Protocol - Who ‘LIFO’ leaves behind

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Protocol | Workplace

By Amber Burton and Lizzy Lawrence
June 23, 2022


Welcome back to our Workplace newsletter. Today: Who ‘last in, first out’ leaves behind, Slack is messing with the simplicity of huddles and new research shows that workers expect raises that they probably won’t get.

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'LIFO' won’t save your bottom line

 

The tech industry continues to suffer a steep downturn and more HR leaders are facing the hard questions of who to let go and why.

Perhaps one of the most storied practices for deploying layoffs is the concept of “last in, first out,” but experts now say following this path could come with the risk of losing some of your most diverse hires and top performers. In fact, it could be downright discriminatory.

I spoke with several HR and industry leaders to learn more about the often unseen risks associated with the practice and some of the best alternatives and solutions in times of making cuts.

Why you might want to avoid jumping into a ‘LIFO’ mentality:

  • Leaders lean on the practice because it appears to be a cut-and-dry (and perhaps even equitable) way to evaluate layoffs based on tenure and seniority, but it frequently discounts the performance and contributions of employees.
  • Layoffs can disproportionately affect women and people of color when companies don’t have diversity spread throughout the organization, shared Star Carter, co-founder and chief operating officer at DEI tech company Kanarys. More inclusive representation can be concentrated in the entry level and in what are considered to be “nonessential” roles.
  • “Companies also tend to recruit more aggressively and expand their talent pools when the labor market is particularly hot,” said Julia Pollak, chief economist at ZipRecruiter. “So company diversity often increases towards the end of an economic expansion. Those more diverse last-in hires are often the first out under a seniority-based system or even a performance-based system, because it can take time for new hires to learn the business and become fully productive.”

Are there any other risks associated with the practice of LIFO?

  • “When looking specifically at a ‘last one hired, first one fired’ approach, remember this can haunt companies when they return to hiring. This creates skepticism with prospective employees — often for years afterward. That is a huge risk,” said Colleen McCreary, chief people, places & publicity officer at Credit Karma.
  • Not to mention the financial loss and potential legal actions. “You risk keeping managers, supervisors and administrators, but losing the ‘worker bees’ who actually do the work and make money for the company. You risk disparate impact for a protected class — individuals who are members of a certain race, ethnicity, religion, gender, sexual orientation, gender identity or those with a disability — and a slew of wrongful termination lawsuits,” said Pollak.

Here’s what the experts say to consider instead:

  • Redeploy your talent: Lars Schmidt, founder of HR executive search company Amplify, suggests mimicking what some of the most talked-about companies did at the start of the pandemic when layoffs first hit. He points to Airbnb’s decision to deploy its recruiters as an outplacement team to help laid-off workers find new jobs.
  • Face the hard truths: “In theory, layoffs are about cutting roles, not people. However, from my experience, tenure is a popular criteria when considering who stays and who goes. That is because you often need a defensible set of criteria to help you narrow down who will be asked to leave the company, especially if you have many people in the same role,” said McCreary. “My recommendation is, when possible, instead of going person-by-person, which can damage morale even more, identify entire groups or teams that can be let go all at once. It is easier to completely shut down a location, for example.”
  • Consider whether you need to make layoffs at all: “I would caution people leaders from having a knee-jerk reaction to a downturn in the business. Layoffs may be the quickest way to cut costs but they should be a last resort. Instead, identify alternative cost-cutting measures,” McCreary said.

— Amber Burton, reporter (email | twitter)

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The Zoomification of Slack huddles

 

The beauty of Slack huddles at work is their simplicity. Huddles, an audio-only chat space Slack launched about a year ago, became the fastest-adopted feature in Slack’s history. So why is Slack messing with them by adding video, screensharing and threaded chat?

Katie Steigman, a director of Product Management at Slack, said the new huddle features are meant to make impromptu meetings more powerful for those who want them to be. They will still be audio-only by default. “This will build on what people already use huddles for: impromptu co-working sessions,” Steigman said. “You’ll just be able to use video when you want to.”

Read the full story.


— Lizzy Lawrence, reporter (email | twitter)

SPONSORED CONTENT FROM VERSAPAY

 

Executives that don't align CX ambitions with accounts receivable leave money on the table

Fewer than half of executives (44%) see better communication with customers as a benefit of digitizing AR. Meanwhile, 72% state that their AR department isn't customer-oriented enough, implying that executives understand the need for customer-oriented AR departments, but aren't aware that they can close that gap as part of their AR digitization project.

Click here to read more from Versapay

Workers’ expectations of pay raises don’t live up to reality

 

How often are you reviewing comp? Most workers aren’t satisfied with just one annual raise, according to a new survey of more than 3,000 U.S. and U.K. workers from the HR software-maker Lattice. Almost 60% of respondents said they expect a raise more often than that.

  • In the U.S., more than 30% of workers said that if they’re meeting or exceeding expectations, they expect a raise every three to six months. (Almost 40% of workers between the ages of 25 and 34 shared this expectation.)
  • Employees may have outsized expectations here. Even before the downturn, the average salary increase budget was less than 4% — but almost 1 in 3 workers told Lattice they were hoping for an increase of 4% to 5%.
  • How much do your employees know about how these decisions are made? Lattice found that more than 30% of employees didn’t understand how company leaders made decisions around raises and promotions.

— Allison Levitsky, reporter (email | twitter)

More stories from us

 

AI was meant to increase fairness in hiring. It might be doing the opposite.

DocuSign’s CEO has resigned after slow growth and a miss on earnings.

GitHub Copilot is now available to everyone for $10/month. It will be free for students and organizers of popular open-source projects. Most programmers agree that it helps them do their jobs, but some aren’t happy about the change.

SPONSORED CONTENT FROM VERSAPAY

 

Executives that don't align CX ambitions with accounts receivable leave money on the table

A resounding 96% of respondents claimed that there is work to do in digitizing their AR departments, yet 60% agreed that their AR departments haven’t been prioritized as much as other departments for digitization. At a time when the importance of securing cash flow is higher than ever, many businesses are not putting enough focus on it.

Click here to read more from Versapay

Around the internet

 

A roundup of workplace news from the farthest corners of the internet.

Two senior Black executives are leaving Amazon. This tracks with the data we compiled about tenures in the C-suite.

And speaking of the exec exodus, the SVP and VP of Sales are leaving Better.com.

Listen: Beyonce’s new battle hymn for The Great Resignation.

Amazon is running out of workers.

Whatever you do, don’t retire right now.

Is your kid in day care while you work? Read this before you check on them with an app.

 

Thoughts, questions, tips? Send them to workplace@protocol.com.

 

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