Tech layoffs have been making the global news lately. Elon Musk’s highly publicised mass redundancies with nearly 50% of the global Twitter task force made redundant overnight; sent waves around the world. Joining the ranks of Twitter are Amazon, Apple, Salesforce, and most recently, Microsoft who also announced massive layoffs causing major panic across the board. The question remains whether this will trigger a domino effect in the market, and how companies should approach this situation. Despite the worrying numbers and uncertainty, the need for tech talent remains steady across all other sectors. It’s seen as an opportunity for recalibration, however, one that has promising opportunities for both businesses and talent.
Tech companies started a hiring spree at the height of the pandemic, estimating that the online business would continue to grow at least at the same rate. The market became even more competitive, creating a war for talent also referred to as the ‘The Great Resignation’. Tech companies had to offer excellent remuneration packages to attract new hires. However, in 2022, the internet boom started to fizzle, and face-to-face interactions slowly made a comeback.
More and more employees are returning to offices and people are spending more money on services than on goods. This led to tech companies seeing a drop in their revenue and suddenly employees’ salaries became too expensive. Cost-cutting pressure and rising inflation coupled with a looming recession and rising interest rates have forced tech companies to lay off huge numbers of employees or freeze recruitment towards the tail end of 2022.
There is no doubt that Tech layoffs could hurt industries that are dependent on technology and their employees. Almost every industry has a tech component they rely on, from retail to construction to hospitality. If companies can no longer provide services at the same level and use the same IT infrastructure, investors will be more cautious about investing. In addition, the entire business might be affected, which might lead to more tech layoffs or a hiring freeze.
However, there is a potential silver lining to the layoffs. The hiring freeze could create an opportunity for companies to revamp their hiring process and draft and implement suitable and attractive HR policies in line with the current trends and demand.
Midst the current tech disruption, the question remains as to what businesses can do. Mary Blake, Head of Talent Acquisition at Employsure commented, “Businesses that rely on tech should take this opportunity to consider insourcing their tech services. Employers should also closely review their existing remuneration packages on offer to potential candidates. This would mean that employers will need to have an invested interest in developing and fine-tuning their recruitment processes.”
“Employers should invest in their HR department. Providing superior training for HR employees could ensure better hiring practices allowing recruiters to seek and hire the best candidates per the business’s needs. HR departments play a crucial role in determining the attrition rate; therefore, it is highly important to train HR employees to observe what is causing a high or low attrition rate and propose measurable solutions.”
“Notwithstanding the above recommendations, a complete review of existing policies should be undertaken. More candidates are interested in knowing if a company has implemented policies that include diversity, equality, and inclusivity in addition to employee benefits and entitlements. There is a strong sense of gauging a company’s culture and values system and having strong HR policies means employers have every opportunity to recruit well.”