Everything has changed. Everything is the same.
Uncertainty has been a constant in the tech industry over the past two decades. From the dot-com bubble bursting in the early 2000s, to the global financial crisis of 2008, and the challenges brought by the COVID-19 pandemic in 2020, the tech job market has seen its fair share of ups and downs.
Amid this ever-changing landscape, one thing remains clear: people are the lifeblood of the industry. Companies must find a way to navigate through uncertainty while retrenching, recruiting, and retaining people.
The juxtaposition of an increasing need for tech talent and mass layoffs can be a challenge for organizations. Navigating this landscape requires strategic thinking, adaptability, and human-centered compassion.
A timeline of the tech industry
To understand where we are now, it’s worth taking a trip through the past 20 years and reflecting on lessons learned.
2001: Balancing supply and demand
In 2001, the tech industry found itself in a paradoxical situation. News articles reported falling tech jobs, especially in the aftermath of the dot-com crash, while simultaneously highlighting the challenges companies faced in hiring tech staff.
This conundrum illustrated the cyclical nature of the tech job market. In times of economic downturn, tech jobs may become scarcer due to cost-cutting measures, but demand for skilled tech professionals persisted as companies looked to innovate and stay competitive.
2009: Tech jobs amid financial distress
The global financial crisis of 2008 had a significant impact on tech jobs. Many organizations faced financial distress, leading to job cuts and a decrease in tech positions. Even in these challenging times, tech talent remained essential. Companies that strategically retained or recruited tech professionals were better positioned for the eventual economic recovery.
2013: Tech talent shortages emerge
By 2013, the tech industry had rebounded, and a new challenge emerged: tech talent shortages. As technology became increasingly integrated into all sectors of the economy, the demand for skilled tech professionals soared. Companies found themselves in fierce competition for a limited pool of talent. This period emphasized the need for proactive talent acquisition strategies, including training and upskilling programs.
2018: Tech dominates the job market
In 2018, tech continued its ascent, with four of the top five most in-demand jobs being tech-related. This marked a significant shift in the job market, where technology skills became a requirement for many positions in an organization, not just traditional tech roles, making tech a valuable asset across multiple industries. Companies recognized the pivotal role of tech talent in driving innovation and digital transformation.
2020: Balancing supply and demand
The year 2020 brought a unique challenge to the tech job market. While there was still a strong supply of engineering talent, especially as remote work became more prevalent, the demand for this talent appeared to vary. Some companies were thriving and actively hiring tech professionals to support their digital initiatives, while others faced financial constraints.
Alongside this, women were pulling back from the industry. In Australia during this time, female employment participation rates fell 2.9 percentage points. Many of these talented people aren’t back yet. During the lockdowns in Australia, parents were required to assist with their children’s online schooling, this created a demanding workload. Added to that was a lack of social interaction which led to women being fatigued. Diminished well-being makes it harder for people to engage in education and employment.
2023: Navigating uncertainty amid mass layoffs
Fast forward to 2023, and the tech job market once again finds itself in a paradoxical state. Tech jobs remain in high demand as organizations race to digitize and innovate in response to evolving market conditions. Simultaneously, mass layoffs have left talented tech professionals in search of new opportunities. It feels reminiscent of 2001.
What are the lessons we’ve learned?
Recruitment, tech, and business are three areas that rely on people. And people like to be treated with respect.
Technologists have long memories, extensive networks, and they talk, a lot. They remember which organizations fired first and then slowed down to consider other options. They remember the time that their team was a target of layoffs and how they spent weeks or even months anxiously wondering if they would also lose their job.
Likewise, they remember more positive experiences. They remember places where the recruitment team kept them informed the whole way through the process, even if they ended up not getting a job. They remember the manager who helped them grow their career.
What we should have learned from the past 20 years in tech, is that a thriving company requires great people. Getting great people into your organization requires a candidate-centric process, with the people aspect front and center of decision-making. Below, are some aspects to consider.
1. Recruit strategically
In uncertain times, organizations should be more strategic. Simply hiring five engineers won’t help you identify the critical roles and skills needed to support your business goals. Instead, take a step back before recruiting and implement a skills assessment framework. This could let you objectively evaluate your current team skills and gain an understanding of where capability uplift is required. The emphasis should shift toward skills and competencies, rather than traditional qualifications.
