As we turned into 2023, I was hopeful with a new sense of optimism that a lot of the downturn that was experienced in 2022 was over. It didn't take long for that optimism to flip upside down. For the tech industry, large companies like Alphabet (Google), Microsoft, Salesforce, and others have announced major cuts. The same goes for lots of venture backed startups too.
I've personally seen multiple economic cycles throughout my career (Dot-Com 2001, Financial Crash 2008, Pandemic 2020) and it is true - what comes up, must come down and the correction in the tech industry was due.
However, I tend to be an optimistic person and I'm hoping that the layoffs and cuts we are seeing will flatten out after Q1. The good news is that according to Gartner, tech spending is actually increasing. I don't know if I'll be right, but sometimes when companies cut back too deep, they end up having to resume hiring and growing the team again to meet the needs of the business. Time will tell and these are just my thoughts.
As we look across the job market for 2023, I wanted to get feedback from a broader audience, so we ran a poll on LinkedIn to get a general sense of the vibe out there from the VentureFizz audience. We had over 350 people respond and the response that had the most votes was: Layoffs end but hiring is flat.
In addition to getting feedback from the VentureFizz audience, we also wanted to hear from the people who have a day-to-day pulse on the market and that's the Talent Acquisition & HR leaders in the tech industry. Below is a list of their predictions about this year.
Please note, the views and predictions expressed in this blog post are representative of the individual's thoughts and opinions. They are not representative of the individual's employer.
Jaclyn Jussif
VP of People at Paperless Parts
I foresee hiring trends flattening out and a shift to employers focusing more on retention, career pathing and learning and development initiatives. With hiring slowing, HR teams will have more time to develop the top talent they brought in over the hiring pushes in 2021 and 2022. I also think companies will need to be strategic about the size of their recruiting teams - eg don't let them all go - you’ll need them again and it takes time to train them on hiring top talent.
Kristin Zwickau
VP, Talent Attraction at Veeva Systems
With new philosophies about remote work or work anywhere comes a more diverse workforce for the future. Companies are able to tap talent pools they have not been able to in the past, and this is not just for entry-level positions, but all levels and disciplines.
Gary Cunningham
CPO at Flywire
One of the key themes that we expect to see this year is a greater focus on internal mobility. At Flywire, we’ve formalized our own internal mobility program - One Flywire - that enables our FlyMates to take on new roles and responsibilities, while still growing their careers here. Placing a priority on upskilling and reskilling can be an incredibly effective way to not only fill critical business needs, but also to empower employees to build their careers of a lifetime.
Mary Paris
Director of Talent Acquisition at PERSUIT
In 2023, we'll continue to see a somewhat tumultuous hiring market; however, many companies will continue to hire and grow their teams. We'll likely see more conservative hiring plans, with resourcing more directly tied to key priorities of the organization. I believe we'll also see candidates become more risk averse to making a move, therefore 2023 will be an important year to focus on branding efforts and strong recruitment processes to really showcase your company culture and open opportunities. A compelling employee value proposition along with a strong interview process will win the best talent during this uncertain time in the market.
Erin Murphree
Manager Talent Acquisition at NuvoAir
Over the past 3 years, everyone's world has been turned upside down and had more twists and turns than ever anticipated. Moving forward, looking at 2023, companies are going to have a hard time retaining talent, unless they offer what people need/want. Money is a BIG part of working but if companies do not support their employees with their career development, upskilling, flexible work life, their P.O.V., then they will leave faster than they started. People want to be heard and supported and be comfortable and confident to be their authentic self. Money is a very important factor but feeling valued and appreciated goes a long way.
Annie Edwards
Chief People Officer at Bamboo Health
I suspect we will see more layoffs from tech companies in the 1st and early part of the second quarter, and then a flattening. I do not expect to see a rebound as it pertains to additional headcount, but hiring will continue to be quite active to keep up with turnover.
Hallory Haley
Director, Technology Talent Acquisition at Liberty Mutual Insurance
Every company is a technology company in 2023 and the need for technology talent will remain strong. As the year continues, the tech layoff trend will likely slow and hiring will continue to focus on high-demand roles like Software Engineers. We’ll also see organizations look for skill-based candidates with experience in areas like Data Science and Cybersecurity as well as an ability to code in multiple languages such as Java, JavaScript, and others.
Ilenia Herrera Lutz
Director of Talent Acquisition at Duck Creek
In 2022, many organizations took time to re-strategize, and since, they have focused on aligning their staff in skill areas to support their strategic growth plans. In 2023, it is important for companies and employees to stay sharp and invest in building skills in growth areas like data engineering, cloud, security, user experience/user interface (UX/UI), customer success and product. The need for roles in these areas has not slowed down and remains consistent across industries.
Jeanne Cordisco
Chief People Officer at O’Reilly
The recent rounds of traffic layoffs may lead to a long awaited “correction” in the market by smaller organizations who could not compete with the salary inflation that the Big Tech players were able to pay. The influx of 25,000+ former Big Tech employees will hopefully benefit the smaller players in the market who are very much actively hiring and searching for top-talent. Certain roles, like software developers and engineers, will always remain competitive but the expectation is that there will be a larger talent pool for companies to hire from in 2023.
Jason Kan
COO at Virtual Internships
The most proactive startups will undergo workforce planning ASAP as a response to the economic downturn, mapping out scenarios for worst case, middle case, best case scenarios with Talent Acquisition/People Ops leading the necessary strategy & execution.
Nicola Porter-Smith
VP of HR at JOOR
As a global company, JOOR was, like many others in the SaaS space, impacted by the unexpected macroeconomic challenges 2022 presented. We predict that news of layoffs and scaling back across the tech landscape will likely continue in Q1-Q2 of 2023. The news isn’t all bleak, however, as the nature of the current market has afforded JOOR the opportunity to be more intentional and strategic with our hiring efforts for 2023. With budgets scaled back, our focus on the Talent team is ensuring our hiring process is not only effective at bringing in the absolute best talent for the roles currently open, but effective as well at providing our candidates a positive candidate experience. We predict that folks looking to make a move in 2023 will be paying particular attention to their interviewing experience this year. Bolstering our Recruiting Operations function will also ensure we have the data on hand to validate our decision-making in the year to come. While it may not be full speed ahead for 2023, JOOR predicts that challenging times afford Talent teams the opportunity to look internally for the best means to forge ahead.
Kate Morgan
Founder & CEO at Boston Human Capital Partners
EBITDA drove 2022 Q4 and the easiest way to become more profitable is to "trim the fat" on your biggest line item on a P&L, which is human capital. Big Tech is going to continue to focus on this and will postpone innovation reducing their hiring needs. This will allow for early-stage companies to push forward. Starting in 2024, we will see a wave of acquisitions of these startups.
Keith Cline is the Founder of VentureFizz. Follow him on Twitter: @kcline6.