For many organizations, hiring has been a top priority for 2022. And that trend continues with employers adding over 500,000 jobs in July alone. Yet, one industry has begun to see some cracks in its hiring strategies – big tech. According to Crunchbase, “more than 34,000 workers in the U.S. tech sector have been laid off in mass job cuts so far in 2022.”
So how did big tech go from unprecedented hiring sprees to mass layoffs, rescinded offers and hiring freezes in a matter of months, and what can associations learn from it?
Since the height of the pandemic, many tech companies saw an unprecedented increase in users, demands on their platforms and outside investment. Like purpose-driven organizations, they were looking to expand – whether that meant new product offerings (member benefits), a larger audience (new association members) or new revenue.
This led to strategic growth goals based on potentially unrealistic usage metrics. In an article for the Wall Street Journal, Julia Pollak, Chief Economist at ZipRecruiter, said, “tech companies had a glory period where people were throwing money at them, and that is now over.”
As one of the largest U.S. crypto exchanges, Coinbase was a landing spot for many of the new hires in the tech industry. In February 2022, they announced a plan to “add up to 2,000 employees across our Product, Engineering, and Design teams.”
Yet, only four months later, Brian Armstrong, Coinbase CEO and cofounder, informed staff they would reduce the size of the team by 18%, accounting for approximately 1,100 employee layoffs.
So what happened?
While they cited that much of this decision was based on changing economic conditions, growing too quickly and pushing to lower expenses, it could have been more to do with the strategic plan behind that hiring.
Before we dive into Coinbase’s potential misstep, it’s essential to understand their method. OKR is a goal-setting framework designed to break goals into objectives and key results. The objectives are intended to be ambitions, while the key results help make them measurable and trackable. It’s a popular method in big tech and is the go-to goal-setting framework for Google.
When connecting Coinbase’s situation to their OKR inspiration, it’s easy to see the problem. “Multiple insiders say Coinbase had an internal OKR around its hiring aims,” said Sarah Butcher in an article for eFinancialCareers.
Instead of looking to add resources to solve specific issues or goals, they found themselves hiring for hiring's sake. "This is confirmed by posts on forum website Blind, where some insiders complain of having nothing to do, others complain of overwork and someone says "clueless" leadership has them working on "200 projects hoping something will succeed," Butcher added.
Michael Goitein, Agile Coach for KeyBank, sees the failure as a fundamental problem with turning hiring into a task-oriented decision and not a strategic one. “Coinbase learned the hard way – when you have “task”-oriented OKRs, like ‘Hire 6,000 people,’ rather than achievement-oriented and problem-solving goals, our #vuca environment has other ideas.”
It’s important to note that OKR goals are still a valuable tool for associations – so long as they’re used correctly. For organizations looking to build OKRs around their hiring initiatives, it may look like this:
|Improve our association education offerings.||Hire an instructional designer to add new courses to our platform. Survey members to learn interest areas for coursework.|
|Launch a new email newsletter for members only.||Hire a writer/editor to handle all editorial initiatives.Send at least three newsletters in Q3.|
More often than not, avoiding a hiring mishap starts by understanding the organization's needs. Juan Sanchez, Chief Information Officer for Inteleos, suggests that any hiring decision begins by asking, “what are we going to accomplish by hiring?” Associations should seek deeper outcomes illuminated by the growth strategy and needs of the organization.
While the OKR example above can be a great starting point, what if your association doesn't have a specific strategy yet? Some great places to start include:
Having a hiring goal is never a bad thing – particularly when it’s helping an association achieve its mission and improve the lives of its members. But, like any goal, having a supporting strategy in place will make it much easier to achieve and sustain.
Jose Triana joined the Sidecar team as the Content Manager in 2021. He is a writer and creative focused on helping purpose-driven organizations learn and find value online. When he isn't working on content, you can catch him going for a run or resting with a good book.
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