Tech Hiring Slowdown – Is it the Economy or the Lack of Talent?

If you are currently in the tech field, recent revelations from economic and industry experts might have you reeling. On the one hand, we have running tallies of tech layoffs occurring across the globe, particularly in large-enterprise organizations; on the other, we see low unemployment levels in the tech sector, with record tech job openings waiting to be filled amidst hard-to-find talent. So, what as tech staffing leaders and hiring managers are we facing? Is a slowing economy hitting the tech sector hard that we aren’t willing to accept? Or an insatiable demand for talent that renders tech hiring stagnant because of the lack of candidates? The latter, of course, is the better boat to be in, albeit just as frustrating to organizations in desperate need of tech expertise. However, for individuals who have recently experienced the misfortune of a layoff or downsizing, high demand-low supply could be welcome news for a new job search.

Looking at layoffs through a different lens

A recent Forbes contributing article was a refreshing reminder that the current tech layoff momentum may be temporary in nature and might be the unlikely catalyst needed to address the tech talent shortage plaguing smaller and mid-size companies. Dubbed the Great Technology Talent Redistribution, the loss of a tech job at one of the giants, may be the gain of a tech professional for an organization that has been unable to compete for top talent.

“While this would normally not be good news, I see this as a net positive gain for the industry. Large firms can trim their sails and right-size efforts, businesses in desperate need of talent can now find help, and technologists can maintain employment.”

~ Tracey Welson-Rossman

We’ve discussed this same idea of level-setting the tech field before, especially as it relates to inflation effects on hiring. Experts like Josh Bersin offer a similar explanation to tech downsizing as above – where companies “got too big, too fast” and are now overextended and needing to make some adjustments. Those adjustments can open up the talent pipeline and relieve some of the hiring pressure felt throughout the rest of the tech sector.

The data support the lack of talent as the main culprit for the slowdown of tech hiring.

Industry associations for IT and Engineering staffing, like TechServe Alliance, publish a monthly IT employment index after the BLS numbers are released each month. For the past several months, the synopsis has been relatively unchanged – flat hiring growth against a record number of jobs available amidst the high demand for tech talent. The latest index released for August 2022 noted IT employment was up just 0.19% over July 2021, yet according to the analysis, there is more to the numbers than meets the eye.

“There is plenty of demand and positions open, but there are just not enough IT professionals around to meet the needs of businesses.”

~ Mark Roberts, CEO of TechServe Alliance.

And it’s been that way for months.

As technology continues to evolve, companies of all kinds across the globe must keep up with the demand for innovation. This is reflected in the sheer number of positions open. In fact, DICE just reported that “job postings seeking technologists were up 52% in the first half of this year compared to the first half of 2021. From January to June, job listings increased by 42%.”

So, what can companies do to secure the talent they need and jumpstart stagnant tech hiring trends if the demand is clearly there?

Increasing the speed-to-hire is the priority, but it’s not as easy as you would think, especially when highly specialized skills are needed. When a specialist is in demand, they are a golden ticket, courting multiple offers and weighing their options. Hiring companies must generate ultra-competitive packages to win out and move the candidate through the process of starting on day one much more quickly. Streamlining interviews, shortening negotiations in order to sign quickly, and fast-tracking onboarding are areas on which to focus.

Of course, that scenario works when the talent is readily available, to begin with.  We are still experiencing a pre-pandemic skills gap magnified by pandemic-induced early retirements, job-shifting, and slower return-to-work rates because of lifestyle changes (like remote work). TechServe Alliance, in a recent article, also suggested, “For companies trying to fill their IT openings, some of the struggle is out of their control…schools cannot mint new IT talent nearly fast enough to keep up with demand.”

To bridge the gap and keep the talent flowing, hiring managers should consider:

  • Flexible work options
    • RTO is a hotbed issue, and many surveys point to this as a deterrent for candidates, especially in the tech field, where professionals have historically enjoyed a remote work lifestyle. The company that embraces flexible work options will get more likes.
  • Expanding the Geo-Search for Talent
    • In line with offering remote work as an attractive feature for candidates, seeking out remote workers expands your talent pool beyond your traditional sphere (and sometimes at a cost-savings based on lower-cost locales.)
  • Creating opportunities to rejoin the workforce
    • There are talent demographics (working parents, primarily women) who were slower to rejoin the workforce after the toll the pandemic took and the change it may have caused to family dynamics. Creating a specific avenue for this professional group and enticing retirees to step back into the ring, even on a consultative basis, could fill seats.
  • Re-evaluate hiring criteria
    • It’s become a much-talked-about issue that formal education requirements can sometimes exclude candidates for roles where their knowledge and experience would be an asset to the position. Consider looking at your current job postings and adjusting the requirements and language of those posts to ensure you are being as inclusive as possible to reach a bigger audience.

The technology talent shortage is not an overnight phenomenon. Actually, it has been a point of contention prior to 2020. Since over a decade ago, leaders have been lamenting the talent shortage and skills gap across most industries, with tech taking center stage. Companies have ultimately been playing the longest-running chess game, setting up their next moves to get them out ahead of the competition. Fortunately, staffing leaders in the technology field have been dedicating resources and formulating strategies to increase access to talent and support companies amidst long-standing tech hiring challenges, even as they face the possibility of a down economy.


At SSi People, we have amassed a large talent pipeline and a team of expert recruiters who will help you build the workforce solution you need that will work in today’s environment and scale to future talent conditions. Contact us today to learn more.

 

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