As layoffs ease, tech CHROs want to focus on managing their workforces

Tech CHROs expect layoffs to ease up this year, according to a recent survey of approximately 100 HR executives by SoftBank Vision Fund, a venture capital firm. While 62% of CHROs said they reduced their headcount over the past 12 months, just 20% “expect to have layoffs in the remainder of 2023.”

The CHROs said their next challenge is figuring out how to effectively manage workers in an environment that looks very different than it did three years ago, with many companies still adjusting to hybrid arrangements, and tech firms pulling back on many of the perks they offered to workers during the early days of the pandemic.

“Manager effectiveness” was ranked as the “top area of focus” this year by the CHROs surveyed; 39% identified it as their main priority. Around one-quarter (24%) said “change management” is their top concern, while 18% said they’re most focused on “culture.”

CHROs face management challenges. The rapidly changing world of work poses a challenge for companies when it comes to managing their employees, Michelle Aylott, CHRO at SoftBank Investment Advisers, told HR Brew via email.

As a result, “companies are placing a premium on management expertise as they recognize that effectively managing the workforce is an increasingly difficult task,” she said.

Although most CHROs reported that their companies had adopted a hybrid arrangement, a majority of respondents (79%) admitted that hybrid work makes it harder to cultivate a cohesive company culture, up five percentage points from last year. More than half (53%) said it’s harder to manage their workforces now compared to a year ago.

In light of the shift to hybrid, “some CHROs will have to update processes that have worked for them in the past,” Aylott said. Research has found, for example, that managers are prone to proximity bias—treating workers who are physically closer to them more favorably—which may affect how employees find opportunities or get promoted.

Aylott suggested CHROs may need to review their performance management processes to ensure they reward the most productive employees, regardless of where they’re working from. They may also need to seek out new ways to engage and communicate with employees.

Easing up on perks. 60% of CHROs surveyed described their company culture as “functional,” while 30% said it was “thriving.”

But in a sign that worker leverage in the tech industry is easing, few CHROs (9%) said their companies plan to give workers raises in order to increase engagement and strengthen culture. Less than a quarter (23%) said they plan to increase flexibility with an eye toward these goals.

Instead, the majority of CHROs surveyed said their firms are “stressing company values,” “empowering employees to shape decisions,” and “offering more professional development” in the hopes of boosting engagement and culture.