San Francisco (CNN Business) For much of the last decade, technology companies have given their corporate employees a wealth of money and benefits to attract and retain talent that is a hyper-competitive industry. This dynamic has been overshadowed by a rise in pandemics-driven technology products and services over the past two years.
“Hiring … was off the lists, probably too high or out of range [salaries] to pay, where companies would hire four or five people when they really needed two for a sales position,” said founder Bill McHargue. San Francisco Talent House recruitment company.
But the situation has begun to cool as the technology industry and the broad economy are hit by the perfect storm of inflation, rising interest rates, fears of a recession and the Russian war in Ukraine. Netflix (NFLX) and many tech companies that were hiring up to Coinbase have announced layoffs in recent weeks. Many others are also moving to reduce costs, with the intention of slowing down or suspending hiring Uber (UBER), Lyft (LYFT), Snap (SNAP), Twitter (TWTR) and Apple (AAPL).
“They’re not going to hire so many people, they’re going to take a lot more responsibility, that interview process is going to be a lot longer, [pay] is going to be a little smoother,” McHargue said. , whose company works primarily with start-ups.
“I think it’s back to some realistic numbers,” he added, describing the current reduction as returning to previous pandemic levels. “I think the correction was going to happen, it had to happen. Now we don’t know how long it’s going to last.”
For some tech workers, this can lead to frying pans, not only because of the ease of securing high-paying work, but also because of the extent to which they take advantage of management to promote specific conditions in the workplace.
Highly experienced engineers from major technology companies may still dominate the job market, but the decline may serve to check the reality for those accustomed to getting what tech workers want, whether they have pre-pandemic office advantages or go against them. At the time of the pandemic, corporate bosses wanted and wanted the right to work wherever they wanted.
In the technology boom of the past decade, “employee competition created a set of Disney-style experiences / expectations in high-tech companies,” wrote Bill Gurley, a well-known Silicon Valley venture capitalist, an early Uber investor, in a recent Twitter thread. “For employees who have only known this world, the idea of reducing layoffs or costs (or asking them to come to the office) is a direct heresy,” he added.
Now, CEOs at some of the largest tech companies have begun to take a more rigorous approach, which means they need to be staffed or dispatched by employees, perhaps with the intention of encouraging layoffs through wear and tear.
“Realistically, there will probably be a bunch of people who shouldn’t be in the company here,” Meta CEO Mark Zuckerberg told staff last week during a question and answer session. “Part of my expectation is that by raising expectations and having more aggressive goals, and raising the heat a bit, I think some of you would decide that this place isn’t for you, and that’s self-selection. Agree with me.” Meta did not respond to CNN Business’s request for comment.
Tesla CEO Elon Musk also said last month — a few weeks before the layoffs were announced — that employees who don’t come to the office at least 40 hours a week should leave the company, away from the current policies of many tech companies. Including Twitter, which has agreed to take over.
But the growth of pandemic-driven worker activism and a willingness to defend workers ’interests (including their level of comfort in returning to an office) may not be so easy overnight, according to founder Y-Vonne Hutchinson. ReadySet is an inclusion consulting firm.
“The demand for technology and knowledge staff is still global, and there is still a shortage,” Hutchinson said. “So I think employees who don’t want to go back to that environment aren’t going to go.”
In fact, across the technology industry, the decline may have a better outcome for tech employees fighting for the right to work remotely, says Nicholas Bloom, a professor of economics at Stanford University whose research focuses on workplace management issues.
“For some industries, in the case of the bank, a recession will give management more strength to get employees back to the office. Technology seems to be going the other way,” Bloom said. “Right now most tech companies are giving employees roughly what they want, which is about two days a week in the office.”
But the move to remote work can be a double-edged sword for many American tech workers, especially in places like Silicon Valley, with the option for companies to use it to further reduce costs.
“When we get into a setback, tech companies will tighten their belts by reducing office space and moving to hiring cheaper workers outside big cities and abroad,” Bloom said, citing countries like India and Mexico as destinations for outsourced jobs.
Harley Lippman, CEO of technology company Genesis10, said a trend that is beginning to be seen is a greater tendency to hire contractors than permanent employees because of the flexibility it gives companies. “There’s still work to be done,” he said.
Whatever form it ultimately takes, it is clear that technology workers will need to make a significant correction of courses throughout their industry.
“We saw the candidates take offers and then they didn’t show up for the new company. That’s what happened,” McHargue said. “I don’t think we’ll see anything like that.”
