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A friend of mine told me he recently lost 50% of his team when 7 out of 28 found new jobs.

The math, at first, did not make sense – last time I checked, 7 was not 50% of 28.

“Yeah Jim, but those 7 who left contributed 50% of my team’s productivity,” he said.

That’s a conundrum facing employers everywhere these days. As Business Insider just reported, despite all the hubbub about how employers seemingly are back in charge, companies simply do not have enough talent for the tasks they need done.

Yet we still get articles like this, discussing how “the bosses” feel more empowered to claw back some of the power they had before the pandemic-fueled remote/hybrid work explosion. Even worse in my opinion, The Wall Street Journal’s Chip Cutter notes, companies are laying off people without laying them off – shifting back to requiring workers back in the office, reassigning employees to other projects or even other locations, requiring managers to give employees poor performance reviews – in general, treating employees poorly enough that they want to quit.

Besides that, entire sectors seem to have settled on an arbitrary percentage of workforce reductions. For tech CEOs, it seems to be 6%, even though the companies in question have different business models, income statements and balance sheets. It’s like industry leaders are just following the herd, as Fast Company magazine reported.

Workforce Reductions Carry Hidden Costs

Look, I get it. Dire economic predictions abound, and the economy of early 2023 is not like the economy of 2022, 2021, 2020, etc. You want to keep investors happy; you want your company to increase efficiency; you do not want unnecessary costs, employee or otherwise.

But arbitrarily picking a headcount and driving people out the door is, frankly, dumb, dishonest and can backfire.

The Ripple Effect of Poor Employee Treatment

How do you think I feel about how you just treated Charlie? I’ve worked next to him for 10 years. We’ve secured multiple deals and run many a successful project together. You’re going to make him move from Chicago to San Francisco to keep his job?

Seeing this, I might start looking for my own exit. Others on Charlie’s team might feel the same way. Cohesion and institutional knowledge fly out the door with key team members, and that stellar team’s performance plummets. That’s how you lose 7 out of 28 people and half – or more – of your team’s productivity.

To be fair, these reports do note that risk – your highest-performing employees are often the ones who can easily find work elsewhere. And in a world of “known uncertainty,” finding people who can do the work is still a struggle.

So do not follow the herd. Look at your balance sheet, cash flow, productivity, what projects your teams are handling, and make a decision. And if you must trim your workforce, do it honestly.