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The economic downturn isn’t going away anytime soon, and neither is the need for tech talent. Even with the economy in a slump and companies scaling back on their hiring practices, keeping your software projects running and strengthening your teams with top-notch programmers is still essential if your goal is to survive the recession.
Right now, many companies are looking to build their own recession-proof tech talent pools, as well as rethink their hiring practices and approaches. We see this trend in practice when dealing with the customers’ requests to hire one cross-functional specialist instead of hiring two employees or build a tech team on a lower budget. We also see the rising interest in global hiring. According to our personal experience, now companies tap into a global workforce with more confidence, discovering the IT outsourcing destinations they have never considered before.
That’s why in this article, we would like to explain why an economic recession shouldn’t be a reason to put the hiring process on hold and suggest ways you can proceed with recruiting technical talent in a more effective manner.
What is an economic recession and what are its causes?
Let’s start with the definition. Oxford Dictionary defines a recession as “a difficult time for the economy of a country, when there is less trade and industrial activity than usual and more people are unemployed.” According to economic theory, an economic recession is usually caused by structural shifts in industrial production (when certain industry sparkles while the other faces stagnation), financial factors like growing interest rates, decreased consumer confidence, political instability, and armed conflicts, leading to a significant decline in economic activity, growing unemployment rate and 2-5% decrease in a Growth Domestic Product (GDP).
As for our current situation, the 2020 Covid pandemic was just one of the several factors of the economic recession, with China suffering most from it. McKinsey&Company states that inflation, volatile energy prices, geopolitical instability and conflicts, rising interest rates, supply chain disruptions, and labor shortages are the main potential risks of global economic growth.
How the current economic recession influences the tech market
Massive layoffs of tech workers is the major tech labor market negative trend triggered by an economic recession. In 2008, which was also the year of the global economic crisis, companies fired 65,000 tech employees. For comparison, this figure reached 150,000 technical specialists by the end of 2022.
Big companies like Meta and Netflix also freeze their hiring explaining this decision by the need to adjust their business growth strategy. At the same time, they assure they are still looking for opportunities to expand their workforce with top technical talent.
At the same time, the industry faces an unprecedented tech talent shortage. There are only 65 candidates for 100 job openings, and the tech talent gap is projected to grow. By 2030, the global talent shortage is expected to reach 85.2 million, with the deepest talent gap in the ICT industry.
IT Workers Are the Real Unicorns or Tech Talent Shortage 2022
What’s more, top software developers are also massively fleeing their workplaces, giving the rise to the Great Resignation trend. According to a Gartner Survey, only 29% of tech workers have a strong intent to stay within their current company. Those who decide to leave search for better career opportunities, more meaningful projects, and higher salaries. As for the latter, this is the logical response to the growing cost of living and inflation, which was at an 8,8% rate in 2022 (while the acceptable level of inflation is around 2%).
All in all, companies struggle with meeting software developers’ expectations. While the latter are looking to get paid higher, the former strive to cut costs. This vicious circle is created by the recession, making companies face unprecedented challenges.
However, there is no crisis without opportunities and the tech labor market is unlikely to get cooler. Despite the economic recession, early-stage startups doubled their funding in 2021. Gartner predicts a 5,1% rise in global IT spending in 2023, which will reach $4,6 trillion by the end of the year.
Additionally, according to a recent report by the U.S. Bureau of Labor Statistics, software developer jobs were projected to grow by 21% by 2028. The wheel of progress and technological advancement creates a growing demand for virtual and augmented reality, artificial intelligence, machine learning engineers, Internet of Things software developers, data analysts, and cybersecurity experts.
So, when summarizing all of the above, we can say that even despite the growing demand for technical talent, stronger competition for the best minds, and fast-growing developers’ salaries, the economic recession shouldn’t be a reason to freeze hiring. If you give up competing for the top software developers today, tomorrow they will be hired by someone else, and you will have to pay higher to make them consider your project. That’s why, an economic recession, on the contrary, should be a reason to rethink some tech talent hiring practices and approaches.
The best practices to hire software developers amid the 2023 global economic recession
As the economy continues to slow down, many companies are looking to save money by hiring less qualified and lower-paid employees. However, this strategy can come back to bite you in the long run. That’s why sacrificing talent quality isn’t the best bet. Instead, consider the following practices.
Consider hiring full-stack developers
Hiring full-stack developers is a way to ensure that your business will not only survive but thrive during hard times. The best thing about full-stack developers is that they have a complete understanding of how front and back-end work, and most importantly – how to program and design both of them. So you have to hire just one programmer instead of two, while the salary difference between a front-end, back-end, and full-stack developer isn’t so significant. Let’s compare.
