How falling stocks create hiring opportunities

Falling markets have led some of the hottest tech companies to cut staff. These layoffs can create opportunities for more traditional companies looking to hire and for potential employees looking for stability.

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Stock market news has been rather bleak lately, especially as high-flying tech stocks lead the decline, with the tech-heavy NASDAQ index down nearly 30% in 2022. Similarly, venture capital investment has declined and the heady days of venture capital fueled “growth at all costs” have largely disappeared.

While this is grim news for the investment portfolios of tech leaders, it creates an opportunity to address long-standing tech staffing shortages. For years, tech leaders have been competing and often losing the battle for talent with Meta, Amazon and Google on the one hand and venture capital-backed startups on the other.

Historically, these employers were high-risk, high-paying propositions for tech workers. If one could survive grueling hours and high turnover, the lucrative rewards fueled by stock options were the price. However, as the demand for tech workers grew, “churning and burning” cultures were replaced by genteel environments at many large tech companies, and even startups began to focus on everything, from base salary to workplace benefits.

A shifting balance of power

Unquestionably, the balance of power between employees and employers once tipped in favor of employees, especially in the technology sector. This created the unusual combination of high stock-based pay and relative job security, a proposition that more traditional companies struggled to match.

However, economic turmoil disrupted this combination. At large tech companies like Amazon, more than 30% of a high-level technical worker’s salary may be in the form of restricted stock units (RSUs). An employee who joined Amazon a year ago saw the value of those RSUs drop by more than 60%.

These companies have also gradually shifted their public proclamations from statements of unwavering support to employees and potential recruits to warnings of layoffs. Tesla’s Elon Musk announced a 10% workforce reduction in June, followed by Meta CEO Mark Zuckerberg announcing reduced hiring targets and “increasing pressure” on performance management.

In this environment, you may find that candidates who have turned down your cash compensation plan or “boring” stocks are suddenly interested in what you have to offer on the compensation front. Likewise, some degree of employment stability and predictability may be on the table at your company and seem much less certain at branded technology companies.

SEE: The COVID-19 Gender Gap: Why Women Are Quitting Jobs and How to Get Them Back to Work (Free PDF) (TechRepublic)

Sell ​​intangibles

No one wants a return to the dot-com crash or the post-2008 job market. Still, streamlining in the tech sector should provide welcome respite for tech executives who have struggled to attract and retain talent, especially in the face of the possibility of employees working remotely for a large company.

The changing economic environment will likely attract more potential candidates to your company, but you still need to demonstrate that your team is a better place to grow a career than a big tech company. In addition to the benefits you usually mention, if any, discuss how your team might provide a degree of stability that a technology company that is rapidly reorganizing or refocusing due to economic conditions might not.

You could also argue that working for a company that doesn’t just focus on technology could benefit the candidate. The risks of working for a purely technological company from a financial point of view are widely exposed. Potential employees might also be open to the idea that a company that doesn’t just focus on technology can be a great place to build a career.

Building systems and technologies to support manufacturing has the dual benefit of improving technical skills and learning about manufacturing. Suppose your company manufactures consumer or industrial products, provides professional services, or is a government entity. In this case, you could argue that your organization offers a richer career path than one focused solely on technology.

While no one can predict where the economy will go in the coming months, it looks like big tech companies are hunkering down and cutting back on hiring. Hopefully we avoid the massive layoffs and talent sellouts of 2000 and 2009, but there are likely more receptive candidates to join your organization than there were a few months ago.