Given the infinite number of hits of layoffs – with deep cuts Airbnb and Uber Having captured most of the industry’s attention this week, it’s prudent to ask yourself: what happens to all the fired talents? How does a changing balance of supply and demand affect payment? Is an anybody is safe in this market?
Since these issues are now important for almost everyone everywhere, we turned to recruiters in one of the known industries – technology – to ask what they see and what, according to their forecasts, will happen over the next three to six months. It is not surprising that they told us that they saw a steep decline in job searches and a multitude of cuts in salaries, but they also say that in these turbulent times there are silver linings.
The bad news first, and at the moment it’s mostly bad news.
Sales and marketing positions – especially in consumer-oriented startups – have been hit hard and they won’t be back anytime soon, possibly even in 2020. Carolyn Betts, Founder, National Recruiting Firm Betts Recruiting, says that “when there were notifications of coronavirus and shelter in place, we saw that 80% of our business was frozen. And then everything went from there.
The initial Betts recruiting company, which is responsible for sales, marketing, and human resources, was forced to lay off its own businesses because of a lost business, laying off 30 percent of its staff and cutting salaries for the remaining employees by 20 percent, although Betts says PPP loan allowed the company to adjust the payment upward by another 10%.
At the same time, she had the front row to an almost instantaneous transition from the workers’ market, where increasing salaries and subscription bonuses became commonplace, to a market oriented to employers, where candidates get what they get. “There are so many talents on the market that there are reserve candidates for reserve candidates.” Indeed, her advice to job applicants right now is to acknowledge that the game has changed and that, if nudged, the hiring company can “just move on to the next candidate.” Everyone is going to hire within their budget right now, and they are not going to make exceptions for the most part. ”
The search for leaders, as expected, is now largely frozen. This is what Teri McFadden, vice president of recruitment at venture capital firm Norwest Venture Partners, says, where for nearly 12 years she helped portfolio companies to occupy key positions.
Before COVID-19 hit the United States, the firm focused on “about 160 open searches at an active executive level in our portfolio – clearly more than my Norwest team could handle,” says McFadden. (Like most venture capital firms, Norwest sometimes retains external search companies.) Now this number has more than halved. Some, she said, are “completely canceled,” while “others simply pause the search to see what happens in the next couple of quarters.”
At the same time, some roles have been hit harder than others, says McFadden, who specifically quotes marketing groups. She also notes that the pay of executives in companies most affected by coronavirus is declining. This is an observation that the public saw in company announcement after company announcement in recent weeks. In general, she said, C-suite executives receive a 20 percent reduction in wages, while at the next level of management, wage reductions are 10%, and “anyone below a certain level of wages” does not see a reduction in wages . But that varies from company to company.
Even engineers in today’s climate are not sparing, says Sam Wally, a longtime partner in Riviera Partners, a Silicon Valley recruiting company that specializes in leadership in engineering, manufacturing and design. While new jobs are paying roughly the same as they did two months ago, both Wally and McFadden expect the market to soften in the coming months and drop wages by 10–20 percent. (Wally says paying for engineers was the same trend even before the virus sent everyone to cover.)
The big problem is the simple supply and demand. For the first time in more than a decade, the supply of engineering talent can exceed the need for it – or at least the ability to pay for it. When asked, for example, whether young companies that continue to receive funding can absorb engineers laid off by large companies, Wally says that “unfortunately, I don’t think so and don’t think it will be for some time. While new companies are constantly being created, he continues: “It can be up to a year to find the right match.” It could also mean “a look from a different industry or, possibly, from a different geography than they looked” in the past.
But wait! As promised, the news is not all scary.
Since most of the technology sector holds up better than anywhere else, some self-employed movement in front. For her part, Betts says she is starting to see how companies are “raising the level” of their teams, which means breaking up with “low scores and replacing them with talent that has entered the market.” This is especially true for industries that “sell to the government, in the security industry, and sell collaboration and healthcare software,” she notes.
Betts also notes that some clients in places like Texas, where people return to public places, “open up” and begin to strategize as to who they want to hire or re-hire.
“Many people have received some relief regarding their growth plans,” Betts says, “but this is May. When everything is back [to a more normal state of affairs], [management teams] they are expected to put their foot on the gas to make up for lost time, and no one wants to be taken by surprise. If you start hiring when everyone says “go,” you missed your start. ”
McFadden and Wally repeat this idea: Wally says that “strong hands continue to hire,” and McFadden suggests separately that Norwest sees two categories of companies that are “willing to work well in the long run,” including young startups focused on product development (and for those who are currently finding even greater demand for their products, for example, software designed specifically for remote teams and even for hair dye manufacturing companies.
Although this is still a relatively small pool of potential employers, “I think in general,” says McFadden, “companies are starting to think about how life looks after COVID-19, and it’s not all dark and gloomy.”