As if the past few years have not been challenging enough, many of the world’s largest economies are now facing unprecedented inflationary pressure. This is compounded with record-high employment in the United States, creating a strange combination that’s never been seen on a sustained basis.
For tech leaders, this adds further uncertainty to an already challenging hiring and talent retention environment. As the large tech companies boomed and remote work spread, companies of all sizes competed for talent, with large tech firms willing to shower candidates with lucrative stock options and benefits.
More recently, however, these same companies have been scaling back hiring plans and, in some cases, reducing staff. Concerns about economic conditions and a flagging tech stock market have slowed the tech hiring frenzy. While demand remains high, it appears to be rationalizing. For tech leaders navigating these changes, several strategies may attract previously unattainable talent to your organization.
Stability Versus Stock
One could be forgiven for believing the mantra “stocks only go up.” That seems to have been true until this year, particularly for tech stocks. However, the tech-heavy NASDAQ has suffered an over 20% decline in 2022, which, combined with annual inflation nearing 10%, has taken a bite out of stock-rich compensation plans.
Every uncertainty presents an opportunity for some organizations, and current tech market conditions are no exception. If your company struggled to acquire talent 6 months ago and abandoned the effort, it might be a good time to reopen your search.
Whereas several months ago, job candidates might have scoffed at your company’s lack of stock options or turned their noses up at a “boring” cash-based compensation plan, stability suddenly has become attractive again.
Stability in compensation can be made even more attractive when combined with more stable working conditions. Many large tech organizations continue to careen between remote work and in-office work. A predictable remote working policy or even a network of regional offices that allow employees to work outside the urban tech centers can be used as a key selling point that others cannot match.
You may also be able to offer potential employees more interesting challenges than the large tech companies. Helping solve a complex global supply chain problem might hold more appeal than building yet another streaming service or marketing-driven social app.
Consider “Unconventional” Staffing
If financial uncertainty has affected your business and constrained hiring, consider alternatives outside standard hiring to address any gaps. An obvious approach to outside staffing is hiring a staffing agency to provide technical expertise on a time and materials basis.
This arrangement allows you to acquire technical expertise without making a long-term commitment. There are also contract-to-hire agreements, whereby you can get an experienced individual quickly onboarded to your team. Rather than extensive job interviews or recruiting, this allows you to “try before you buy” and test technical competence and whether the individual fits within your organizational culture.
The key to a time- and materials-style relationship is ensuring that you have an endgame in mind. Hiring a significant number of people on time and materials can become expensive, especially if the skills they were hired for lose relevance or a project completes.
Another alternative is engaging outside capacity in a specific area versus individuals. Companies like BairesDev can provide both individuals and management oversight and supporting infrastructure to make the team successful.
For example, if you need to build a one-off mobile application, you could hire the half-dozen skill sets required to create an app and then attempt to redeploy them once the work is done. Or, you could source individuals and pay them on a time and materials basis, taking on the management oversight and integration between resources. Both of these scenarios require a fair amount of complexity and leadership.
Contrast that with “renting” a capability. You might engage a company to provide app development services and pay a recurring fee. The provider could scale various resources up or down as needed, for example, using multiple frontend designers early in the app development process and transitioning to more developers as the life cycle goes on. This should largely be seamless to the company engaging the services and, depending on the contract, have little or no cost impact on the overall service.
Engaging a partner in this capacity should also include management and tools. Again using our mobile app development example, the provider should have their own development methodology, repositories, and documentation standards. Much as corporate IT departments often take requests from other business units and then manage the execution, reporting, and delivery with minimal oversight, a capacity-based vendor should act like an extension of your organization without having to manage the day-to-day details.
Providers of these services are likely equally concerned with macroeconomic trends, which may be a negotiating lever for longer-term relationships. Identifying and engaging with capacity-based providers early allows you to establish a relationship and set any pricing or legal requirements in place so you can quickly ramp capacity up or down as needed without the challenges associated with traditional hiring or temporary staffing.
Watch for Discounts
Whether it’s athleisure wear that’s now overstocked or tech talent with a skill set in declining demand, it pays to watch the talent market for trends and opportunities. Periodically check to ensure your HR colleagues understand what skill sets to monitor, and assess your portfolio of partners for potential gaps that can be addressed.
Uncertainty can create opportunity amid difficulty, and savvy tech leaders may be able to snag a “deal” on high-quality talent, whether added to the payroll or engaged through a capability-driven relationship.