Four Ways CEOs Can Guide Companies Through Inflation Spikes And Hiring Freezes

Declining profits and economic uncertainty sparked by soaring inflation rates are introducing a new set of leadership challenges. Many companies—including Twitter, Netflix, Meta Platforms and Uber—have cut staff or frozen recruitment efforts despite the recent ‘Great Resignation.’ This cautious approach to hiring and spending from tech industry giants has created vulnerabilities that may undermine company growth, productivity, and culture—as well as employee retention.

Now is a prime opportunity for leaders to show their teams that they are trustworthy by taking time to prioritize, provide information and alleviate additional stress. Leaders need to be doing more of what they should already be doing. What does that mean? Strong leaders who have already made a practice of intentional leadership won’t need to shift how they engage with and show up for their teams. But for those leaders who have not taken the time to practice good leadership traits and behaviors, this environment will have them feeling like they’re making a leap into uncharted territory—and that’s okay. Here are four key leadership behaviors that can make a meaningful impact on employees right now as corporate America struggles with widespread hiring freezes and a looming recession.

1. Prioritize with intention

In a time where employees may feel overwhelmed with both professional responsibilities and personal matters, it’s important for leaders to narrow the focus toward what is the most important. It becomes increasingly difficult to advance the most critical work when everything is a priority, and it is unclear how their work is contributing to the strategy. Tracing a clear line from work initiatives to the bigger picture can provide a sense of security in uncertain times if there’s a hiring freeze or looming fear of layoffs. It can also help shift your team’s mentality from “having” to do something to “getting” to do something, if they feel they understand the team’s strategic imperatives and how they fit into the bigger picture. Tactically, an immediate next step may be to review the recurring meeting invites you own and remove anything that conflicts or doesn’t advance the strategic priorities you’ve set for the team.  As people juggle different dynamics, having the gift of time can be just that – a welcome gift to help employees focus their efforts.

2. Communicate more, not less

As a leader, even when you don’t have all the answers, being transparent about what you do and don’t know builds trust within your team. Avoiding the opportunity to lean into a transparent dialogue for fear of putting the team in a threatened state only amplifies the anxiety they may be experiencing. Even amidst a challenging circumstance, make sure your teams are confident that, no matter what, they’ll be the first in line to receive accurate information. While it doesn’t eliminate discomfort and uncertainty, it provides a trusted resource employees can feel has their best interests in mind.

3. Provide clarity

Whatever your organization’s decision is around certain hiring practices and key initiatives, be sure to communicate it very clearly so expectations and circumstances are understood. Ambiguity is not your friend during a “war for talent” or when there are rumors about layoffs and a hiring freeze swirling. If employees aren’t confident in how their organization recognizes an issue, they may seek clarity elsewhere. Especially in the instance of a hiring freeze, the natural response is often, “there must be an issue at this company that I don’t know about.” This is a great opportunity for leaders to emphasize that the organization is making calculated, smart decisions on how to govern the business through a market of uncertainty. Whatever the longer-term business strategy is, the best decision may include not augmenting staff at this time, which doesn’t necessarily mean an organization is in trouble. Being clear about what is going on internally and communicating this effectively can alleviate challenges or areas of doubt among your team or department. It also prevents employees from jumping to conclusions and sliding into panic mode when they feel overwhelmed by uncertainty.

4. Lead with empathy

Regardless of how your company approaches a tenuous market, it’s important to meet your employees where they are. Don’t try to position something that you know doesn’t feel good as a positive thing. In addition to being perceived as tone deaf, you also risk severely damaging your credibility and eroding the trust you have. Even if the impending layoffs or restructuring create longer-term benefits for the organization, be aware that those announcements can spark feelings of uncertainty and likely inspire negative reactions. People respond favorably to leaders who acknowledge feelings, recognize the circumstances, and clearly communicate why their decisions are necessary. Being hyper-sensitive to natural human reactions and doubling down on communicating rationale and next steps as you’re able can go a long way to maintain trust and morale through tough transitions.

Transparent, direct communication and empathy go a long way during turbulent times— hiring freezes, layoffs and uncertainty. Saying “thank you” can also add more value than one might think. As more is being piled on everyone’s plates, thinking of new and creative ways to say thank you makes a big difference. While it may not be a cure-all for burnout, recognition makes the hard work easier because employees can be confident that it’s appreciated, and is contributing to the team’s top priorities. Being empathetic and focused on the facts—while getting ahead of any rumors to prevent people from filling in gaps of information with false assumptions—can position your team for greater productivity, focus, and morale. These leadership behaviors can afford Big Tech and other companies an opportunity to evolve during a more turbulent time.