The last few months have seen countless hiring freezes and layoffs from tech companies large and small. Meta & Twitter alone have laid off 15,000 employees between them, and many smaller tech companies have quietly downsized or stopped growing.
With an influx of people on the market now looking for jobs, you would think that recruitment would get easier for companies that are still hiring and continue to scale at pace. While there is some truth in this because of slack in the labour market, it’s not the full picture.
Hiring can actually get more difficult for fast-growing companies because people are less likely to change jobs when there is instability, as they look to prioritise job security.
Constant layoff headlines for tech companies does not just mean less competition, it reduces confidence in the tech ecosystem and makes it harder to attract talent.
What can you do to counteract this?
If your company is still hiring in the next year, you need to work hard to convince people your business offers a secure, stable place to work.
We sat down with Theo Margolius, Co-Founder of Otta, and Sean Hynan, Head of Talent at Form3, for their insights. Here's what they advised:
1. Explain why your business setup means you can be resilient whatever happens in the economy
Business leaders should not be scaling fast in this environment unless they have real confidence the business will not be impacted much by the negative economic cycle. If your business fits into that category, you need to project this confidence.
Being open with information is a good look during this environment. What’s your financial position? What’s unique about your company that will help you navigate this challenging period?
If you’re running an early-stage company, we’d suggest something along the lines of 'We've just raised £3m, and we’re budgeting for no/low revenue for the next 24 months and hiring accordingly, so all the headcount we’re committing to right now is secure for that period’
If you’re working at a late-stage company, we’d suggest being open about how much runway you have and even when you might next need to raise money.
2. Be open about your plans to navigate uncertainty over the next couple of years
Use your careers page, job descriptions and the way you speak to candidates to focus on your long-term plans, and not just “scaling”.
Recent years have been all about scaling – “we’re looking to grow by 500% this year”. In an uncertain market, focus on being honest about how secure your business is.
You need to focus on the longer-term ambitions of the business, whether that be funding roadmap, revenue generation (when you’ll break even) or growth plans.
You should also make sure you have prepared confident answers to difficult questions that will come up in the interview process. Expect questions from savvy candidates such as: ‘How much runway does the business have?’, ‘Have you done any layoffs?’, ‘What would make you consider layoffs?’, ‘What’s your plan for navigating the recession?’
3. Remind people why they should take the risk of joining you
There’s no getting around the fact that joining a fast-growing tech company in this environment holds more risk than working at a large, stable business like Deloitte or IBM.
However, there’s a reason people have flocked to the tech industry for good reason, and you need to work to remind them of that opportunity. As long as you can assure someone of job security for 18-24 months, they should still seriously consider taking the risk because the growth and learning they will experience are huge in comparison to joining a larger, more established business.
Similarly, people join fast-growth companies because they are often working on important missions that make a difference to the world. This is another angle to be shouting loudly about to prospective candidates to convince them to make the leap.
Tech hiring in 2023 is going to be tough for those scaling fast, and you need to adapt your hiring strategy to keep winning hires as the world adjusts. We hope that the above pointers help but above all else, it’s important to be truthful about your circumstances.
To recap, here are 3 things you can go and do today. There are different ways you can implement these from the way you write job descriptions, to the way you conduct interviews:
1. Clearly explain your current funding and runway position to give people confidence.
2. Be open about your plans to navigate the uncertainty and show people your business is making thoughtful decisions.
3. Remind people of the mission and the professional growth they can get from working at a fast-growth tech business.
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