“The hiring … was off the charts, paying [salaries] that were probably too high or out of range, where companies would hire four or five people for a sales position when they really only needed two, “said Bill McHargue, founder of San Francisco-based recruitment firm Talent House.
“They’re not going to hire as many people, they’re going to do much more due diligence, that interview process is going to take a lot longer, the [compensation] is going to get a little bit softer, “said McHargue, whose firm mainly works with early-stage startups.
“I think it’s back to some realistic numbers,” he added, describing the current reduction as returning to pre-pandemic levels. “I think the correction was going to happen, it had to happen, now we just do not know how long it’s going to last.”
For some tech workers, that could mean whiplash – not just in how easily they can secure a high-paying job, but also in how much leverage they have with management in pushing for specific workplace conditions.
Experienced senior engineers at major tech companies may still have an upper hand in the job market, but the downturn may serve up a reality check for tech employees used to getting what they want, whether it was office perks pre-pandemic or going up against their corporate overlords during the pandemic for the right to work however and wherever they wanted.
Now, billionaire CEOs of some of tech’s biggest companies are starting to adopt a sterner approach, implying that employees must either shape up or ship out – possibly with the intention of encouraging layoffs by attrition.
But the growth in worker activism spurred by the pandemic and the willingness of employees to advocate for their interests – including their comfort level with being back in an office – may not be that easy to reverse overnight, according to Y-Vonne Hutchinson, founder of inclusion consultancy firm ReadySet.
“The demand for tech and knowledge workers is still global, and there’s still a shortfall,” Hutchinson said. “So I think that workers that do not want to go back into that environment aren’t going to.”
In fact, across the tech industry, the downturn may produce a more favorable outcome for tech employees fighting for the right to work remotely, according to Nicholas Bloom, a professor of economics at Stanford University whose research focuses on workplace management issues.
“For some industries, like banking, a recession will give management more leverage to force employees back to the office. Tech seems to be going the other way,” Bloom said. “Right now most tech firms are giving employees roughly what they want, which is about two days a week in the office.”
But the move towards remote work could end up being a double-edged sword for many American tech employees, particularly in places like Silicon Valley, with the possibility of companies using it to cut costs further.
“As we enter a recession tech firms will tighten belts by cutting back on office space and moving to hire cheaper workers outside big cities and abroad,” Bloom said, mentioning countries such as India and Mexico as destinations for outsourced jobs.
Harley Lippman, CEO of technology staffing firm Genesis10, said one trend that he sees starting to emerge is a greater tendency to hire contractors rather than permanent employees because of the flexibility it provides companies. “Work still has to get done,” he said.
Whatever form it ultimately takes, it’s clear that tech employees will have to brace for a significant course correction across their industry.
“We saw candidates take offers and then not show up at the new company. Like, that happened,” said McHargue. “I do not think we’re going to see that sort of thing.”