This year has been a tumultuous one for the technology industry and the economy as a whole.
5 Hiring Tips for 2023
- Understand your needs before launching a search.
- Use your networks to find top candidates.
- Keep recruiting for key leadership roles.
- Create pipelines to develop internal talent.
- Upgrade your teams.
As companies strive to balance their investment in the business, revenue growth and development of their workforce while also managing cash flow to extend runway, it can be difficult to determine how best to structure your team and which hires are the most essential to make.
3 Significant Job Market Shifts
So far we’ve observed three significant shifts in the job market.
Demand for talent focused on driving ROI. This focus on ROI is driving demand for hires like chief revenue officers and chief operating officers. Conversely, we are seeing companies using lower-level employees as functional heads for non-revenue-generating areas to achieve better value for their money.
For example, instead of hiring a chief people officer, some companies may promote an internal mid-level person or hire a head of/vice president level candidate to report directly to the CEO/founder. This shift is interesting because it was only a year ago when companies needed strategic thought partners in the people function. We’ll have to wait to see the long-term implications.
Stricter return-to-office policies. Based on conversations with our chief people officer network, companies are now stricter on location requirements for employees and new hires. They want their employees to be able to come into the office, even if it is only a few days per week.
Companies hold the power. The power has dramatically shifted from employees to employers. It’s a buyer’s market; just look at some of the job postings on professional social media sites. Some of them have thousands of applicants, which in turn can be quite overwhelming for the recruiting team. Companies have more power than candidates at this moment and are being more selective about who they bring on.
Hiring Advice for Companies
Cash is king for companies right now, so taking a strategic and thoughtful approach to hiring is essential. Because budgets are tighter, every hire matters, particularly at the executive level. The five key things we’ve advised companies on and can share with you are:
Be clear about your needs. Before you start your search, think about the business problem you are trying to solve by bringing this person in. What skills and experience are essential? What are your priorities for the role? Once you have a clear understanding of your needs, you can start to narrow down your search.
Use your network. If you have limited resources and funds for bringing on a hire, don’t be afraid to reach out to your network. Good people know good people. Talk to your friends, family and colleagues to see if they know anyone who would be a good fit for the role. That said, it’s still important to run them through a formal interview process and the vetting should be as rigorous, if not more, than with an externally sourced candidate.
Continue to recruit critical leadership hires. Despite the crucial necessity for key hires, companies are delaying recruitment efforts amid the present economic uncertainty. This exacerbates an already challenging situation, as each day a leadership position remains unfilled can significantly harm the business’s performance. Furthermore, the time spent searching for the right candidate, combined with the candidate’s notice period, can accumulate rapidly.
Upgrade your team. In the past, companies were reluctant to let go of underperforming employees due to the tight labor market. Now is the time to upgrade your team by replacing mediocre performers with top talent. Many talented executives at tech unicorns and Big Tech companies are looking for new opportunities. These executives may be willing to leave their current jobs because there is less upside for them to stay.
Develop internal talent. If a leader departs and the organization operates smoothly without any pressing need for an experienced replacement, consider promoting from within. Rewarding and developing your up-and-coming internal talent will help you retain your top talent and create a pipeline of future leaders. Giving your more junior employees bigger challenges, more responsibilities and leadership opportunities will help them develop the skills they need to run the future business.
2 Challenges and How to Face Them
Hiring with fewer resources is one of the biggest challenges facing companies today. Many companies have had to make significant cuts to their recruiting operations. For example, we’ve seen some tech companies go from fifteen recruiters to just one. One person can only do so much.
Another challenge is the sheer volume of candidates and resumes for some roles. It can be difficult for companies to sift through the volume to find the best candidates. The market has definitely shifted in recent years, and it now feels similar to the early 2000s or 2008, when it was a buyer’s market with too many candidates to look through. Here’s our advice for companies facing these challenges:
Get the right hire in the door. Mis-hires can be costly, so it’s important to slow down and make sure you’re running the right recruiting process to get the right person in.
Use advisors or executive coaches. The goal is to help the business stretch its current leadership bench to do more and grow further with the business than what was expected in the past. In the past, companies grew their engineering team from 20 to 75 people in a short span to match revenue goals.
Now, companies in a similar stage are growing from 20 to 30 engineers vs. 70 in that same period. Because of that, they aren’t yet necessarily in need of a new CTO, but their sitting founder/CTO may need a good executive coach or advisor to help them grow their management abilities to manage their large organization.
How to Handle Questions About Layoffs
In the current environment, rife with layoffs, candidates are bound to ask questions about your company’s stability. Here’s how to handle them.
Understand why they’re asking. Candidates want to ensure that the company’s financials are stable, the executive team is capable and the organization isn’t headed for another round of layoffs.
Have a solid response. A compelling message could be something like, “Our company is investing in bringing on strategic hires/candidates like you, while our competitors are cutting resources and budgets. Yes, we’re optimizing our teams, but also using this as an opportunity to curate a team of A players.”
Use tech to fill the gap. Many AI-powered technologies and solutions can help companies with recruiting. These technologies can enable screen candidates, assess their skills and make better hiring decisions. However, AI technology is a tool in your toolkit, not a replacement for recruiting efforts. You’ll still need a human, personalized engagement approach to attract the best candidates. Additionally, there can be inherent bias in AI tools as humans choose the data that algorithms use.
If your internal recruiting team is feeling stretched, allow them to use technology to ease some of that heavy workload. This will yield better recruiting results and lead to improved team morale and retention.