- A front-end developer makes $6500 monthly in the USA
- A back-end developer earns $6450 a month
- The full-stack developer’s salary is $7200 per month on average
Following the logic of simple math, hiring a full-stack developer will cost you a little more than $7000 per month, while the cost to hire two separate roles would be two times higher.
Invest in training people you already have
In the time of economic uncertainty, it’s tempting to look for a quick fix when it comes to hiring new employees. But if you’re able to invest in training people, who already work for you, it will definitely pay off. Investing in training employees that already work for your company is another way to save money and still get quality talent who can help your business grow during tough times. Also, by investing in upskilling your existing employees, you’ll be able to improve both employee retention and loyalty.
Take care of your online reputation
The internet is a big place and it is impossible to satisfy everyone. That’s why you sometimes may find bad reviews or unflattering comments about your company on social media and in professional communities. So, make sure you’re monitoring your online reputation closely, especially if you have a hiring campaign running. Potential candidates are very likely to check your company’s reviews from ex-employees on Glassdoor, G2, and thematic forums, so keeping your rating high promises a better opportunity to hire top talent. But if someone has something negative to say about your business, address it immediately and always take justified feedback into account.
Build a strong corporate culture
Recession has made it hard for companies to hire the best software developers. However, hiring them is still a priority for many businesses, so when you’re one of them, your company culture plays a big role in attracting new employees as well.
A strong corporate culture can help you attract and retain talented people during an economic recession when many companies are cutting back on expenses and laying off employees. It’s important to create an environment where people feel comfortable being themselves and doing what they love to do. As an option, consider developing an open-door policy so your employees can share their concerns with you directly.
Switch to tech-enabled hiring
While you can’t sacrifice the quality of talent you hire, you still have an opportunity to cut hiring costs, and here’s how. Tech-enabled approach with data analysis and automation technologies at heart will help you streamline the routine processes – from gathering a pool of suitable candidates to nurturing and interviewing them.
We know this for sure because that’s what we do here in Bridge. We specialize in tech-powered sourcing, and using our proprietary sourcing engine, we help our clients deal with existing hiring challenges more effectively. Here is how we do it.
How does Bridge’s sourcing-as-a-service help with hiring tech talent during the economic recession?
Driven by the goal to help companies hire the best-qualified talent at scale, we have created a data-fueled talent sourcing engine tailored to deliver several significant advantages at once.
- Optimizing hiring costs. With our sourcing-as-a-service, companies can save up to 60% of their hiring costs. In times of economic recession, saving resources becomes even more crucial – that’s why most of our customers subscribe to our sourcing-as-a-service on a monthly or yearly basis, saving even more.
- Faster hiring. Our data-driven engine automates the most laborious tech talent hiring task – gathering a database of relevant candidates. Since 80% of the process is automated, our experts can source relevant candidates five times faster compared to manual sourcing.
- Finding and recruiting relevant and highly interested candidates. We already have a global-wide talent pool of 900k software developers and related tech specialists who are open to new opportunities. In this way, we ensure a high offer-to-acceptance rate so that your best developers get started with your project immediately.
- Building a talent pool for the future. The opportunity to build an extensive talent pool for the future is the reason why most of our customers subscribe to our sourcing-as-a-service on yearly basis, expanding the database of relevant candidates month by month.
- Recruit software developers globally. With us, you can hire the finest-tuned software developers across three continents. Even if you have highly specific requirements, we will be able to meet them.
Here’s a case in point. Recently we helped Jasper.ai hire five senior-level software engineers skilled in AI/ML and GPT-3 algorithms. We bet you have heard about this company – Jasper is an AI-powered content writing solution that recently managed to raise $125 million in venture funding. The company’s requirements were very specific. They looked for Silicon Valley-caliber developers who live in tech-first US states, have ML and AI development expertise, and have a product mindset.
During the first 30 days of our collaboration, we managed to provide 20 relevant candidates and 30 more during the next two months. Despite many applicants who lived in specified areas asked for above-average salaries, our talent sourcers still managed to help Jasper find perfect-match candidates at $1500 cost per hire.
Inspired by Jasper’s results? Let us help you too! Get in touch with us today to unlock the full power of automated soucing-as-a-service!
Conclusion
It would be wrong to deny the impact an economic recession has on businesses globally. There are fewer candidates available, they have more options than ever before, and the competition is fierce.
Still, the truth is that hiring technical talent is one of the ways for your business to grow and succeed in this environment. Your software developers are the only ones who can create your project, scale it, and drive its growth. They are the ones who will ensure that your company survives and thrives through this recession.
What’s more, you don’t have to do everything alone when it comes to finding the best technical talent globally — Bridge can help! Our company is here to support you by sourcing the best technical talent globally, meeting your job requirements, taking your budget into account, and working as an extension of your in-house HR department.
Drop us a line now to build a thriving tech team despite an economic recession!
