It’s rough out there living and working through this COVID-19 pandemic. It may seem as if we’re living through the 1918 pandemic and the 1929 Great Depression simultaneously. However, it’s not as bad as that (at least not so far). Within a relatively short time, thanks to modern science (and engineers), the epidemic will be managed. Also, the economy is now starting to re-open.
For that reason, during these challenging times, letting go of your engineers should be a last resort. If you needed them before all this started happening, you will need them after it all passes. And they will continue to be in high demand.
Pre-Pandemic Engineering Unemployment Rate Under 5%
It’s important to exercise our memory of the job market just prior to the pandemic. Remember how hard it was to find engineering talent? Once the economy starts to move again, it’s likely companies living in the technology world will need to resume development of new and improved products. Letting engineers go today may seem a sensible way to manage cost, but what will happen when you need them back?
During the worst of the recent recession, when the unemployment rate was double digits, the engineering unemployment rate hovered at or just under 5%. For virtually any job category in the economy, that meant every engineer who wanted a job had one (or was able to get one quickly). Thus, there was extraordinary competition to find and land the talent technology-oriented companies need to run their businesses and to grow.
Fundamentally, other than this severe current situation which will not last, nothing has changed. As companies and jobs come back online, you will want your team back. How confident are you that they will still be there when you’re ready?
In more normal times, it can take weeks to find even the entry-level talent a company needs. To locate the right senior-level talent, especially those high performers with niche engineering skills, it can take months or longer. Besides the lost calendar time, the cost of seeking out, landing, and on-boarding new team members is extensive.
Your Engineering Team: Unique Knowledge of Your Customers and Their Needs
Engineering talent isn’t a fungible commodity. Besides the difficulty in finding qualified staff, it’s likely that your current team has significant domain knowledge. You have already invested in them and their knowledge of your customers, their needs, and the characteristics that make for success in your market. Likewise, they likely have deep insight into your internal processes and any regulatory processes unique to your industry.
They also have the subtle knowledge of your internal staffing network. They know precisely who to contact for information they need to do their jobs successfully. Losing staff like this means a huge hit to productivity—and we’re not talking about just the loss of man-hours for generically competent engineers.
Certainly, crisis situations arise where the company’s survival is on the line. Often, there are no other options to keep the company alive then to layoff or furlough some or all of your engineers. Just realize in doing so, there’s an opportunity cost implicit in that decision.
It would be naïve to assume your engineers will sit on the sideline collecting unemployment when savvy and nimble competitors start enticing your laid-off staff to join their companies. Once those engineers leave for another company, your probability of attracting them back will be very low.
For a technology company, the engineering team is a precious jewel that the company depends on for its very success. Be very careful in making decisions to lay off engineering team members. It could well undermine your competitive advantage and you may not be able to get your team members with mission-critical skills to rejoin your firm—just when you will need them most.
Mitch is the President and Co-Founder of Intelligent Product Solutions (IPS).