Will the recent layoffs increase tech candidates’ commitment to the hiring process?

Anne-Lise Brown
Anne-Lise Brown ↓ citește în 11 minute
May 24, 2023
Citit de 438 de ori

From The Great Resignation to The Great Layoffs

Not too long ago we wrote an article about The Great Resignation, a phenomenon that was at its peak in late 2021, when workers, especially those from high-income industries like IT, felt empowered to embrace change and search for new jobs that were fulfilling their needs, even if that sometimes translated into a period of lack of stability. A piece of research conducted by Microsoft showed that 41 percent of the global workforce was likely to consider leaving their employer within the following year, and 46 percent were planning to make a significant pivot or career transition. And here we are, two years later, facing quite the opposite phenomenon - tech giants, such as Amazon, Meta, Microsoft, or Google, as well as smaller tech companies are going through significant layoffs. According to The Challenger Report, job cuts rose 15% in March 2023, up 319% from March last year, being the highest number of Q1 cuts since 2020 when the pandemic started and the uncertainty of what’s to come was lingering in all industries.

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Source: Challenger, Gray & Christmas, Inc. ©

At the beginning of the year, Amazon announced plans to eliminate over 18,000 roles in total, Microsoft said it will lay off 10,000 employees this year, and Yahoo announced laying off 20% of its workforce by the end of the year, to name a few. This is not something we see just in the United States, but on a global scale. In Cluj-Napoca, the 300 employees of Telenav are going to be laid off until the end of the year, as the company is closing its branch in Romania. Stating the data is not to escalate the panic in the industry, but just to portray the tech industry objectively. As of today when writing this article, in 2023, a total of 679 tech companies laid off 194,189 employees, according to https://layoffs.fyi/, where the numbers can be followed in real-time.

However, all the previous data needs to be taken with a grain of salt. The vast majority of layoffs were not tech roles, nor software engineers, and tech professionals are still in high demand. On the other hand, the layoffs we are seeing now are, to a certain extent, the consequence of Big Tech overhiring during the pandemic when the tech industry was experiencing rapid growth. This gives an advantage to small and midsize tech companies to recruit top talent who might otherwise not have been available. Slabinski, a tech jobs expert at Robert Half, says:

“I’ve seen bad job markets for tech workers, and this is not it.”

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Picture from Samsung's Display Technology Innovation event at Music Gallery

What does this mean for tech professionals in 2023?

The main reasons cited for job cuts have been market/economic conditions, cost-cutting, unit or department closings, financial loss, restructuring, and demand downturn. But a more accurate view of how the market performs is understanding that even with all the recent cuttings, there are still nearly 1.7 job openings per available worker. Big Tech doesn’t represent the entirety of the tech workforce, and tech workers who have been laid off, as well as those growing disillusioned with Big Tech employers, are becoming more approached by companies in the non-tech industries. The tech unemployment rate is dropping, indicating that laid-off professionals are quickly hired back into the tech workforce.

The Pragmatic Engineer newsletter covered the upcoming challenges that tech professionals may face and mentions new grads and less experienced software engineers as being the most affected by this movement. Experienced software engineers have greater opportunities now that they are open to considering companies they wouldn’t have previously, or being recruited by scaleups or more traditional companies that want to implement a tech-first approach. Thus, it becomes much harder for new grads to get into the workforce, when companies have the budget to hire someone more experienced.

Even if there seems to be a silver lining to the cutting trend, people still perceive these times as uncertain, and changing jobs can seem like a risky move to make. If the new company does layoffs, new employees are most likely the first to be let go of. However, not all tech positions are affected the same it seems. Some departments look “safer” than others, in terms of employees getting laid off. We are talking about AI and ML. Microsoft, Google, and Meta have all made it clear that are willing to invest in AI by hiring specialists, even during the hiring freeze in other departments. This ensures a certain safety for AI engineers, ML engineers, data researchers, and other AI-related positions (The Pragmatic Engineer, 2022). Does this mean that a career transition to AI is a smart move? Considering the reluctance to hire inexperienced workers when a pool of seniors is available, it is hard to give a firm answer at this time, but it might be something to keep on the radar.

And talking about AI, what does its relevance in the tech industry mean for professionals? Most Big Tech companies have been investing in NLP (neuro-linguistic programming) teams in order to offer better search recommendations, assistants, and analysis tools. But the innovation brought by GPT-4 leaves some people from the industry feeling unsure about the state of their work, saying that their year-long initiatives to fine-tune NLP models seem obsolete in the face of GPT-4. In a recent edition of The Pragmatic Engineer published in March 2023, Gergely Orosz, the author, lists a few possible outcomes of the rapid adoption of LLMs, one being redirecting NLP efforts to LLMS: “Most large companies will not want to rely on an external vendor like OpenAI when it comes to technology that can be a core advantage.”

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Recruitment Point of View

It’s been a bumpy ride for talent acquisition. Let me remind you of the main stops along the way from the past few years… Ready? Great attrition, great resignation, quiet quitting, mass layoffs… and I’m sure there are some other ‘Greats’ that people could name. The tech market hasn’t linearly navigated these events but rather experienced multiple phenomena simultaneously. Voluntary quit rates are still 25% higher than in pre-pandemic times (McKinsey, 2022). According to McKinsey’s Great Attrition, Great Attraction 2.0 global survey, 55% of respondents who quit their tech, media, and telecommunication, did not return to the same industry, either moving to a different one or not returning to the workforce at all. This highlights an interesting aspect: employers are no longer competing only within their industry, but also across industries, giving hiring managers the new challenge of understanding the common values, likes, and dislikes of candidates and attracting them accordingly. The survey aforementioned evaluated the top motivators and reasons for staying, as well as the aspects that can push employees away.

