Layoffs: The Blame Game
As markets continue to fluctuate amid economic woes—and as AI disrupts industry after industry—it’s not surprising that firms and analysts believe layoffs will continue into fall and winter. What is surprising is the factor leaders blame for this development: employee performance
One year after they cited overhiring as the primary cause of layoffs, some 30% of HR leaders, in a new report, blame underperformance for cutbacks—placing it in a tie with overhiring as the number-one factor. Restructuring and incompatible skill sets
“Historically, layoffs have been an event where the company wouldn’t blame the employee,” says HR expert Ron Porter, senior partner at Korn Ferry. Instead, he says, firms would cite causes like unanticipated business slowdowns or the need to cut costs.
So far, the tech industry alone has already laid off almost 125,000 workers this year, according to Layoffs.fyi. And surveys indicate that there’s more to come: Three-quarters of organizations are undertaking or considering 2024 layoffs. But firms rarely talk about the issue of performance as a motivating factor. “Out of respect, you don’t want people leaving with the messaging that they’re the worst performers,” says organizational strategist Maria Amato, senior client partner at Korn Ferry. In her view, under-performance may have less to do with employees themselves than with challenges in firms’ hiring, onboarding, and support practices.
Certainly, some corporate leaders continue to be skeptical of remote- or hybrid-work arrangements
DEI experts, meanwhile, say performance-related layoffs
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Performance-related cutbacks typically focus on annual reviews
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In today’s fluctuating market landscape, employee performance is being cited as a key factor in layoffs, alongside overhiring. This shift raises important questions about how companies assess talent, particularly when remote and hybrid work models are still evolving. While performance metrics are important, we must also recognize that onboarding, skill alignment, and workplace support play crucial roles. As we navigate these challenges, it's essential for leadership to foster an environment that promotes growth and equity, ensuring that performance evaluations are fair and reflective of the bigger picture. #Leadership #HR #FutureOfWork
Enthusiastic senior medical affairs veteran, executive leader, educator, and entrepreneur
6 个月When you cite "employee performance" as a factor, the following aspects come to mind: recruiting, onboarding & training, professional development, and leadership. All share the burden, but it begins with recruiting. In my opinion, one of the biggest liabilities creeping into recruiting practices today is the excessive reliance on AI to screen candidate applications. In fact, I had a colleague tell me that some applicants cleverly copy key words from the job description and paste them in the header and footer as white text to "trick" AI algorithms into prioritizing their application. ?? Importantly, candidates and hiring organizations need to be honest with themselves as to their motivations. Furthermore, organizations need to refine talent profiling processes and establish infrastructure to facilitate adequate onboarding & training, encourage professional development, and cultivate progressive leadership. Notwithstanding significant resource constraints or business environment fluctuations, all of the above help retain talent and convert low-performers into high-performers.
PEOPLE & CULTURE CHAMPION I create environments where individuals feel connected and valued. I strive to address issues of loneliness and promote genuine happiness, so every one feels understood and appreciated
6 个月Layoffs often feel sudden, but the underlying trends that lead to them typically unfold over years. Companies invest significant resources into forecasting market demands, yet one critical area is often overlooked: forecasting skill shortages within their own workforce. Imagine if, instead of being blindsided by a layoff, you were given a 12-month lead time—an opportunity to retrain for roles that would drive the company’s future success. Offering employees targeted training aligned with future growth areas, such as AI or data science, would not only empower individuals to secure their place in the company but also strengthen the organisation by closing the skills gap proactively. If companies communicated their strategic focus earlier, employees could make informed decisions about their development, aligning their personal growth with the company’s needs. In an ideal world, everyone would pursue their passions freely, but as the workforce continues to shift, aligning those passions with future-proof skills is essential. By forecasting not just market trends, but talent needs, companies could cultivate a workforce that’s ready to thrive in the roles of tomorrow, ensuring that layoffs become the exception—not the rule.
Digital Strategy, Connectivity and Digital Product Management, Telematics Strategy
6 个月My thoughts are that the company shares the blame. Employees are doing the jobs and roles they have been given within the hierarchy and structure provided. The hiring occurs over years and without full knowledge of the long term prospects. Sometimes there is blame there… sometimes not. But, still the employees are quite often in a spot that is not going to produce the best results. The company has limited means to reassign and so performance suffers. Many times the only way to make a shift is to remove those roles that are ‘hanger oners’ and don’t have a good spot in leaderships new direction. The employees loosing a job are collateral damage… nothing wrong with them or their performance but rather no spot that matters. Speaking from personal experience, you can be a passionate performer but not have a spot that is supported in the company and those two paths no longer have value together… and you’re out. Better for both parties really. Cool if it could happen without the tumult but…
HCM\HRO expert. Business Leader experienced in Operations, Customer Success, Strategy and Continuous Improvement.
6 个月It's an interesting perspective that likely has some truth to it. When doing a layoff, most companies consider who gets cut and underperformers are an obvious target. However this ignores two major factors. First - many layoffs cut new hires first (lowest tenure). I've seen time and time again where company overhires and then a layoff focuses on newest employees, often including those who are in their first few months with the company (and sometimes laying off people on their first day of work). So clearly in these cases performance is not a factor. And second - this approach shifts the focus away from bad management. When a company lays off 10%, 15%, 30% of their staff - clearly the people in charge miscalculated financial projections and market direction. And if they claim that such significant % of employee base are underperformers - well that just reflect badly on hiring and employee development at the company. Some of the recent layoffs I've observed, included companies cutting 75% of their workforce - yeah... the only underperformers there were at the top. For companies who are growing - layoffs among their competitors represent a great opportunity to hire knowledgeable people, who can hit the ground running.