Among the signs that have indicated a recession on the horizon, including high interest rates, rising inflation, and flagging consumer confidence, is a new development of potential interest to companies that have been struggling with tech hiring: layoffs. As of the beginning of August 2022, 448 tech startups had laid off nearly 62,000 employees, according to Layoffs.fyi. [i] Others have frozen hiring or rescinded recent offers as tumbling valuations and a cooling venture capital market have forced them to conserve the cash they have rather than seek additional funding to support expanded hiring.
The shift from full speed ahead to putting on the brakes isn’t just affecting startups. Among the high-profile tech companies trimming payroll are Tesla, which is cutting 3.5% of its workforce, and Coinbase, which laid off 1,100 employees and rescinded other job offers. Meta, the parent company of Facebook, has plans to reduce the hiring of engineers this year by 30%. While the accelerating pace of tech layoffs may something of a crash back to Earth for employees who were in high demand during the recent brutally competitive job market, does it signal good news for companies that previously struggled to find qualified candidates to fill technical roles?
The answer is … maybe.
While layoffs might mean there are more qualified tech specialists and engineers looking for work, there isn’t much sign that there are more candidates out there than positions available for them to fill. In June 2022, the unemployment rate was still at a low 3.6%, and the economy added 372,000 jobs. Despite news of layoffs grabbing headlines, experts point out that cutbacks are more isolated than they might seem, and that the majority of the industry is still hiring to fill shortages in technical roles. [iii] Most of the technical workers who’ve found themselves unexpectedly looking for employment have been able to find new positions with relative ease.
Anecdotally, qualified candidates are still able to command multiple offers, if perhaps not as many as they might have last year. This shouldn’t come as a surprise. A weaker economy may change the dynamics of hiring a bit, but it won’t change the fundamental problem underlying the shortage of technical talent—there simply aren’t enough people with the right qualifications and experience to fill certain kinds of high-demand technical and engineering roles.
It remains to be seen if more layoffs and hiring freezes will occur throughout the rest of this year. If the threat of a recession becomes a reality, we could potentially see more job seekers on the market. However, nearly 90% of employers responding to the National Association of Colleges and Employers’ survey indicated that they would be hiring for both full-time and internship/co-op positions in fall 2022, with the remaining 10% saying they would be hiring for only one or the other rather than both—none said they wouldn’t be hiring at all. [iv] So it’s probably prudent for anyone seeking to hire, especially for tech or engineering positions, to assume that they will have competition in identifying and recruiting their preferred candidates in the near future.
Companies rarely have the luxury of waiting for a favorable job market to recruit the right talent to fill critical tech and engineering roles. Fortunately, you don’t have to hope for a softening market to deliver the ideal candidate to you. Integress is a boutique technical search firm specializing in finding engineering and IT talent for companies in the manufacturing, industrial automation, logistics/materials handling, and information technology sectors. Whatever the state of the larger job market, we can help you find the right person to fit your company’s needs and culture, leveraging not only our hiring expertise but also the extensive network of highly qualified candidates we’ve developed over years of recruiting for hard-to-fill roles. Our high-touch, white-glove service gives you the competitive edge in persuading your top candidates to come work for you. To find out more about how Integress can help you overcome your technical hiring challenges, contact us here.
[iii] https://www.cnbc.com/2022/06/25/tech-job-market-still-very-hot-despite-isolated-layoffs.html
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