This past year finance leaders faced strong macroeconomic headwinds with increasing cost pressures as well as labor challenges – such as the rise of remote work and “quiet quitting.”
Whether or not these labor challenges will continue to be a concern for CFOs into 2023, would be a sort of “pendulum swing,” according to Greg Selker, managing director and regional practice leader, technology of North America at Stanton Chase – a New York-based executive search firm.
“We are now returning to some level of in person work, and it’s a lot harder to be a quiet quitter when you are around people,” he said in an interview with CFO Dive.
Quietly quitting – the idea of not outright quitting your job but quitting the idea of going above and beyond at it – gave rise during the pandemic as remote work was the standard, and it is costing companies millions.
The solution, according to Selker, is to “rightsize “ your business – that is being deliberate about layoffs. In order to do this effectively, however, CFOs need to create an infrastructure within their business that is able to weed out the low performers, or quiet quitters, he said.
`Rightsizing vs. downsizing’
“Downsizing is when you ask people to do more with less. Rightsizing is when you are looking at the low performers and the quiet quitters, people that aren’t pulling their weight, and you remove impediments in the way of progress,” said Selker.
Those “impediments,” or employees, may be collecting paychecks without performing in accordance with their job descriptions, he said.
With firings happening across the tech industry specifically – Amazon CEO Andy Jassy confirmed plans to cut 18,000 workers Thursday and Salesforce said on Wednesday it has plans to cut 10% of its workforce as part of a restructuring – there is still a labor shortage at play in the market.
“Just because Amazon has laid off 1000s of people, and Salesforce too, that doesn't mean that all of those people are star performers who should be gobbled up,” said Selker.
A lot of “low performers,” were hired on to tech companies in particular during the pandemic. And now, in a post pandemic era, their weaknesses are becoming evident.
“The companies that were growing, ramped up hiring incredibly, and were hiring people on a 100% remote basis. Most companies didn’t have the structures in place to effectively manage the performance of those people. So it was kind of like a perfect storm of events,” said Selker.
In order to “rightsize” effectively, or lay off the employees impeding progress and not the ones that benefit your organization, finance leaders need to make sure that they do have structures in place to effectively manage, and assess, their workforce, he said.
A performance management culture
With a looming recession still among the top concerns for finance executives, companies need to protect themselves against the uncertainties, said Selker, “financial leaders need to really lead the charge of proactively analyzing and assessing existing performance and getting rid of low performers,” he said.
What this entails, according to Selker is really taking stock of the overall employee base, which starts with clearly defining the responsibilities of a specific position and then making sure the behavioral characteristics of whoever is in that position are behaviors that will deliver results and align with the goals of the business. “There are not too many companies who do this well and CFOs can play a critical role in making this happen,” he said.
