Recruiting Smarter in an economic downturn
Tips for growing tech teams sustainably amid uncertainty
At the height of the COVID-19 pandemic, the need for software engineering talent was at an all-time high.
Recently, there appears to be a shift in this narrative, with notable layoffs, economic uncertainty, and many experts predicting a recession.
When an economic downturn hits, the knee-jerk reaction for many is to cut costs and cease hiring. However, economic downturns are temporary, and businesses that haven't thought strategically about growth will be left behind.i
The race for tech talent remains very competitive, and companies need to use a market slowdown to plan how they will attract critical positions and optimize their recruitment processes.
Now is the time to take advantage of the volume and quality of software engineering candidates that have come into the market. Doing so will help your business remain competitive and drive growth when the economy recovers.
In this article, we'll explore how businesses can think more strategically about tech talent recruitment during an economic downturn by looking at four critical expert tips.
Focus on Talent That Will Strengthen Your Core Product
Balance Temporary Pressure & Long-Term Thinking
Turn Uncertainty Into Opportunity
Create Smarter Recruiting Strategies
For Smarter, Sustainable Tech Talent Recruiting in an Economic Downturn
rEALITIES OF THE MARKET
Although many industries are cooling off, statistics show that the tech job market won't be coming to a grinding halt anytime soon.
Analysis data from the US Bureau of Labor Statistics by CompTIA found that job postings for tech positions totalled 623,627 in May and nearly 2.2 million during 2022 so far, representing a 52% increase over the previous year.
As of June, job openings and turnover remained at record highs, signaling that there is still considerable demand.
In particular, for startups or companies under 500 employees in the US - 46 percent plan to increase their hiring for the remainder of 2022, and just 7.6 percent plan to decrease hiring through the year's end.
In short, the tech market is still highly competitive, and these positions are still hard to fill. Companies certainly need to exercise a degree of caution, but not at the expense of remaining competitive.
With that in mind, here are some considerations for organizations to build smarter, sustainable recruiting practices – even in the face of economic uncertainty.
Tips for Smarter, Sustainable Tech Talent Recruiting in an Economic Downturn
1. Focus on Talent That Will Strengthen Your Core Product
According to McKinsey, companies that thrive during economic downturns and recessions focus on their core (or core adjacent) business areas, for example, their core technology or product, to drive growth and outperform competitors.
Great products keep customers coming back, which ultimately paves the path that drives long-term growth. Companies with the strongest engineering teams will create the best products and gain a competitive advantage.
During an economic downturn, when you might not be able to hire at your usual pace, hiring strategically to strengthen your software engineering team is critical. Focusing recruiting efforts on high-performing candidates that can be impactful, rather than holding out for or taking big swings with “unicorns”, can be a better strategy to foster growth and improve core products while limiting reliance on a few key performers.
Organizations can also look for opportunities to leverage and build on in-house skills by investing in current employees. Investing in training and development increases the value each employee brings to your organization. Additionally, establishing strong career growth and development opportunities can help differentiate you from competitors and attract new software engineering talent to your company.
2. Balance Temporary Pressure & Long-Term Thinking
Hiring high-quality talent is difficult, and many companies don't want to invest in this process when the potential for layoffs and cuts is around the corner.
However, many layoffs affecting the tech industry are primarily in non-tech roles or isolated to larger tech companies. At Shopify, for example, layoffs largely impacted sales, recruiting, and support roles. Furthermore, according to Forbes, the demand for software engineering talent remains strong in small to mid-size businesses, where there is a continual struggle to attract and retain tech talent.
While the pressures of an economic downturn may force you to slow down your recruiting efforts, it doesn't mean you should stop altogether. Instead, use this time to assess the processes you have in place.
Actively search for inefficiencies in your processes and identify where strategic investment in the right talent could help you optimize your operations for the future.
Consider the key areas you can focus on improving while your hiring efforts are slower. For example, investment in developing a better candidate experience can increase your chances of winning top candidates for the roles you are hiring.
Ultimately, balancing temporary financial pressures with long-term thinking will help you come out on top when the economy recovers and more prominent competitors turn the tap back on.
3. Turn Uncertainty into opportunity
An economic slowdown presents the perfect opportunity for a growing business to analyze its competitors and capitalize on opportunities to get ahead. For example, consider whether you're missing any critical roles in areas that your competitors have covered.
According to data from Harvard Business Review, companies that flourished in previous times of economic uncertainty focused on operational improvements and much less on layoffs, outperforming competing organizations and coming out stronger when the economy improved.
Big tech companies have had a considerable number of layoffs as they try to balance sheets and cut costs. As a result, an influx of high-performing, experienced software engineering talent is coming online and available to startups to hire.
Furthermore, big tech is seen as less secure than it once was, and the perception is shifting that taking roles outside of the largest organizations is less risky than it once was. Now is the time to take advantage.
4. create smarter recruiting strategies
Recruiting talent during an economic downturn requires leaders to shift away from traditional recruiting strategies and focus on shaping the future workforce. As noted by HBR, even in tough economic times, adopting new technologies is a key factor in driving significant growth.
Strategically working with a tech recruiting partner like DevTalent, can help businesses improve their recruiting processes and help them find the candidates that best align with their organization-wide objectives and fulfill future skill needs.
For example, DevTalent has helped US-based companies strategically expand and tap into the tech talent pool in Canada to save on costs and improve time-to-hire, and has enabled teams already focused on Canada to expand into different provinces and secure top-tier talent for critical roles.
The right partner can be the ace in your back pocket as you look for candidates with the skills to adapt and push new technologies forward, helping your company come out on top.
Even in an economic downturn, companies that focus on strategic tech talent recruitment have the opportunity to accelerate growth and emerge stronger.
When times are challenging, it’s critical you focus on your long-term strategy so that you not only make the hires you currently need, but also ensure the right resources and processes are in place for success when the economy recovers.
Working with a recruitment partner that knows the tech market, like DevTalent, can help you navigate these turbulent times and ensure that you are strategic in identifying where your best investment opportunities lie.
DevTalent has recruited, developed, and retained teams for many US venture-backed startups based in New York, the Bay Area, and across North America. We are experts in fine-tuning engineering teams with the right mix of talent, processes, and tools to ensure optimal velocity, code quality, and long-term sustainability.
Get in touch to strategically scale your software engineering team with DevTalent.