Layoffs Confuse Jobseekers as Companies Claim Tech Talents are Hard to Find

The need for skilled technology workers continues to grow in 2023, according to new data from CompTIA. Software developers, cybersecurity analysts, and data scientists are projected to see the most growth as foundational infrastructure roles like network engineering also expand.

Nearly a third of 2022 tech job postings require emerging technology skills. Tim Herbert of CompTIA’s was quoted as saying in a news report, “The data confirms how technology underpins business across the economy and the breadth of employers needing technical skills.”

This is a welcome development as some of the biggest tech companies in the world have eliminated tens of thousands of jobs as they reverse course after years of expanding. All told, tech companies have shed more than 200,000 jobs since the summer. But this was expected, as companies are what they call it now as “right-sizing,” as opposed to downsizing.

While right-sizing is purported to be the reason for the layoffs, it has left many tech talents confused. After all, layoffs rocked the technology industry in 2022, with US tech companies cutting over 97,000 jobs. That’s a 649% spike from the nearly 13,000 tech workers laid off in 2021, according to a report by Challenger, Gray & Christmas.

This wave of reductions represents the most significant contraction of the tech workforce since the 2008 financial crisis.

Several factors drive the layoffs that global mobility specialists have noticed. Rising interest rates and recession fears prompted cost-cutting at many tech companies that over-hired during the pandemic boom. Startups flush with venture capital have had to rein in unsustainable growth.

Slowing demand, especially in digital advertising, also impacted revenues. Meta cited the ad market slump for its large-scale job cuts. Twitter’s ad revenue fell sharply under new management

Meanwhile, productivity monitoring and return-to-office policies implemented by some tech firms like Google contributed to culture clashes, hurting retention and morale.

Shrinking talent pool

The tech talent pool has shrunk as well, with new computer science graduates down 6.7% in 2022 amid waning interest in the field. This exacerbated hiring challenges.

While demand persists for high-skilled roles like software developers, companies seem to be targeting middle managers, support staff, and recent hires first in the rightsizing efforts.

As the tech sector adjusts to slowing growth and narrower profit margins, experts expect job cuts to continue through 2023. But resilient tech giants with diverse revenue streams may recover and start expanding their workforces again when conditions improve, especially with AI (artificial intelligence) making Silicon Valley busy again with new AI companies leasing new offices in San Francisco.

Tech crossing industries

Despite all the gloom and doom, demand for tech talent has extended across industries. Mainstream sectors like retail, banking, and healthcare now compete for tech workers.

The professional, scientific, and technical services industry posted the most tech job openings in 2022 with over 35,000. Finance and insurance followed with nearly 25,000 postings, alongside 20,000 in manufacturing.

As technology transforms all economic sectors, technical skills become indispensable in every industry. Workers with adaptable expertise in areas like data analytics, automation, and cybersecurity are in high demand.

Companies must now recruit tech talent even for non-tech roles. Retailers need developers for e-commerce platforms. Banks require cybersecurity experts. And healthcare systems need data scientists to analyze patient information.

The tech workforce shift permeates across roles. Clinical nurses now track records digitally. Marketers rely on analytics. And customer support uses AI chatbots. Technical literacy is essential, even if not the core function.

With technology revolutionizing how every business operates, the need for tech skills continues accelerating. Workers in any field can benefit from cultivating adaptable technical capabilities to stay competitive in the modern digital economy.

Economists’ POV

Economists tracking employment levels have found those laid-off workers seem to have had little trouble finding new jobs.

Aaron Terrazas, chief economist with the job search site GlassDoor, was quoted as saying in an interview that “a lot of tech workers that were laid off early in the cycle have found new jobs relatively quickly.”

“The tech skill set, be it engineering or data science, is incredibly valuable, and so to some degree, we are seeing tech become a little bit less techie and traditional companies become a little bit more techie,” he said.

Anurag Rana, a senior technology analyst with Bloomberg Intelligence was also quoted as saying, “there’s a dire shortage of skilled tech workers in the market right now.”

Hiring process is long

Hiring qualified technical talent takes time, but an inefficient process can cause you to lose top candidates. Companies require multiple interviews, skills assessments, and executive approvals before extending job offers. This meticulous but lengthy process may cause talented candidates to accept competitor offers first.

According to a LinkedIn study, the average tech hiring process lasts 49 days. The slowest 10% of engineering hires take 82 days, while the fastest 10% are hired in just 16 days.

Ideally, tech hiring should not exceed 2-3 weeks. With an efficient, structured process, you can cut time and costs while still landing top talent.

The problem is most companies lack a comprehensive talent journey map. Global mobility managers need to coordinate with employers in terms of how to better optimize and accelerate the tech hiring process:

  • Define an ideal candidate profile based on must-have technical and soft skills. This narrows the search
  • Lean on networks and employee referrals to find “passive” candidates open to new roles. Cold outreach to proven talent is faster than sorting applications
  • Schedule interviews and assessments back-to-back over a 1-2 day period to minimize drop-offs
  • Set up speedy feedback loops and fast-track approvals from hiring managers and executives
  • Make competitive offers quickly, knowing top talent is interviewing elsewhere
  • Sell candidates throughout with consistent communication on company mission, growth, perks.

With an agile, candidate-centric process, hiring skilled technical professionals should be within weeks, not months, except when they’re coming from another country, of course. (Dennis Clemente)