Enterprise businesses are in the middle of mass restructurings and hiring freezes. Without the ability to hire new employees, this situation risks burdening teams with heavy workloads. But there is a solution.
Here’s how companies can turn to flexible workforce models to address the hiring freeze and sustain their operations.
What has caused the big freeze?
Macroeconomic conditions have been the driving force behind the corporate hiring downturn. High interest rates, inflation and economic uncertainty led many companies to restructure quickly.
For some, these changes have been made out of necessity. Many companies took on significant debt during the Covid-19 pandemic and have since struggled to refinance these debts due to higher borrowing costs.
However, other businesses, which had recruited heavily prior to the economic downturn, used it as an opportunity to trim their workforces.
In big tech more than 98,000 employees from 330 companies were laid off in the first half of 2024. Google laid off over 12,000 employees in 2023. Meanwhile, jobs platform Indeed reduced its headcount by 8% in May 2024. Even the job advertisers went jobless.
As this great restructure happened, many companies decided to impose hiring freezes, while they figured out how to organise their remaining staff. In the meantime, this left smaller teams grappling with heavier workloads. This has meant many companies, already reeling from layoffs and seeking operational efficiency, now face low staff morale as well. How can companies address this situation without resorting to hiring?
Let’s get flexible
Hiring freezes have coincided with, and indeed helped fuel, the prevalence of flexible business models. My own business helps to assemble creative teams that work as an extension of companies’ in-house operations. Talent working within these models isn’t classified as a new recruit so it can be far more cost-effective than hiring an external agency.
Some companies are hiring C-suite roles fractionally, as well as specialised teams. Indeed, the rise of the fractional CMO and CFO is well documented. Companies at awkward stages of growth get as much time with a seasoned executive as they can afford and top talent gets the variety of working on different business challenges. It’s a win-win situation.
A quick LinkedIn search shows you that Google has scaled up their contingent workforce using staffing company Adecco. Hiring in this way doesn’t impact company headcount, and therefore, their bottom line.
But this is far more than a simple financial decision. Leveraging talent in this way can provide specialised skills on demand and bring in new energy to respond to business challenges at a time where organisations can’t tolerate passengers.
Three businesses that could benefit from using fractional talent
Before its IPO, Reddit could have built a team of fractional CFOs to provide strategic financial oversight and guidance, helping the company scale effectively and prepare for its new stage.
Google could use a flexible engineering unit for specific projects, especially in areas such as AI and machine learning. This unit could drive innovation and foster a startup mentality without long-term commitments.
WeWork
During its restructuring phases, WeWork could have employed fractional office managers and operational consultants to streamline administrative functions and manage office spaces effectively.
There’s no doubt that restructuring activity will remain high for the rest of 2024. Companies must stay flexible or risk being left behind.
