Two previous posts have talked about conducting triage on your IT projects and what you should do in shutting down those projects that don’t make the cut..
Now, what about your IT staff?
Having been on both sides of employee layoffs, I can tell you that they are not any fun for anyone involved. This is especially true if there is little or no deadwood among your staff. In such a case, every cut hurts, not just because of the loss of headcount, talent, and skills, but also because each lost staff member means lost expertise in your firm’s custom systems and adopted commercial technologies.
On the other hand, if you do have some less-than-ideal employees among your staff, this may give you an opportunity to let them go while (one hopes) holding onto your best people. The real risk, however, is that the opposite may happen: your best people, worried about layoffs, may preemptively jump ship to another job.
Avoid or Reverse the Dead Sea Effect
I have written elsewhere about what I call the “Dead Sea Effect.” Put simply, it’s when over time your best IT personnel leave, and what remains behind is an increasingly mediocre IT staff. As this happens, your IT department becomes less and less productive, effective, and reliable. I’ve watched this happen in person, and the results are not pretty.
If you are not careful, your budget cutbacks may well trigger the Dead Sea Effect in your own organization. Your most qualified and talented people are the ones who can best find jobs elsewhere, and so they are the most likely to leave if post-retrenchment conditions become sufficient unpleasant.
On the other hand, you can use budget pressures to actually improve the quality of your IT staff. Some time back, I spent a few months doing an enterprise architecture review at a corporation where I had done similar work a decade earlier.
I was struck by the high levels of competency and productiveness in the IT staff compared to what I had seen ten years before. When I brought this up with someone who had been there the whole time, he said that financial pressures over the years had led the company to steadily trim anyone who wasn’t excelling in his or her responsibilities.
Reduce Staff, Not Tools and Benefits
With a tighter budget and a narrowed set of projects, your highest priority is to ensure that those projects come in on time and under budget. That means that you need to have your best and brightest IT personnel highly motivated and working hard, with the equipment and tools necessary to be as productive as possible. Similarly, it’s not unusual to have, say, a kitchen area stocked with free soda and snacks, or a budget for seminars, books, and professional journals. These are benefits that help in small ways to make up for the usual expectation of IT heroics, working nights and weekends to bring an underestimated project in close to deadline.
Cutting the budget for new hardware, better development tools, and IT staff benefits may seem obvious and an easy cut. However, it may be exactly the wrong move, for three important reasons. First, it will reduce the productivity and/or the motivation of your IT staff, adding to whatever existing schedule pressures you have. Second, it will drive away your best people (see “Dead Sea Effect” above). Third, it will likely not save you nearly as much money as getting rid of ineffective or unnecessary IT staff will.
Evaluate Teams, Not Just Individuals
Far too often, upper or even mid-level management views IT employees as free-standing and largely interchangeable units of productivity. Nothing could be further from the truth. Software engineering is one of the most intensely social and cooperative activities in modern enterprises, and there are few things more valuable that a solid software team whose members can work and get along with one another. Laying off one or two members of a team can reduce that team’s effectiveness, destroy morale, and lead to other team members – the ones you probably want to keep – leaving the organization.
Shape Your Teams to Fit Your Projects
In all this, remember that your IT staff exists to complete new projects and support existing ones. If you have been through IT project triage and have shut down those projects that are cancelled, mothballed, or suspended, then you now know what projects remain. Look at your entire IT staff to figure out how you will shape or rearrange the teams for each of those projects.
Act Quickly and Decisively
Few things destroy morale and productivity more than the threat of pending layoffs in the near future. The uncertainty of knowing whether you have a job or not seriously undermines productivity and, again, will lead to the best of your staff looking for jobs elsewhere. As far as possible, get ahead of the rumor mill, make the decisions, and take action.
[Adapted from an article originally written for the online version of Baseline.]