The End of Hiring for Growth

So if recruiting is not the answer, how do we grow?

I made the mistake as an entrepreneur thinking that hiring is the one key thing to get right for growth. My company expanded the team 3x in 2021 to pursue new opportunities. And of course we were not the only ones as tech hiring was in a boom throughout 2020 and 2021. But now it’s time to consider if this is an end to hiring for growth. 

Headlines tend to focus on the growing queue of cautious tech giants who are easing the brakes on hiring due to economic uncertainties, like Elon Musk sharing his plans to cut 10% of salaried staff at Tesla, Meta reducing its engineer targets by 30%, and Twitter letting go of 30% of its talent acquisition team. 

To put things into context, according to Layoffs.fyi, a website tracking job cuts at startups and recently public companies, more than 37,000 positions were eliminated at 467 firms globally in the second quarter. That compares with fewer than 3,000 during the same time last year. As of mid-August 2022, a total of 522 startups have laid off 70,698 employees reported publicly. 

The on-the-ground reality is that work is still being done. So if recruiting is not the answer, how do we grow?

I recently discovered Josh Bersin’s research on “HR Capabilities Correlated with Growth” where  7,300 HR professionals were assessed across 80 different functional areas in HR. Their level of capability was then correlated with the growth rate of the company, and it was found that HR teams that belonged to large high-growth companies outperformed in skill areas that are directly related to organization growth. Surprisingly, recruiting skills did not make it in the top 15, which means HR teams at large high-growth companies may have already figured out that growth cannot happen through recruiting alone. In Josh Bersin’s words: they grow through development, mobility, retention, and strategic job design.

Source: Bersin Research 

This research also matches the lived experience of a friend who works at a public-listed Canadian tech company’s HR team. She recently shared with me that her new mandate is talent mobility within the company so it’s not about acquiring talent externally but creating talent from within through career pathways like moving marketing into sales, finance into IT, etc. 

Linkedin’s Workplace Learning Report seems to support the business case that companies that excel at internal mobility are able to retain employees for an average of 5.4 years, whereas the average retention span is 2.9 years for other companies that struggle with this.

This also matches my startup’s experience designing internal upskilling programs that have turned back-office roles into data analysts servicing food delivery and ride-sharing market leaders. One barrier that’s difficult for senior leaders to overcome is the question of reliability. They struggle to believe that online education could deliver:

We know what we will get when we hire, but is there a reliable way to tech skills within?

Luckily, there is an inflection in learning systems for adults. After the explosion of online courses but disappointing course completion rates averaging 3 to 6 percent, companies are unsure if even those that make it through all the lecture videos have learned a skill well enough to do it as their job. The gap in expectation and results of what online education can deliver can be met by cohort-based courses (CBCs).

In “Content is no longer king, Cohorts are”, Wes Kao, co-founder at Maven describes cohorts as interactive online courses where a group of students advances through the material [together] with hands-on, feedback-based learning at the core. Wes differentiates the key difference between this phase of online ed and the past as [being] more engaging and real-time, not just self-paced, and involves community-driven, active learning, as opposed to solo, passive content consumption.

In a return to how we used to learn as kids in grade school, pulling our tables closer to each other to work in small groups, the insight that people are social animals and need more than just information to learn is simple but a game-changer in how teams grow. 

And cohorts can deliver. There’s evidence that cohorts have worked for companies like PwC, AT&T, Accenture, and other Fortune 500's. And from our own cohorts completed with partners, we see near 100% completion rates, and manager-reported gains on productivity and time saved from skills learned and internal roles filled. Most of these opportunities are with making existing staff more “full-stack”, like operations learning how to use data analytics, sales team learning how to build a dashboard. Overall, a build talent over buy talent strategy has helped companies save money on recruiting, improves employee retention through career development, and ensures roles get filled so the company can keep building. 

So amidst the current cycle of a tech winter, the end of hiring for growth might spell the new beginning for investing in teams - with cohorts.