by Airbnb and Uber having captured much of the industry’s attention this week – it is reasonable to ask: what happens to all the talent that is laid off? What is the impact of changes in the balance between supply and demand on wages? East anybody safe in this market? “data-reactid =” 23 “> Given the never-ending pace of layoff announcements – with deep cuts to Airbnb and Uber drawing much of the industry’s attention this week – it’s reasonable to ask yourself: what happens to all the talent that is laid off? how does the balance of supply and demand have an impact on compensation? anybody safe in this market?
Because questions are at the forefront of virtually everyone everywhere at the moment, we have contacted recruiters in the industry we know – technology – to ask what they are seeing and what they expect to happen at over the next three to six months. . Not surprisingly, they told us that they had seen a sharp drop in job searches and many wage cuts, but they also say that there are silver liners in these turbulent times.
First the bad news, and for now, it’s mostly bad news.
Betts Recruiting, says that when “coronavirus advisories were detected and the shelters went out, we saw 80% of our stuff freezing. And then it went down.” “data-reactid =” 26 “> Sales and marketing positions – especially in startups facing consumers – have been hit hard, and they won’t be back anytime soon, maybe not even in 2020. Carolyn Betts, Founder from national recruiting firm Betts Recruiting, said when the “coronavirus hit and took shelter” on-site advisories came out, we saw 80% of our business freeze. And then it came down from there. “
PPP loan allowed the company to further adjust compensation by 10%. “data-reactid =” 27 “> Betts’ bootstrap recruiting firm – which performs sales, marketing and human operations functions – was forced to lay off its own workers due to the loss, losing 30 % of its staff and reducing the wages of the remaining employees by 20%, although Betts says a PPP loan has allowed the company to adjust wages again by 10%.
In the meantime, she has been at the forefront of moving almost overnight from an employee market where raising wages and signing bonuses has become routine, to an employer-focused market where candidates get what they get. “There are so many talents on the market that there are backup candidates for backup candidates.” Indeed, his advice to job applicants at this time is to recognize that the game has changed and that if pushed, the hiring company could “just move on to the next candidate. Everyone will hire them budget limits right now, and they weren’t going to make exceptions for the most part. “
Executive searches are also, as you might expect, largely frozen at the moment. That’s what Teri McFadden, vice president of recruiting for venture capital Norwest Venture Partners, suggests, where for almost 12 years, she helped the company’s holding companies fill key positions.
Before COVID-19 hit the United States, the company envisioned roughly “160 active executive-level open searches in our portfolio – clearly more than my Norwest team could handle,” said McFadden. (Like most venture capital firms, Norwest sometimes hires outside research.) Now that number has dropped by more than half. Some, she says, are “complete cancellations,” while “other people simply pause research to see what will happen in the coming quarters.”
company announcement after company announcement these last weeks. In general, she suggests, C-suite executives get a 20% pay cut while the next level of management gets a 10% pay cut and “everyone below of a certain salary level “sees no reduction in salary. But it varies from company to company. “Data-reactid =” 32 “> In the meantime, some roles have been hit harder than others, said McFadden, who specifically quotes from marketing groups. She also notes that executive compensation in companies that have most negatively impacted by the coronavirus are declining, an observation that the public has seen playing out in the company’s announcement after the company’s announcement in recent weeks. C-suite executives take a 20% pay cut while the next level of management takes a 10% pay cut and “anyone below a certain salary level” does not see a pay cut. But it varies from company to company.
Even engineers in today’s climate are not spared, suggests Sam Wholley, a longtime partner of the recruitment firm of Silicon Valley Riviera Partners, specializing in engineering, product leadership and design. While the new jobs pay roughly what they did two months ago, Wholley and McFadden expect the market to soften in the months to come, with wages falling 10-20%. (Wholley says engineers’ salaries tend to go in this direction before the virus even sends everyone on the run.)
A bigger problem is simple demand and supply. For the first time in more than a decade, the supply of engineering talent may exceed need – or, at least, the ability to pay for it. To the question, for example, whether the young companies that continue to receive funding could absorb the engineers who have been laid off by larger companies, Wholley responds that “unfortunately I don’t think so, and I don’t think so will be that for a while. “While new companies are still being created,” he continues, “it could take up to a year to find the right match.” It could also mean “looking in a different industry or perhaps a different geography.” of what they have “in the past.
But wait! As promised, the news is not all terrible.
Betts also notes that some customers in places like Texas, where people enter public spaces, “open up” and begin to strategize about the people they want to hire or re-hire.
“Many people have received some relief regarding their growth plans,” says Betts, “but it’s in May. [to a more normal state of affairs], [management teams] should step on the gas to make up for lost time, and no one wants to be taken flat. If you start hiring when everyone says “go for it”, you’ve missed your edge. “
McFadden and Wholly echo this point, Wholley saying “strong hands keep hiring” and McFadden separately offering that Norwest sees two categories of companies that are “ready to do well in the long run”, including young focused startups on product development (with fewer mouths to feed), and those who are finding even more demand for their products right now, like software tools designed expressly for remote teams and even hair color companies aimed directly at consumers .
While this is still a relatively small pool of potential employers, “I think in general,” says McFadden, “companies are starting to think about what life is like after COVID-19, and it’s not just about misfortune.”