Falling markets have resulted in some of the hottest tech companies reducing their staff. These layoffs may create opportunities for more traditional companies looking to hire and for potential employees seeking stability.
News from the stock market has been rather grim as of late, especially as high-flying tech stocks lead the decline, with the tech-heavy NASDAQ index down nearly 30% in 2022. Similarly, venture capital investment has retrenched, and the heady days of venture-fueled “growth at all costs” have largely disappeared.
While this is grim news for investment portfolios of tech leaders, it creates an opportunity to address the long-running staff shortages in the technology arena. For years, tech leaders have been competing and often losing the battle for talent with the likes of Meta, Amazon and Google on the one hand and venture-backed startups on the other.
Historically, these employers were high-risk, high-reward propositions for tech workers. If one could survive grueling hours and high turnover, lucrative rewards powered by stock options were the prize. However, as demand for tech workers increased, “churn and burn” cultures were replaced with genteel environments at many large tech companies, and even startups began focusing on everything from base pay to workplace perks.
A shifting balance of power
Inarguably, the balance of power between employees and employers used to be tilted in employees’ favor, especially in the tech sector. This created the unusual combination of high stock-driven pay and relative job security, a proposition more traditional companies struggled to match.
However, economic troubles have disrupted this combination. At large tech companies like Amazon, over 30% of a top-level technical worker’s salary might be in the form of restricted stock units (RSU). An employee that joined Amazon one year ago has seen the value of those RSUs decline by over 60%.
These companies have also gradually shifted their public proclamations from statements of unwavering support for employees and potential recruits to warnings of layoffs. Tesla’s Elon Musk announced a 10% staff cut in June, followed by Meta CEO Mark Zuckerberg announcing reduced hiring targets and “turning up the heat” on performance management.
In this environment, you may find that candidates that turned their noses up at your cash-based comp plan or “boring” stock are suddenly interested in what you have to offer on the compensation front. Similarly, a degree of job stability and predictability might be on the table at your firm and seem far less certain at the brand-name tech companies.
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Selling the intangibles
No one wants a return to the dot-com crash or post-2008 employment market. Still, rationalization in the tech sector should provide a welcome respite for tech leaders who have struggled to attract and retain talent, especially when faced with the opportunity for employees to work remotely for a larger company.
The changing economic environment will likely get more potential candidates in the door at your company, but you still need to make the case that your team is a better place to grow a career than a large tech firm. In addition to whatever benefits you usually mention, if appropriate, share how your team might provide a degree of stability that a tech firm that’s rapidly reorganizing or refocusing due to economic conditions might not offer.
You might also make the case that working for a company not solely focused on technology could benefit the candidate. The risks of working for a purely tech company from a financial perspective are on broad display. Potential employees might also be open to a pitch that a company not purely focused on technology may be an excellent place to build a career.
Building systems and tech to support manufacturing has the dual benefit of improving technical skills and learning the manufacturing industry. Suppose your company makes consumer or industrial products, provides professional services or is a government entity. In that case, you might make a case that your organization offers a richer career path than one focused purely on technology.
While no one can predict where the economy will go in the coming months, it does appear that the large tech companies are retrenching and reducing their hiring. Hopefully, we’ll avoid the mass layoffs and talent “fire sales” of 2000 and 2009, but there are likely more candidates that will be receptive to joining your organization than there were a few short months ago.