How to Guarantee Your Tech Department is Prepared for a Recession
There’s a 77% likelihood that we’ll face an economic downturn in the next 24 months. If that’s not intimidating enough, there’s a 58% chance that it will begin by mid-2020. Whether you’re the head of IT at a Fortune 500 organization or you’re at the helm of a tech startup, here’s how to guarantee that your tech department is prepared for a recession.
Budget
Infrastructure
Employees
Reinvesting in your current staff will result in endless dividends – learn about when, why, and how to upskill your workforce when you download our latest ebook.
Budget
Developing a strategic spending strategy is paramount to surviving a recession with as little impact as possible. You should always have a thorough understanding of your tech department’s budget, but recession planning requires a deeper dive into your expenditures, pinpointing where exactly your team can cut arbitrary costs without affecting quality.
A Harvard Business Review study found that the majority of resilient companies that successfully navigated the Great Recession in 2008 did so by cutting operating costs earlier in the recession cycle than their peers. This budgeting strategy is especially critical for startups; at the height of the Great Recession, venture funding fell a dramatic 50% – even the deals that came to fruition at that time were impacted, as their average payout size dropped significantly.
Here’s what you need to ensure before the next recession:
- You’ve researched the cost-effectiveness of your operations.
- You’ve established which tools are indispensable for business success.
- You’ve determined areas where you can improve workflow or reduce exorbitant costs.
- You’ve created a prioritized list of disposable discretionary expenses.
Infrastructure
After you’ve completed this preliminary budgeting process, you need to take a close look at each of the technologies that are instrumental to your department functions. Often, there are ways to save even further by streamlining or automating these tools. Consistently tracking KPIs, like project delivery time, quality assurance, and total cost of services, can provide valuable insight into the nooks and crannies of your processes.
Tip: Bring this information to your executive team. Explain what your technology enables, the kind of support you require, and the efforts you’re making to create a more durable business plan. This will make you a key player in future conversations, as opposed to someone who is called upon to execute a plan after the major decisions have been made.
Here’s your quick checklist:
- You’ve decided which tech upgrades are noncritical and can be delayed or scrapped entirely.
- You’ve investigated all equipment lifecycles and concluded which workstations can be stretched and for how long.
- You’re tracking essential KPIs to your department.
- You are currently or are prepared to use the data from these KPIs to drive business decisions.
Employees
Layoffs are inevitable during a recession, a fact that poses a unique dilemma in the tech industry. Our 10 year-long bull market has widened the IT skills gap, greatly increasing the competition between employers for skilled technologists. One of the main reasons that finding high-quality talent is so laborious is because specialists are often just that – inordinately knowledgeable in one skill or program. In the tech industry, layoffs are especially strenuous because, on top of requiring increased productivity from the remainder of your team, employees are often forced to develop new skillsets on the fly.
Make you sure you take care of the following:
- You’ve analyzed the cost of each of your team members.
- You’ve determined which, if any, employees are either ancillary or indisposable.
- You’ve pinpointed the pertinent skills that the department is lacking or may be after layoffs.
- You are currently or have already begun offering skill-building opportunities to your team.
The Tool That Will Help Ensure Your Tech Department is Prepared for a Recession
The question is not if a recession is projected, it’s when. While we’re unable to safeguard your organization from all potential fallout, we can offer at least one fail-safe solution – find it here in our latest eBook:
Upskilling Your Workforce: A How-To Guide for Embracing the Digital-Skills Gap and Improving Your Bottom Line
In “Upskilling Your Workforce,” we dive into everything you need to know, from the current state of the skills gap and the benefits to upskilling to an actual step-by-step manual for how you can upskill in your organization. By leveraging the brightest minds that you have in-house and retraining them in skillsets that are critical to your operations, you can ensure that you’re prepared for an economic downturn, regardless of when the other shoe drops.
Reinvesting in your current staff will result in endless dividends – learn about when, why, and how to upskill your workforce when you download our latest eBook.
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