State of the Market: Q1 2023

The last time we wrote about the State of the Market was July 2022, and we were at the midpoint of a crazy year. In addition to the normal ebbs and flows of the market, in the last six months, a lot has changed within the tech industry. 

To get caught up, here is our State of the Market Recruiting Report for Q1 2023:

First, the bad news…

This won’t be a shock as we seem to be constantly inundated with it… the bad news is still the news, and there's plenty of it. Downsizings across all functions and the rise of bankruptcies continue to make headlines across tech companies and DTC e-commerce brands. 

Look at any list of the people impacted by downsizing, and you'll quickly notice large numbers of Talent Acquisition teams. It's hard not to read into that and assume not much rapid scaling is happening in 2023.

But there is good news…

Adam Schoenfeld, Founder/CEO of Keyplay and PeerSignal, a tech industry thought leader, recently shared his data-based perspective that right now it is all about startups! The tech market is not only alive, but parts of it are thriving. 

The other market chatter we're hearing…

Camels vs. Unicorns

Rapid growth, rapid crumble; we are seeing it in the market today with some of Silicon Valley's biggest unicorns. This is causing Founders to take a new approach to growth that is rapidly gaining traction: camels

Startup 'camels' prioritize sustainability by balancing growth with cash flow. This is not a growth-at-all-costs model. Instead, startups focus on more sustainable growth by managing costs and only raising the money needed to hit the next marker in growth. 

In theory, this slower, more sustainable approach should be able to withstand weaker bear markets and, if more widely adopted, should also result in less explosive hiring and downsizing within tech.

The Return to Office

Roughly 65% of the employers we speak with are instituting some sort of return to the office, whether full-time or hybrid. Many are shifting to a hybrid model with at least a few days per week in-office. This return to office is more prevalent for "build" focused roles (Product, Design, and Engineering) within tech teams.  

Since 2020, our hiring requirements have shifted from in-office only to remote digital-first, but now we are seeing hybrid. Most employers are looking for candidates who are both local enough and willing to commit to being "in-office" a few days per week. While some are not mandating this, it is the most preferred.

We have seen some candidate resistance, but in this market, employers perceive themselves to be in the driver's seat, so this back-to-work trend is projected to continue.

Senior-level / Strategic Hiring

Business leaders who are hiring senior-level talent are telling us that hiring is being limited to only the most critical roles tied to key business objectives. 

Specificity of experience is ranked high, whereas "hiring for potential" is not likely to happen. The recency bias, aka what have you done lately that is relevant to what we need now, remains one of the key hiring markers.

Despite all the news about downsizing, employers are still willing to be flexible and pay for talent if they feel the hire will get the job done and deliver mission-critical outcomes.

Business Leaders Turned TAs

For those hiring, it will not be surprising that more applicants are applying to online postings. However, most will not be relevant to the job criteria.

The talent acquisition team leaders used to rely on are no longer employed, or they have been reduced in number and given direction to focus only on a specific subset of hires. 

Many leaders may now find themselves in a position where:

  • Their small network is tapped out of available and qualified talent.
  • The job postings on community sites are not getting those with relevant experience.
  • The leaders themselves are now the ones combing the ATS to scan and review online applicants.

Most leaders will dread this but without an adequate Talent Acquisition team, we will see more leaders forced to wear recruitment hats in order to build their lean, but efficient teams.  

While hiring as a whole has slowed down in January, we predict it will pick up again in February and March as businesses take a more cautious approach to scaling their teams and only hiring for specific roles that will push key growth objectives forward.

2023 is not all doom and gloom! If you’re looking to hire that strategic Product, Design, or Engineering leader and find yourself and your TA team at max bandwidth, we can help!