Our industry has a bias towards hiring seniors. What about looking to hire talented juniors and fast-track their skill development with clear growth plans? This helps not only your individual organization but also the supply of talent for the wider industry.
Uncertain times mean that the cost of making a wrong hire is more significant. Odds are people in your team are experiencing stress and fatigue in their lives. Bringing in a new employee has the potential to impact team dynamics, project timelines, and company culture.
There is a risk of hiring for a ‘cultural fit’ over skillset here, which can lead to creating or hiring a very homogenous group. But when business success relies upon resilience and innovation, diversity is critical.
2. Diversity and inclusion
Tech is rightly responding to the ever-growing body of research that shows diverse teams are more innovative and productive.
Building diverse tech teams is essential, but we still have a long way to go. There are still alarming statistics showing that women drop out of technology careers at double the rate of men. A way to help underrepresented people stay in the industry and thrive is through robust skills assessments and career growth plans. For example, currently, in Australia, women are promoted 2-3 years slower than men. Organizations that sit outside of this metric have clear and specific evaluation criteria for hiring and performance reviews. Organizations that really value diversity inclusion add to this baseline with bias reminders before hiring or performance reviews, with some organizations’ events having a bias monitor sit in on candidate reviews for hiring and promotion decisions.
For an organization to have diversity in its technical teams, it needs to start with inclusive hiring practices. Being an inclusive workplace means considering intersectionality and the compounding impact of being in multiple underrepresented groups. For example, of the 25% of women working in tech, women identifying as Asian or Pacific Islander make up 7%, with Black women accounting for only 3%, and Hispanic women just 2%.
Combatting this requires ensuring that job advertisements aren’t using gender-coded or racially-coded wording that may dissuade any group of people from applying for roles. Having clearly defined selection criteria with pre-assigned weights is another strategy that helps to minimize subjectivity.
Overall, it is important to be aware that underrepresented people are held to tougher evaluation standards in the recruitment process. By explicitly defining the recruitment process it becomes more equitable and can help attract underrepresented talent.
3. Reskilling and upskilling
One powerful way to maximize your current workforce's potential is by investing in career growth plans for your existing employees. This strategy can prove to be more valuable than a constant cycle of hiring and firing.
Employee satisfaction and retention are vital during uncertain times. Providing development opportunities through formalized growth plans has been shown to drive engagement by over 15%. Empowering employees to set goals for their future and work towards them not only increases engagement and retention metrics, but also provides a capability uplift to the organization. Who doesn’t love a win-win?
Be prepared to pivot your recruitment strategy as market conditions change, and as they do, over-communicate with everyone.
Remember what it’s like to be left waiting, unsure if your CV has made it through the first round or not, unsure of when you’ll hear back from your interview, unsure if you’re still in the running or have been discarded? Don’t do that. Open communication is better than none at all, even if it’s as minimal as: “You’re still in the running, things are taking a bit longer on our end than expected. We’re sorry but will get back to you as soon as we can.” This approach is much better than leaving someone waiting.
Beware the brand damage that can occur.
If you’re using a recruitment firm, ensure they understand your employee value proposition. I’ve recently heard of a recruiter telling a candidate that she needed to wear a skirt to her interview. She was unsettled by this, and attended the interview in dress pants, only to discover that the entire organization wears jeans and a t-shirt. She almost withdrew her application because she didn’t want to work somewhere that enforced backward dress codes.
Of course, that was just the recruiter’s opinion, not the organization’s, but anyone who’d interviewed for that position would now associate that company with regressive policies.
We’ve been here before, we’ve learned the lessons.
The tech job market's ebbs and flows have taught us that tech talent remains invaluable, regardless of economic conditions. Tech talent is a key driving force behind innovation and growth. As organizations grapple with uncertainty in 2023, they should remember the lessons from the past, we’ve been here before.
The basics of recruiting and leading with human-focused compassion will drive the best results. If you want to keep your interviewees waiting, waste their time with low-ball offers, and withhold important information, then you can most certainly do that. But a better strategy would be to focus on the candidate’s experience. Competition for top talent is fierce, that’s always been the case, so you want your recruitment process to be a positive reflection of what you’re like to work with.
Keeping these things in mind, organizations can position themselves for future growth and success in the ever-evolving tech industry.