Exceptional leaders possess a relentless determination to accomplish what needs to be done and to achieve the best long-term results, regardless of the challenges they face. While most companies aspire to have such leaders at the helm, the current economic climate has forced some organizations to undergo layoffs and cost-cutting measures. However, hiring exceptional leaders during an economic downturn can offer unique advantages over waiting for the economy to recover.
This shift affects almost all industries, but notably, the technology sector is garnering the loudest headlines this year, laying off masses of people.
According to the Crunchbase Tech Layoffs Tracker, in 2023, more than 168,800 workers in US-based tech companies (or tech companies with a large US workforce) have been laid off in mass job cuts. Layoffs.fyi reports that number significantly higher at 1,018 tech companies having laid off 236,465 employees through September this year. In 2022, more than 93,000 jobs were slashed from public and private tech companies in the US.
The numbers for some of the larger businesses are staggering: Microsoft 10,000; Meta 21,000; Amazon 19,000; Alphabet 12,000; IBM 3,900; Twitter 3,700; Dell 6,650; and Salesforce 8,000. The numbers for small-to-medium businesses are smaller yet may represent a higher percentage of their total workforce.
Exceptional leaders caught in the cut find themselves in an uncomfortable situation—either laid off or unable to make an impact because of those layoffs and cost-cutting measures. These leaders are busy during good economic times doing what they love. Although they may not be looking to change, challenging times bring on frustrations that could leave leaders open to hearing about opportunities they previously ignored. Exceptional leaders have an internal drive they need to fulfill. If you provide an opportunity to fill their passion, they might decide to make a change.
Advantages Great Leaders Bring
Hiring exceptional leaders during an economic downturn can be advantageous for the following reasons compared to waiting until the economy returns to a thriving state.
Strategic Planning and Turnaround Expertise
Exceptional leaders excel at navigating difficult situations and have a proven track record of successfully leading organizations through adversity. By bringing them on board during an economic downturn, companies can leverage their strategic planning skills and expertise in implementing effective turnaround strategies. These leaders analyze the current state of the business, identify areas for improvement, and develop strategies to drive recovery and long-term success.
Cost-Effective Talent Acquisition
During economic downturns, a larger pool of talented individuals is often available for hire due to layoffs in other organizations. This presents an opportunity to attract exceptional leaders who may not have been accessible in a thriving economy. Hiring these leaders during a downturn can be more cost-effective, as their salary expectations or compensation demands may be more reasonable, given the economic climate.
Opportunity for Transformation and Innovation
Economic downturns necessitate organizational transformation and innovation to adapt to changing market conditions. Exceptional leaders bring fresh perspectives and innovative ideas to the table, enabling companies to pivot, explore new opportunities, and implement necessary changes. By hiring them during a downturn, organizations can leverage their expertise to position themselves for growth and gain a competitive advantage when the economy rebounds.
Building a Strong Foundation
Bringing exceptional leaders on board during an economic downturn allows companies to build a solid foundation for future growth. These leaders can help streamline operations, optimize resources, and improve organizational efficiency. By focusing on building a strong foundation during the downturn, organizations will be better prepared to capitalize on opportunities and scale up when the economy improves.
Employee Engagement and Retention
Exceptional leaders have the ability to inspire and motivate employees, even in challenging times. By hiring them during an economic downturn, companies can create a positive work environment, instill confidence, and foster employee loyalty. This, in turn, can lead to increased employee engagement, productivity, and retention, setting the stage for a stronger and more cohesive organization when the economy bounces back.
Hiring exceptional leaders is advantageous regardless of the economic climate. During an economic downturn, however, the unique challenges and opportunities make it an ideal time to bring in experienced leaders who can navigate uncertainties and position the company for long-term success. There may be excuses for delaying such investments, but seizing the opportunity to hire exceptional leaders now can yield significant rewards in the future. That future success requires planning and investment. During an economic downturn, those who take action and assess what can be done to better prepare for recovery can position their companies for greater success and capitalize on the present opportunity.