How Dropbox is redefining its talent management strategy amid broader tech layoffs
The mass layoffs continued this week, with the latest cuts coming from CNN, DoorDash, and crypto exchange Kraken. While some companies are battening down the hatches as they watch their peers from afar, others are taking a more offbeat stance. drop box falls into the latter camp.
The digital file hosting service laid off around 11% of its staff in 2021, but its CEO Drew Houston said last month it had no plans to lay off more employees amid the current economic downturn.
Melanie Rosenwasser, Director of Human Resources for the company, spoke with me at Fortune‘s Most Powerful Women Next Gen conference to discuss why the company isn’t downsizing like much of the tech industry, and how it plans to prioritize talent strategy during the coming year.
This interview has been edited and condensed for clarity.
Fortune: How do you see the tech talent market right now?
Our business is quite resilient even in times of economic uncertainty. That said, we took austerity measures a few years ago when we downsized our workforce and experienced a hiring freeze. So we know this territory very well and feel the companies and employees going through this right now.
We will all need to look at how we invest and continue to balance growth and profitability. But I’ve learned over the years and all these ebbs and flows that we go through periods of expansion and contraction. It’s just the natural flow of business. When you go through periods where you need to be more careful about how you spend, it’s a “force function” for two things that are actually positive.
First, when you’re constrained by time, manpower, and budget, it forces you to innovate because you have to work smarter. Second, it is essentially a catalyst for prioritization. One of our leadership commandments at Dropbox is, “You will not be a cheesecake factory.” Cheesecake Factory menus are about 30 pages and you can get tacos or sushi. The principle is that if you try to be the best at everything, you are not the best at anything. Thus, the importance of prioritization exists whether or not you are going through a period of contraction.
How do you build employee confidence and ease concerns in light of industry layoffs?
It starts with being transparent about where we are, why we make certain decisions, the drivers behind them, and the realities of our business. And I think the say-do ratio has to be high because that’s how trust is earned. So if we say it, it has to be true. This is one of the things we learned two years ago when we went through similar things that other tech companies are going through now.
That’s why many companies today are posting company-wide letters on the outside so we can see how they’re doing. It’s really honest, and even though these are tough decisions, it’s a way to maintain employee trust during a difficult time.
With so much in the talent market, what is the priority for you?
We do a lot of analysis around the return on investment of our HR programming. One of the things we’ve looked at quite extensively is the outcomes of going virtual-first, things like productivity. Looking ahead to next year, this is how we continue to measure the effectiveness of this way of working and understand what is not working.
I’m also curious about how to track the quality of hires over time, as we now hire globally and hire non-traditional profiles in industries we hadn’t considered before. So what impact does this have on performance, engagement, and retention? What does it look like over time? We’ve only been doing this for a few years, mostly during the pandemic, so it’s hard to measure. But we hope that in another year we will have more information about the relationship between quality of hire and retention.
We have already seen some initial results. Our attrition rates are very low and our employee engagement scores are higher than ever. We hope this trend will continue, but it is very early and we are still studying it.
What tools are you deploying to attract non-traditional hires in today’s market?
We’ve always had programs for non-traditional hires like our apprenticeship program. These are people with no technical background who want to get into technology. We do a paid internship with technical training and mentorship and often hire them full time. The program is a resounding success. Over the past year, our conversion rate for this cohort was 85%. And of that 85%, about 93% of them are still there a year after getting the offer.
Because we are no longer recruiting only in the Bay Area, New York or Seattle, you naturally have to broaden the profiles you are looking for because the technology is mainly in these places. If you’re recruiting from an area like Ohio, you may be looking for someone in banking or consumer products. But we look at attributes and skills beyond coding ability. As a result, we can tap into talents that we never had before.
Update: Stay tuned for the Wealth at work Playbook, published Dec. 6, for insights and case studies on how Fortune 500 HR leaders are designing their return-to-work strategy for tomorrow’s workforce.
The most compelling data, quotes and insights from the field.
Some refer to 2022 as the year of the “Great Reflection”. For leaders and employees, it was a time to identify and ask for what you wanted, Deloitte Chief Growth Officer Stacy Janiak and Talent Director Stephani Long write in a commentary for Fortune. This time could end soon.
“Leaders have this moment to set the tone and establish the most beneficial practices for their workforces, but it’s a window that could close as we move away from the peak of the pandemic, as organizations become less inclined to experimenting with policies and workers continue to seek greener pastures in new roles.
Around the table
– A former SpaceX engineer is suing the company for age discrimination after he was allegedly stripped of his job. Los Angeles Times
– More and more workers are polishing their resumes, tapping into their networks and learning new skills as job cuts increase. This is a strategy known as “career amortization”. CNBC
– In a sign that the layoffs extend beyond the technology sector, HSBC plans to lay off at least 200 employees from its operations department. Reuters
– Forward-looking companies will need to move from ‘customer first’ to ’employee first’, according to a letter signed by 30 human resources professionals. Bloomberg
Everything you need to know from Fortune.
Take the case. To avert an impending rail strike, Congress passed a bill forcing workers and train operators to accept a previous agreement rejected by several unions. —Kevin Frekig
Nominal wages vs. real wages. The wages of American workers rose more slowly than inflation. So even though wages have increased, people have less disposable income. —Matthew Nestler
Talent Director. To win the talent battleCEOs must be involved in recruitment and retention at all levels of the organization, writes Lara Abrash, CEO of Deloitte, in a commentary for Fortune. —Lara Abrash
AWS. Amazon reportedly lays off 10,000 workers, but few of the staff cuts will affect AWS, the “relatively recession-proof part of Bezos’ empire.” —Geoff Colvin
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