When Netcore’s CEO, Kalpit Jain, asked me for advice on whether we should go ahead with our hiring plans or slow down, my answer to him was: “This is a great opportunity for us. We will increase our costs if we go ahead with the offers made and new hires planned and that will decrease our profitability for the coming year or two. But this is a time to build for the future. Let’s continue with business as usual, even though revenues will be lower. Focus on efficiency where possible, but let’s not try and overly worry about every line-item cost. Business is a continuum – if we can keep the focus on our employees and customers (because we have no investors to worry about), we will come out ahead. Raise the bar for hiring and go ahead. This is the time to improve our talent and make the right investments in the future – and quality talent is the best investment we can make. Because there always is a tomorrow.”
There is one more reason for not going aggressive on the hire-fire culture. It creates uncertainty, which leads to tension and mental agony for employees which then undermines performance. No one knows when the next wave of cuts will come. It pits management against the employees – at the time when both need to be in complete sync to make sure customers’ interests are not compromised.
At Netcore, I have always taken the long view – good times don’t always last so one must save for rainy days, and neither do the bad times. Keeping a cool head and stable work environment is very important to ensure that happy employees deliver their best. That is how long-term value is created. The temptation is always there to cut staff costs at tough times like this, but as they say, every action has a reaction. Damage to employee morale stays – memories don’t fade easily when teams are damaged, friendships are broken and it becomes a battle for survival among those left. These scars don’t heal easily.
Tomorrow: Proficorns vs Unicorns (Part 3)
