How our startup got through 2 recessions without relying on layoffs • TechCrunch| Roadsleeper.com
Entrepreneurs apply capital often face two major challenges: operating at scale and navigating unforeseen market conditions. And often, when market winds shift and growth falters, startups and public companies alike resort to massive layoffs to avoid burning through capital.
According to Crunchbase, almost 45,000 tech workers have been laid off this year. In recent months, notable companies such as Glossier, Go Puff, Klarna, and Netflix have cut staff, and many more online companies have paused to “reevaluate hiring.”
At HackerEarth, we’ve successfully navigated two recessions without relying on layoffs. Over 10 years, we’ve found that a sustainable approach to recruiting and piloting helped us navigate the currents of uncertain market conditions.
Here’s how we did it:
We approach recruitment with great precision, hiring only when necessary and keeping a tight team to give us a buffer when things go wrong.
Used at a safe following distance
To stay lean, we maintain set goals and best practices that allow us to ebb and flow with a changing market and avoid reacting on a dime. At any given time, our staff pool is around 90% of what we consider ideal. Think of it like the distance you need to keep between yourself and the car in front of you when you’re driving on the highway. If we assign our team to fit 100% of our needs (follow too closely), there will be a domino effect when the market changes rapidly, causing internal “accidents”.
However, if we operate at a “safe following distance”, we have time to react without causing major disruption to our employees. We maintain this by organizing our recruitment preventively to address current and future challenges as opposed to recruiting reaction for a short-term fix.
This “safe following distance” not only allows us to respond quickly to change, it also leads to greater efficiency per employee. When you’re staffed just below capacity, people get more opportunities to go beyond their defined goals. If done well, this tension results in greater efficiency and growth for the entire team.
Built a stronger culture to ensure we met product goals
Operating 10% below our ideal means that it is necessary to lean on culture to fill the gap. When hiring, we prioritize candidates with diverse and flexible skills who can adapt to changing requirements. This ensures our team is able to multi-task, helping to reduce siled thinking and behaviour.
