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The Josh Bersin Company

Why Do Companies Hire Too Many People? And What About Meta's Earnings?

Feb 3, 2024
Meta's impressive revenue growth comes amid significant headcount cuts, sparking a discussion on the dangers of over-hiring. Over-staffing leads to bureaucracy, slowing down innovation. Companies need to embrace a focus on clarity and efficiency while reassessing their hiring strategies. Improved internal mobility and adaptive leadership can better engage teams. Additionally, leveraging technology and performance-based pay can optimize workforce management, as demonstrated by Netflix's success.
22:52

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Quick takeaways

  • Over-hiring leads to bureaucracy and inefficiency, demonstrating that companies should focus on having fewer employees for greater clarity and productivity.
  • Evolving HR processes into strategic talent advisory roles can mitigate overhiring while enhancing internal mobility and employee retention.

Deep dives

The Hire-to-Grow Mentality

Many companies operate under the 'hire to grow' mentality, believing that increasing headcount directly correlates with business growth. However, this approach often leads to diminishing returns, where the productivity of additional hires declines as the team becomes larger and more unwieldy. Larger teams require more management layers, which can further decrease the efficiency of individual contributors. Revenue per employee metrics highlight this issue, revealing that companies with excessive staff can struggle to outperform their more streamlined competitors.

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