Many of the news stories around layoffs and hiring freezes are impacting some of the largest tech giants. In October, Twitter announced 50% of their workforce was cut at the very end of the month, and Meta and Apply announced layoffs in November. But the reality of tech hiring is more complicated than what news outlets are highlighting.
“Information (the BLS category) added a modest 4,000 new jobs in October, despite all the news of layoffs. Professional and Business Services (which can also contain tech jobs) added a solid 39,000 new jobs. Overall, the tech sector is a mixed bag.”
While several large tech giants are remaining cautious for the next year, many companies are continuing to expand their workforce in both traditional and non-traditional ways. We found that high-growth tech companies are still increasing their headcount.
A closer look at high-growth tech companies
Aptitude Research found that one in two tech companies identify as a high-growth company and most of these companies are tech companies. High-growth companies include any organization that is performing better, or expected to perform better, than its industry or the market as a whole. These high-growth companies face unique challenges and opportunities when attracting, engaging, and retaining talent. We found that companies have several business priorities that influence high-growth today, including an increase in headcount, global expansion, new market opportunities, and mergers and acquisitions (see Figure 1).
According to this study, these companies are two times more likely to increase the number of hires this year. Talent is the most important factor in the success. It impacts all other priorities including their ability to expand globally, enter new markets, and achieve a successful exit. Unfortunately, for many of these companies, the pressure to move quickly makes recruiting and retaining talent a challenge, especially in a labor shortage.
Trends influencing tech hiring today
As the tech market becomes increasingly more complex and confusing, we identified a few trends influencing tech hiring today:
Invest in more automation
Companies that want to hire the best tech talent cannot afford to rely on legacy systems and technology. World-class technology is the differentiator and helps tech companies compete for talent. Yet not all tech companies are making the right investments. 62% of tech companies state that their recruitment activities are too administrative and only 1 in 2 of these companies are looking outside of their ATS for better options. Tech talent expects solutions that offer a simple and dynamic experience.
Focus on internal mobility
Companies must carefully consider the culture around career development, ensure employees have fair and equitable opportunities, and communicate feedback consistently. For tech companies, careful planning and preparation around internal mobility is a critical part of a talent acquisition strategy. It requires companies to shift how they think about talent and prioritize the individual. Currently, 73% of tech companies are developing a strategy to support internal mobility.
Focus on speed
It is the common characteristic between all high-growth companies, regardless of their priorities. Companies want to see results, and business success is measured by its ability to adjust to change. As a result, HR and talent acquisition leaders face pressure to adopt new strategies and technology overnight. While this focus on speed has created opportunities, it has also presented challenges with attracting, engaging, and retaining talent. High-growth companies must carefully balance the focus on speed with their focus on talent.
Embrace the contingent workforce
According to Aptitude Research, 82% of tech companies are using contingent or freelance workers and 1 in 2 companies plan to increase their use of a more flexible workforce next year. Companies must consider talent that will fill critical talent gaps and help companies stay ahead and talent acquisition strategies must include a more complete view of total talent.
Tech hiring remains one of the most misunderstood areas of talent acquisition today. As companies look to another year of unknowns, staying prepared and investing in the right support is critical to effectively attract and retain quality talent and meet changing business goals.
Author: Madeline Laurano, Founder & Chief Analyst for Aptitude Research
Aptitude Research is a leading human capital management (HCM) research and advisory firm based in Boston. Our in-depth research and vendor assessments help HR leaders develop a deep understanding of the HCM technology landscape, including talent acquisition and engagement, to ultimately make better purchase decisions.
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