How has deep tech hiring transformed since the pandemic?
In 2021, tech hiring trend took off due to rapid digital revolution, however in 2022, startups have been affected by slowdown
Nikunj Verma December 1, 2022
Co-founder & CEO, Cutshort
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Transition in tech hiring since the pandemic-induced slump
For employers and job seekers, navigating 2020 was exceedingly challenging in the wake of the Covid-19 outbreak. However, as the global digital tide swept in 2021, the tech hiring trend picked up further momentum fueled by rapid automation and the digital revolution coupled with global economic recovery and increased technology investments. As a result, in April 2022, successful startups with record valuations, massive hiring and lofty expansion plans drove the market to unprecedented heights, where 50% to 150% salary hikes became commonplace.
Funding crunch in May 2022
However, startups in all phases (growth stage or early stage) have been affected by the slowdown in fundraising since early May 2022 due to the funding winter. As growth-stage businesses attempted to reduce expenses and weather the financing winter, there were some layoffs and a recruiting freeze at 15%. This caused 20% of companies to go into the wait-and-watch mode with recruiting and shelving their expansion plans. Nonetheless, the recruiting activity remained brisk for 65% of companies across tech-enabled industries.
But did it affect tech hiring in India?
The status quo for open jobs in technical areas like software developers, data scientists, and engineers remained unchanged. Given the present demand intensity and India’s status as a worldwide powerhouse for digital innovation, the Indian IT sector has continued recruiting employees with digital skills as needed to support impending technological revolutions. Thus, despite the worldwide economic doomsday scenario predicted by venture capital firms and significant internet corporations, India only had a 15% decline in employment. The present tech slowdown did not translate into a more significant recruiting slowdown; businesses continued to expand their talent pool and improve upskilling initiatives. Capital investments caused India’s GDP to grow by 13.5% from April through June 2022, the most in the previous year.
Things seem to be turning around now
In August, the technology industry saw a drop in IT hiring activity, with a total job volume 15% lower than the peak in April 2022. Among the reasons for the dip in India were the cautionary stance of companies, monetary policy tightening by global banks, and equity market corrections. However, there has been a shift in attitude since businesses are progressively revamping their business models to be more resilient and technology-enabled, improving the job market. As a result, employers across the services sector in India are eager to grow their workforce. Therefore, notwithstanding layoffs at Indian firms, the overall recruitment funnel for jobs and talents across the tech industries is still open.
Some candidate preferences have changed though
Following the epidemic, the businesses of the digital giants skyrocketed; hence, candidates exhibited a significant desire to work in big tech companies due to high wages, luxurious benefits, flexible work environments, and financial security. Nevertheless, in response to the odd and unsettling macroeconomic situation, the giant tech corporations made modifications. In some instances, these changes meant that some functions were no longer required, resulting in widespread layoffs.
However, due to the layoffs, job applicants are now more wary of accepting offers if the company’s financial health poses a significant danger to their long-term objectives. Employees are, therefore, apprehensive about joining unproven, early-stage firms. As a result, applicants have started to value the company’s financial stability, favouring lucrative startups with well-defined business goals, dependable funding sources, and a positive work environment. For instance, according to 60% of recruiters, job aspirants are increasingly asking recruiters about their financial stability.
Thinking about calling techies to your office?
Companies anticipated that getting their workers into the workplace would be simpler when the epidemic eased. However, after two years away, IT employees have developed routines for working from home that they prefer. Due to the nature of their employment, 40% of IT applicants desire to work from home perpetually since it increases productivity and spares them the hassle of moving to an expensive and congested city. Whereas 57% of applicants stated that they preferred working from home as the primary way of working since it allows them to maintain their current habits and lifestyles. The hybrid work model, where companies allow employees to work from home for a few hours each week, is gaining fast acceptance because 60% of tech candidates want to work from home two days per week at least. Therefore, hybrid work seemed to be the ideal strategy for gaining support for returning to the workplace.
The rising importance of Employer Branding
The need for creating a strong employer brand increased because, as businesses learned in 2021, it was becoming more and more challenging to compete in the market without standing out as there was increasing competition to attract and retain talent. Tech- organizations realize that a strong company reputation will benefit talent management. As a result, more modern and cutting-edge Employer Branding approaches were created. These include targeted tactics, employee well-being, work-life integration, employee experience, and leadership buy-in. These approaches don’t take up a lot of time or money and are growing in popularity. Employer and employee expectations have changed dramatically in the wake of the epidemic. Both employers and employees are on the lookout for the best talent. As a result, employer branding has become more significant than ever, with 40% of businesses citing it as their top priority in 2022.
So, what should an organization do in such a market?
Companies are restarting their hiring initiatives, and given that the market is improving, competition for top tech talent will probably increase shortly. India’s firmly embedded principles are robust and healthy, considering that it is a developing country. Despite the short-term setbacks, economic expansion initiatives, additional investments in infrastructure, rising exports, etc., will mitigate the long- and mid-term effects. Therefore, this is the ideal moment for the tech team to establish its team.
How to succeed in the next few months?
Companies are increasingly pivoting towards implementing a lean strategy to employment to avoid oscillating between detrimental layoffs during the recession and excessive recruiting during growth. Hence, here are some do’s and don’ts that are relevant to a market like this.
Avoid these mistakes
●High-skilled workers look for alternative employment options when competitors reduce their workforce size. However, financially secure start-ups may use the softer tech recruiting market to their advantage with their smart hiring procedures rather than cutting themselves off from the talent market to make crucial recruits that were previously unattainable.
● Competitive pay and fair evaluations often lead to happy workers. Hence, presuming that salaries have been adjusted and that candidates have few choices might result in low income that can have an adverse effect on talent and culture, thereby damaging the brand and employer’s reputation.
● The modern workforce actively demands competitive pay and the availability of perks from their employers. Employees now place higher importance on benefits like working from home, having flexible hours, and choosing their workplace. Therefore, relying on compensation to attract talent without a healthy work environment and attractive perks might reduce a company’s competitiveness and lead to job losses.
● Startups should always be prepared to spot good talent by creating a strong network of skilled individuals. For instance, this precise goal is served by online communities where brilliant individuals may connect and get interested in working for the business.
● Company branding strategies that gravitate toward greater empathy, openness, and authenticity have had various positive outcomes in expanding employer brands.
● When startups control and optimize the hiring funnel for quality, not quantity, it results in high-quality candidates.
● To access a vast 10x tech talent pool, employers should look for industry/region-based digital platforms to recruit highly skilled employees.
● The start-ups are improving the joining ratio by providing intriguing opportunities to the employees, such as GPT-3, cutting-edge AI, and automation with the potential to revolutionize a wide range of industries and disciplines.
● Startups are also increasingly employing effective workplace branding that draws in top talent. As a result, valuable insights from audits conducted using surveys, evaluations, social media platforms, and hiring and onboarding procedures aid businesses in better alignment of their hiring strategy with the talent market.