DEI is Here to Stay: How to Minimise Risks in the Pursuit of a DEI Workforce

One of the strongest indicators of the strength of any company is the ability to win over new customers from a competitor.

It has always been thus. When you offer a better product or service, and you’re able to prove that to a competitor’s client, they tend to make the switch. If enough organisations start ditching one provider of goods or services to move to another, then you have a bona fide market trend.

Consider this: last year LHH was able to convert 2,600 new Career Transition customers – more than 1,000 in North America alone. In particular, these organisations began to see something that LHH had identified back in our 2022 market intelligence report: some of the biggest players in Career Transition were getting out of the business, but just not telling anyone.

Let’s be clear: a shift in market share like that, even when it’s moving towards a market leader, is a fairly unique situation. And significant shifts in market share are not organic; there is always a pretty concrete reason why customers leave one brand and flee to another.

So, why did so many companies call LHH?

Some Career Transition firms started wagering that career transition was never going to be the business it once was. In 2022, the world’s employers were still in the midst of a hiring frenzy, driven or sparked by the Great Resignation. Headcounts grew substantially as employers scooped up as much skilled talent as they could find.

The impact of these trends was pretty seismic: some of the market-leading firms decided to pare back their Career Transition operations, closing offices, reducing the number of solutions they offered. High-contact, in-person Career Transition was abandoned.

Hardly any of these firms seemed to be able to anticipate that there was a sea change coming in the global labour market, one that would make mass layoffs a top-of-mind concern for employers once again.

2024 is the year of the three Rs: restructuring, reallocating, right-sizing.

In 2022, the first nearly normal year after COVID-19 changed things forever, our market intelligence forecast that there would be a correction in the global talent market. A hiring frenzy triggered by the Great Resignatio was going to come to an end. And with that, a correction.

The layoffs started in earnest in the second half of 2022 and by 2023, employers were downsizing with the same urgency they had hired during the Great Resignation. In 2023, most developed countries saw the most total layoffs in all sectors since the Great Recession of 2009.

The list of companies involved in mass layoffs reads like a who’s-who of the most iconic and profitable companies in the business world: Nike, Intel, Alphabet, Amazon, Intel, Hasbro, GM, Spotify, Pfizer, Charles Schwab, Condé Nast, Liberty Mutual, Ford, Stellantis, Nokia, LinkedIn, Wells Fargo, Snap, Cisco, Google, T-Mobile. The list, quite literally, goes on and on and on.

What was driving all this downsizing? A dampening of consumer spending and advertising in the years immediately after the worst years of the pandemic, crippling inflation, higher interest rates and a constant threat of recession all took their toll on well-established business plans. Add in the lusty hiring of the previous two years, and you had a perfect storm for mass layoffs.

CEOs made no secret of the fact that given current economic conditions, they needed to make hard decisions. Gone were speculative business units that had yet to pay a dividend. Gone as well were luxury hires made to corner the market on skilled labour. Words like “restructuring,” “reallocation of resources” and “right-sizing” had become ubiquitous in CEO keynotes and company news releases.

Many of the world’s biggest Career Transition providers thought that the demand for their products and services would never rebound. Suddenly, the demand for evolved, high-touch career transition skyrocketed along with the layoffs.

But when employers turned to their former Career Transition partners, they found that something odd had happened.

“We’re calling but nobody seems to be home.”

The changes were subtle at first. The closure of a regional office here. The downsizing of a Career Transition firm’s total staff there. But there was no avoiding the reality of what was happening: some of the biggest Career Transition firms with the largest clients had downsized themselves, closing offices and laying off staff that were essential to supporting their clients.

What started in 2022 as a strategic response to shifts in the global economy and labour market has turned into what can only be described as a permanent feature of the Career Transition marketplace.

Many of the new client organisations turning to LHH for Career Transition support were telling the same story: when they contacted their long-standing Career Transition partners, the response they were getting was underwhelming, to say the least. “We kept calling our firm but nobody got back to us. It was like they didn’t even exist anymore,” said one new LHH client.

Why wouldn’t these firms pivot once again and get back in the Career Transition game? In the past, it was not unusual for human capital companies to shift focus to ride the wave of change in talent trends. When hiring is robust, firms put more of a focus on recruitment and talent management. When layoffs soar, more resources are put into career transition.

But that traditional ability of human capital firms to be agile and pivot to meet market trends seems to be waning. Of greater concern is that the firms that are abandoning career transition seem unaware that Career Transition is not separate from other elements of talent management. It’s an important component that must be connected to all other talent management solutions.

Should you switch Career Transition providers? Focus on the gap between value and cost.

Everyone knows someone in this situation.

You’re married or in a committed relationship, but you’re not happy. You spend countless hours talking to friends and family about one overarching concern: what is the cost to me of staying in a bad relationship?

It’s a key question, and one that almost any organisation could ask to help them decide whether they’re using the right Career Transition firm. What is the cost, at this time, of not switching from a firm that abandoned Career Transition as a major solution during the hiring frenzy?

There’s no getting around the fact that industry shifts over the past two years have made some human capital firms less financially stable on the outplacement side of their businesses. How can you tell if your long-time Career Transition partner is struggling?

Look for the tell-tale signs of a firm that has lost interest in Career Transition:

• No news releases or product innovations in the last 12 months;
• No thought leadership or market intelligence on the art and science of career transition;
• Difficulty reaching firm representatives;
• An erosion of the firm’s account management structure and its ability to manage large-scale downsizing, both domestically and internationally;
• No modernisation of delivery models to reflect the fact that outplacement is now more about pivoting to a new career and not just finding another job;
• No differentiated programme to support senior and executive leaders in transition, the people who have been leaders in your organisation and in your industry;
• The awful realisation that the office in your jurisdiction has been closed and you’re now being served by someone two states over.
  
  

That is the raw information you can use to assess the viability of your Career Transition partner. And in doing that, you’ll also be able to identify the risks of not switching.

Employer brand is such an important, yet delicate, commodity. Why would you put that at risk with a sub-optimal Career Transition solution?

The point is, you wouldn’t do that. And so, you’re one step closer to switching.

Learn more about Career Transition at LHH.

Greg Simpson is the Global Vice President of the Career Transition Practice at LHH. He is a trusted advisor with deep expertise in the market, client ecosystems, and client customers. A member of the senior management team at LHH, Greg drives the development of delivery methodologies, productivity models and communication strategies concerning the organisation’s strategic vision, values, ethics and culture.