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It seems like even with the recent layoffs, it is still not easier to hire tech professionals. On the contrary, some hiring managers are no longer reaching out to recently laid-off workers, because even if they agree to go through the interview process, they do so with cynicism and lack of motivation. Many such professionals are choosing to take some time off work and reevaluate their trajectory. (The Pragmatic Engineer, 2022). One of the challenges employers are facing is reframing the employer branding towards showing transparency in being able to provide stability for new hires while navigating uncertain times. A well-thought approach to attracting talent will therefore be highly valued. Candidates are looking for meaning, connection, and stability, and hiring managers can step into the process by offering a personal touch in communicating with them.

On the other hand, we want to mention a recruitment scenario that our clients describe frequently: software engineers don’t prepare for their interviews as thoroughly as they used to because of being in high demand on the market, thus their commitment towards the process is going down, and so does their performance. The obvious question that comes to our mind is if the recent waves of layoffs are going to contribute to candidates being more involved in and committed to the recruitment process and whether this is going to translate into better technical interview performance. Our data show an improvement in this area, compared to the past two years when candidates were over-approached with offers. There are fewer available roles now, and candidates seem to have a higher commitment to the process. But is fear of uncertainty a long-term solution to keep candidates engaged or should organizations rethink their ways to attract and retain talent?

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Picture from Samsung's Display Technology Innovation event at Music Gallery

Nonetheless, we want to bring our usual dose of psychology into this article as well, by mentioning the 5 categories of candidates that are currently on the market, all requiring different strategies in order to attract them, as described by McKinsey’s piece of research:

  1. The traditionalists: career-oriented people, willing to make trade-offs for their jobs and motivated to work full-time in return for a competitive compensation package, perks, and status The majority of them have not quit their jobs during the Great Attrition, and they are less likely to quit without another job lined up.

  2. The do-it-yourselfers: they enjoy autonomy, value workplace flexibility, and crave a sense of purpose. To attract this category, workers must be convinced that organizations can offer something better than what they have created for themselves.

  3. The caregivers and others: are motivated by compensation, but also have other priorities that require more flexibility and support than traditional employment usually offers. Workers in this category prefer organizations that are willing to work with their schedule, while also providing recognition for their contributions at work.

  4. The idealists: these young workers have compensation lower on their list, prioritizing flexibility, career development and advancement potential, meaningful work, a sense of community, and a strong organizational culture.

  5. The relaxers: career doesn’t come first for them anymore. Most of them have achieved their financial goals and might need more than traditional offers to be attracted back into the workforce, including the promise of meaningful work. Most of the latent workforce seems to be represented by them, so it might seem like a good idea for organizations to find a way to reach this category as well.

Knowing these 5 categories of candidates can offer great insight to hiring managers into personalizing their approach according to the pool they are aiming for, as well as further individualizing their value proposition to meet their desired candidate’s needs, rather than having a one-size-fits-all approach to hiring.

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Picture from Samsung's Display Technology Innovation event at Music Gallery

Is it still a good time to work in tech?

Being laid off is not the best experience one can have, but one thing professionals can learn from the recent series of events is not to build their identity around their title, salary, or the company’s name. This is not to say work is irrelevant to our sense of identity - quite the contrary. But the impact we are having with our work, the satisfaction we are feeling from it, the community of like-minded people that surrounds us, and our value as individuals that contribute to society, could and should probably weigh more than status for long-term fulfillment and peace of mind.

Tech talent is still needed, and technology becomes more and more of an inherent part of our society. As the tech jobs expert Megan Slabinski says, “The greatest demand and need we’re seeing for hiring right now, in almost every industry, is for tech professionals.”

As for recruitment professionals… What a time to be alive! The lessons of the past few years have been making recruitment anything but boring. And 2023 comes with yet another great lesson that will ultimately prepare recruiters to navigate the ups and downs of the market and to position themselves with agility in the face of the ever-fluctuating contexts of tech.

We want to conclude this article with an insight from Lia, our Head of Delivery at Human Direct. Lia has worked for a wide range of IT companies, from startups to scaleups, from product companies to corporates such as 8x8, UiPath, Broadridge, Riverbed, Micro Focus, Aera Technology, GIB (IFM Group), Razor Risk, to name a few. With over 10 years of experience in the tech recruitment market, she understands the specificities of this industry and has a great awareness of the fluctuation and evolution of trends. Here is her message to employers and hiring managers to help them navigate these times.

“I have been in this market for more than 10 years now. I have learned that precisely these economic events and phenomena force you to be creative, find new solutions, and improve your strategies and approaches to grow continuously. We have to keep up with these changes and evolve with the market, and this has been a constant guide for us. So personally, I believe that it is a great opportunity for an employer to rethink its position on the candidates’ market, work more on employer branding, and see how to present itself in order to reach the people that would be happy to join their organization. They don’t have to do this on their own. They just need to find the right partner to help them understand the market, the candidates’ mindset, and expectations, and be flexible enough to listen and embrace a new strategy. There is no secret recipe that works for everyone. Each company has its own personality, and this is where we come in, to help them be visible and heard.

Witnessing a company make the most out of its potential, even when the market seems to be on shaky grounds is one of the greatest satisfaction as a professional in tech recruitment and consulting. This is why I would like to invite each of you who feels like they would benefit from an external approach to recruitment from an experienced company with tested and trusted strategies, or even just for a consultation session to gain some insight on the current IT recruitment market, to join me for a virtual meeting. Book a personal meeting with me, and together we will assess what would be the most suitable solutions for your company.”

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Book a personal meeting with me

Together we will assess what could be the most suitable solution for your company.

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