productivity, and attrition in the new year.
  3. Slow Start to the New Year: By waiting until mid-January to start the hiring process, organizations delay the time for new-hire onboarding. What better time could employers have than to onboard new talent during a season of joy? The positive affect felt among workers now can carry over to 2024.
  4. Impact on Morale: Current employees likely view the delay in hiring or RIFs as signs of organizational uncertainty or financial instability, which can negatively impact morale.
  5. Market Perceptions: Today, consumers, potential candidates, competitors, and other stakeholders can play into an organization’s brand perception. The delay in hiring may provide the perception of a lack of decisive leadership or a sign that the organization does not innovate with forward-thinking, which can affect your brand as an employer, steward to the community, and provider of goods or services.

If these reasons don’t provide some reasons for reflection on employment decisions, perhaps we can look at this from a positive standpoint.

Benefits of Hiring During December

Innovative thinkers may view this time as an excellent opportunity to find and retain talent at a great price. With the Great Resignation slowing to a trickle, workers in all sectors value their incomes and want to continue to work, provided they can work in places where they can contribute and feel valued. Capitalize on this sentiment to have a highly motivated and collaborative workplace to make some holiday magic.

  1. Stable Workers = Able Workers: Job insecurity begets performance issues and a loss of psychological contracts among workers (Sverke, 2019). When employees feel safe and stable in their roles, they can concentrate on their work. They have the confidence to know they play a part in the success of the organization. Employers will find fewer people job hunting and more people focused on their work when they have a purpose and a stable position.
  2. Strategic Planning: Hiring before the end of the year can contribute to strategic planning, allowing for a more effective allocation of budget and resources for the coming year. Moreover, organizations can have a more accurate count of the knowledge, skills, abilities, and other characteristics (KSAOs) of their workforce to know what they can leverage now and what they need to recruit for the future.
  3. Efficiency in Recruitment Processes: During the holiday season, if the competition follows the pack and pulls back its efforts to recruit or move full-steam ahead on layoffs, your job postings could stand out more and attract a higher quantity of high-quality applicants.
  4. Candidate Availability: Some candidates may have more availability during the holiday season to attend interviews and engage with hiring processes, as opposed to busier times of the year.
  5. Employee Engagement: With all of the festivities of the holidays, new hires can actively engage with incumbent workers socially and in work groups with a high level of merriment and camaraderie. Tis the season for people helping their fellows, so new hires may benefit from the goodwill of a strongly engaged workforce.
  6. Preserve and Build Organizational Knowledge. Human capital theory states that organizations derive their value through the KSAOs on loan to them from the people who work there. The loss of people via RIFs or other terminations can devalue a company by removing the unique knowledge and other characteristics brought to work by employees. Furthermore, bringing new talent at any time of the year can richly reward organizations with new assets to enable them to deliver more value.

Struggling to strategize this? Perhaps a consultant can help.

Get Your Consultant Before Winter

If these arguments against layoffs and for hiring during the holidays still confound you, don’t feel alone. Business owners and executives may need a hand from time to time to make well-informed and wise decisions. Enter the role of the ethical certified management consultant. December could present among the best times of the year to onboard a qualified and experienced consultant to help strategize, plan and execute initiatives for the New Year.

Engaging a consultant or fractional chief officer can provide fresh perspectives and expert insights to help set the direction for the upcoming year. These professionals can assist in conducting a thorough year-end review to identify successes, highlight challenges, and pinpoint areas for improvement. This enables leaders to make informed decisions and develop plans to go from here and now to excellence. Moreover, if accounting finds unspent budget allocations at the end of the year, hiring a consultant or fractional officer can utilize these resources effectively in an intelligent way, rather than losing them in a “use it or lose it” budget scenario.

Hiring these professionals during a time when others might not be actively seeking such services can give your organization a competitive edge. You’ll be preparing and strategizing while others are in a state of pause. Moreover, suppose your organization plans to make changes in the new year, such as a new CRM or ERP system, a new set of operational processes, or a merger. In that case, these professionals can help manage the transition smoothly, ensuring minimal disruption to operations. They can also help to develop robust crisis management strategies and contingency plans, ensuring the organization has preparations for any unforeseen challenges in the foreseeable future.

References

Indeed & Glassdoor. (2023). Indeed & Glassdoor’s Hiring and Workplace Trends Report 2023https://research.glassdoor.com/site-us/wp-content/uploads/sites/2/2022/11/Indeed-Glassdoors-2023-Hiring-Workplace-Trends-Report-Glassdoor-Blog.pdf

Jiang, K., & Messersmith, J. (2018). On the shoulders of giants: A meta-review of strategic human resource management. International Journal of Human Resource Management, 29(1), 6–33. https://doi-org.libauth.purdueglobal.edu/10.1080/09585192.2017.1384930

Sverke, M., Låstad, L., Hellgren, J., Richter, A., & Näswall, K. (2019). A Meta-Analysis of Job Insecurity and Employee Performance: Testing Temporal Aspects, Rating Source, Welfare Regime, and Union Density as Moderators. International Journal of Environmental Research and Public Health, 16https://doi.org/10.3390/ijerph16142536.

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