Mass layoffs continued this week, with the latest cuts coming from CNN, DoorDash, and the crypto exchange Kraken. While some companies are battening the hatches as they watch their peers from afar, others are taking a more unphased been-there-done-that position. Dropbox falls in the latter camp.

The digital file hosting service laid off about 11% of its staff in 2021, but its CEO Drew Houston said last month that he has no plans to lay off more employees amid the current economic downturn. 

The company’s chief people officer Melanie Rosenwasser sat down with me at Fortune’s Most Powerful Women Next Gen conference to discuss why the company isn’t pulling back on its headcount like much of the tech industry, and how she plans to prioritize talent strategy in the coming year. 

This interview has been edited and condensed for clarity.

Fortune: How are you thinking about the tech talent market right now?

Our business is fairly resilient even during economic uncertainty. That said, we took some austerity measures a couple of years ago when we right-sized our workforce and went through a hiring freeze. So we are very familiar with this territory and feel for companies and employees going through this right now. 

All of us will have to look at how we invest and continue to balance growth and profitability. But I’ve learned through 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 of needing to be more thoughtful about how you spend, it’s a ‘forcing function’ for two things that are actually positive.

First, when you’re constrained on time, headcount, and budget, it forces you to innovate because you have to work smarter. Second, it’s basically a catalyst for prioritization. One of our leadership commandments at Dropbox is, ‘Thou shall not be a Cheesecake Factory.’ Cheesecake Factory menus are like 30 pages long, and you can get tacos or sushi. The whole premise is if you’re trying to be the best at everything, you’re the best at nothing. So the importance of prioritization exists whether or not you’re going through a period of contraction.

How do you engender employee trust and ease worries in light of industry layoffs?

It starts with being transparent on where we’re at, why we’re making 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 the way trust is earned. So if we say it, it needs to be true. It’s one of the things we learned two years ago when we went through similar things other tech companies are going through now. 

That’s why you see a lot of companies today publishing companywide letters externally so that we can see how they’re handling it. It’s really aboveboard, and even though these are tough decisions, it’s a way to maintain employee trust during a difficult time.

With so much going on in the talent market, what’s the priority for you? 

We do a lot of analytics around the ROI of our programming in HR. One of the things we’ve studied quite extensively is the results of transitioning to virtual-first—things like productivity. As I’m thinking about next year, it’s how we continue to measure the effectiveness of this way of working and understand what doesn’t work.

I’m also curious about tracking the quality of hires over time because now we’re hiring all over the world and hiring nontraditional profiles from industries that we previously didn’t consider. So how does that impact things like performance, engagement, and retention? What does that look like over time? We’ve only been doing this for a couple of years, most of that time was during the pandemic, so it’s hard to measure. But we’re hoping that as another year goes by, we’ll have more information on the relationship between quality of hire and retention. 

We’ve already seen some early results. Our attrition rates are very low, and our employee engagement scores are higher than ever. We’re hoping to see that trend continue, but it’s very early, and we’re still studying it.

What tools are you deploying to attract nontraditional hires in the current market?

We’ve always had programs for nontraditional hires like our apprenticeship program. These are folks without tech backgrounds who want to move into tech. We do a paid internship with technical training and mentorship and often hire them full-time. The program has been wildly successful. In the last year, our conversion rate from that cohort was 85%. And of that 85%, about 93% of them are still here one year after they received the offer.

Because we’re no longer just recruiting from the Bay Area, New York, or Seattle, you naturally have to expand the profiles you’re looking at because tech is mainly in those places. If you’re recruiting in an area like Ohio, you might be looking at someone from banking or consumer products. But we’re looking at attributes and skills beyond coding ability. As a result, we can tap into talent that we never had before.

Amber Burton
amber.burton@fortune.com
@amberbburton

Update: Stay tuned for the Fortune @ Work playbook, now publishing Dec. 6, for insights and case studies on how Fortune 500 HR leaders are designing their return-to-office strategy for the workforce of the future.

Reporter's Notebook

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 alike, it was a time to identify and ask for what you want, writes Deloitte’s chief growth officer Stacy Janiak and chief talent officer Stephani Long in a commentary for Fortune. That time might soon be coming to an end. 

“Leaders have this moment to set the tone and establish practices that are most beneficial for their workforce—but it’s a window that may be closing the further we get away from the height of the pandemic, as organizations once again become less inclined to experiment 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 allegedly being stripped of responsibility. Los Angeles Times

- More workers are polishing their resumes, tapping their networks, and building new skills as job cuts spike. It's a strategy known as “career cushioning.” CNBC

- In a sign that layoffs are extending beyond the tech sector, HSBC plans to sack at least 200 employees from its operations department. Reuters

- Future-thinking companies will have to move from “customer-first” to “employee-first,” says a letter signed by 30 human resources professionals. Bloomberg

Watercooler

Everything you need to know from Fortune. 

Take the deal. To avoid 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 vs. real wages. Wages for American workers rose slower than inflation. So even though pay went up, people have less disposable income. —Matthew Nestler

Chief talent officer. To win the battle for talent, CEOs have to get involved in recruitment and retention at all levels of the organization, writes Deloitte CEO Lara Abrash in a commentary for Fortune. —Lara Abrash

AWS. Amazon is reportedly laying off 10,000 workers, but few of the staffing cuts will affect AWS, the "relatively recession-proof part of Bezos’s empire." —Geoff Colvin