The Fight for Tech Talent Isn’t Over—How To Pivot Your Hiring Pitch for the Market
August 4, 2022
It feels like every other day there’s a new headline about another tech company’s round of layoffs or hiring freeze. The hiring market was hot coming into 2022—but this shift to uncertainty and austerity for businesses across the tech world is quite sudden.
The good news is that the trends we’re seeing in hiring aren’t all-encompassing. While some companies are freezing all recruitment activities, others can’t get enough qualified candidates through the door.
Companies are using capital to expand
Early-stage private tech companies that are just coming off a series A or B are busy putting their capital to work. They can’t sit on it and wait for better market conditions—they need to expand. As expansion stage investors monitoring our new investments here at OpenView, we know it’s really business as usual.
On the other hand, companies that aren’t as fresh off a round of investment may still have capital to utilize. However, they’re being more strategic and deliberate around which hires they’re making and when.
Just a few months ago, companies were getting massive rounds of funding and huge valuations. The general theme of hiring was to step on the gas across all functions just to keep up with the pace.
Today, things have slowed down, forcing companies to be more cautious about their spending. The easiest way to do that is through headcount planning, and it’s all about identifying the top priority roles to fill first.
Which roles are impacted most by market changes?
As many companies slow down recruitment efforts, reset expectations around hiring plans, and maybe even reduce headcount, it’s no secret that some roles are more immune from these market changes than others. There’s always a need for engineers and product professionals. Additionally, revenue-generating roles like go-to-market teams tend to remain prioritized in all markets.
It’s worth remembering that the roles a company prioritizes depends on their growth stage.
Oftentimes, the same roles that are important in the early stages get deprioritized as the business matures.
Recruiting and people operations roles are the perfect example. Earlier stage businesses want to get their hands on a great head of people to help them actively grow. But later stage companies who are slowing down or eliminating recruitment efforts may cut down their recruitment team and turn to outside agencies for hiring support.
As the workload of recruiting and people teams simmer down, one good way to make use of their time without letting them go is to offer a temporary shift to a revenue-driving role like sales.
There are many parallels between the recruitment and sales roles, and so people who succeed at one can be naturally successful in the other.
How companies can pivot their hiring pitch
A few months ago, companies would try to attract top talent by advertising their recent fundraising, valuation, and rapidly increasing headcount. Given the current economic landscape, candidates are more risk-averse—which is not surprising. They want to know that a prospective employer’s funding, valuation, and growth plan is sustainable more than anything.
In addition to everything they were looking for before, candidates are also keeping a close eye on financials.
For companies looking to hire, this means financial stability needs to be front and center of their pitch. Let candidates dig deeper and see those financials themselves. If they’re a promising candidate, help them understand the forecasting and planning that the business has done to weather a down market. Be prepared to answer questions like:
- What is your cash flow?
- What is your runway?
- When will you seek another round of capital funding? What’s the likelihood of that funding being a down or flat round?
- Are you working with the leadership team/board on re-forecasting budget and revenue goals?
Valuations have seen a lot of fluctuation. In the past, series A and B were based on projected revenue growth. Unfortunately, these projection models have become more volatile, and likewise, capital raise timelines also become less predictable.
This means that for executive candidates looking at earlier stage employers, there’s a hyper-focus on runways. They want to know that if they step into a role, they’ll have the funding they need to execute on the plans they’ve been discussing in the interview process—and if that runway will be long enough to bridge to the next round.
Our advice for companies and candidates
For companies looking to hire competitive candidates, we have two suggestions.
- Lead with empathy. While your company may be in an advantageous position, many people are going through unemployment, job uncertainty, and are also under tremendous stress. Just being kind to candidates throughout the process is huge, and will ultimately help you win talent.
- Have materials on hand to share with candidates. The candidate diligence process has increased significantly. Put your best foot forward. Consider building a candidate sell-deck that proactively addresses all the questions they may have about your mission, vision, growth, and culture.
This is a strategic way to keep people engaged, get them excited, and sell your role as the perfect opportunity.
Candidates: Ask about financials and runway
Our advice for candidates is simple when it comes to a prospective company’s longevity. Don’t forget that you are also interviewing the company. Assess whether you feel confident in the business’s plan moving forward. Ask tough questions like what adjustments the businesses need to make to stay on the right path and hit their plan.
The future of hiring in tech
There really is no minimizing the stress and uncertainty felt by high-quality employees who were recently let go. The silver lining is that it’s not all layoffs. There are more opportunities out there than people realize. And plenty of tech companies are actively hiring, so we don’t believe that the talent impacted by recent layoffs will be sitting around for too long.
The eternal struggle for talent has always been a supply-side issue. There’s just not enough tech talent and there are still many companies competing for it. The market still needs to balance out. With candidates more risk-averse than ever before, employers have to prioritize hiring and step up to attract the best people.