Creating a People-Centric Startup: HR Expert Glenn Nishimura’s Guide to Startup Culture in 2025

In 2024, the tech sector is grappling with significant challenges, including widespread layoffs, rising inflation, and a dampening investment climate. These issues are compounded by forecasts from Export Development Canada predicting only modest global growth of 3% by 2025, with Canada expected to fare even poorer at 1.6%. This environment has left startup founders and their teams navigating a tumultuous landscape, raising critical questions about the future of organizational culture in startups.

Glenn Nishimura, an HR advisor and mentor, discusses these challenges on the podcast Tech Uncensored. He highlights how the past few years have tested the resilience and effectiveness of startup cultures. When revenue is stable, it's easy to celebrate company culture, but economic hardship reveals underlying weaknesses. Founders often shy away from difficult conversations about layoffs or financial struggles out of fear of appearing harsh. However, silence can erode trust among team members, exacerbating the already challenging atmosphere of uncertainty.

The experiences of employees during this crisis are deeply affected by how founders handle setbacks. Nearly every startup depends on referrals to attract top talent, and negative experiences stemming from layoffs can linger, damaging a company's reputation. Nishimura emphasizes that while making tough decisions like layoffs is sometimes necessary, it should be done with compassion and respect for employees' lives and families. Transparent communication about financials, regardless of performance, is also vital to maintaining trust.

Nishimura advocates for a strategic approach to layoffs, urging founders to conduct thorough analyses of their financial and strategic goals. He warns that layoffs affect not just those terminated but also remaining employees, who may experience a drop in performance due to fear and anxiety. Thus, he suggests businesses consider larger but less frequent layoffs to minimize this detrimental impact.

Founders themselves are not immune to stress and burnout amid such upheaval. Nishimura stresses the importance of support systems, encouraging founders to lean on their networks and draft co-founder agreements that outline obligations during crises. This clarity can help maintain focus during challenging times.

Current market conditions have altered perceptions of startup employment, with many professionals shifting to corporate jobs for stability, leaving behind the more volatile startup environment. Many laid-off workers feel disposable and report a lack of empathy from employers during the transition. Nishimura notes that compensation is no longer the sole motivator for employees; intangibles such as a sense of belonging and respect have become increasingly valuable.

The podcast also addresses generational shifts in the workforce, particularly with the entry of Gen Z. These younger employees demand better work-life balance and emphasize personal fulfillment over traditional career paths. This shift may open opportunities for more flexible hiring practices, allowing companies to cultivate diverse talents beyond conventional measures.

Looking ahead to 2025, Nishimura anticipates a cautious recovery, with startups advised to plan their workforce carefully before resuming hiring. Emphasizing agility and efficiency, he encourages startups to evaluate their needs critically while considering alternative staffing options like independent contractors or AI solutions. Overall, the current economic climate necessitates a reevaluation of organizational strategies, with a focus on culture, transparency, and employee well-being becoming key components of business resilience.