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It's no secret that qualified tech workers are in demand in the U.S. According to the industry organization CompTIA, the number of tech jobs is projected to grow by 3 percent this year, with gains across fields including software engineering, cybersecurity, and database management.
That's despite a slew of layoffs at big tech firms such as Meta, Amazon, and Google, which spent the past year and a half right-sizing after growing too fast and spending too much on payroll to lock down employees during the pandemic. Earlier this month, Spotify co-founder and CEO Daniel Ek said the company would lay off 17 percent of its workforce. "In 2020 and 2021, we took advantage of the opportunity presented by lower-cost capital and invested significantly in team expansion, content enhancement, marketing, and new verticals. However, we now find ourselves in a very different environment," Ek wrote in a letter explaining the layoffs.
Google CEO Sundar Pichai offered similar reasoning for laying off 12,000 employees in January. They're not alone: As of December 21, 1,169 tech companies had let go of 260,238 workers in 2023, according to Layoffs.FYI, a website that tracks industry layoffs.
For smaller tech firms and companies outside of the tech industry that are building out digital offerings or automating their processes, the layoffs have made it easier to recruit workers. "The number of candidates we get for every role is astounding," says Cory Klippsten, founder and CEO of Swan Bitcoin, a Calabasas, California-based platform for investing in Bitcoin.
But those days may be ending: Julia Pollak, ZipRecruiter's chief economist, is seeing a "gradual but broad recovery," as tech companies are rehiring for some of the engineer and developer roles that were shed in the past 18 months. She expects that trend to continue if interest rates come down and inflation continues to moderate.
"I think the tide is shifting back to the Big Tech companies," says Pollak, pointing to what she considers a "skinny bull market," where much of the growth in the stock market has been concentrated in a handful of large companies including Apple, Nvidia, and Meta.
No one predicts an immediate return to the talent wars of 2020 and 2021. But Pollak expects hiring to pick up at big tech firms by midyear if the current trends hold -- meaning now is a good time for other companies to fill key roles. Here's how to compete for in-demand workers.
Owners of small and medium-size businesses often say they struggle to match the salaries and benefits workers are used to at big tech companies, which often have compensation packages that include stock options. Compensation tends to be the number-one thing employees look for, says Pollak, and companies that can offer equity and demonstrate a viable path to acquisition or an IPO may be in a better position to attract workers.
Compelling benefits can make a difference, though. Pollak suggests researching the benefits that potential employees care most about, which may include paying for IVF or offering a program that helps with student loan repayment.
Tony Pietrocola, co-founder and president of the Cleveland-based cybersecurity company AgileBlue, says his company recently began offering paternity leave, something he'd never thought to offer before. In its first year, three new fathers have taken advantage of the benefit.
Robert Siegel, a Stanford Business School lecturer and venture investor, says some of his students prize working for a company that offers stability and job security. Others find they prefer to work where they're more likely to have an impact. "If you're one of 1,000 engineers working on a project at Amazon or Google, that's one thing, but if you're one of 10 to 15 engineers working on a project in hospitality or retail or food and beverage, you really can see the impact of your work much more quickly."
Pollak adds one way to quickly build goodwill with potential employees is to actively recruit them. "It's easy to reach out to people and say, 'Hey, we see your profile and you're a perfect fit.' People love being told that they're valued," says Pollak.
Flexibility and remote-friendly policies can be a helpful recruiting tool. Mike Belshe, co-founder and CEO of Palo Alto-based BitGo, says that while workers in BitGo's Sioux Falls and New York City offices have generally returned to the office at least part time, many of his company's Bay Area employees have moved away or no longer want to come into the office. Now, he's working on implementing a "follow the sun" model, with workers in Europe, the U.S., and India.
There's no getting around that demand for flexibility. According to a recent ZipRecruiter survey, 72 percent of companies that reduced remote work this year said they lost valuable employees and 63 percent said they lost out on job candidates.
Startups and newer companies often don't invest in training and developing their employees as technology evolves -- and that's a mistake, says Siegel. For instance, right now, helping employees learn to build or utilize AI tools builds loyalty and is also good for a company's bottom line.
In a recent survey of 906 business leaders, Seattle-based career app Resume Builder found that among companies that expect to do layoffs next year, 39 percent said the reason would be they expect to replace some workers with AI.
But Klippsten is skeptical that AI will kill more jobs than it creates, especially in the near term. "You may get faster at doing something that was easy," he says. "But you very quickly find that there are things that you have to do to be competitive and to grow faster than other people -- so then you need more engineers."
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