As for many, the events unfolding in recent weeks have pushed everyone’s boundaries into managing new challenges that few were prepared for. I’ve been on dozens of calls in the last 2 weeks, monitoring the situation and trying to quickly evaluate the best strategies on what to expect next.
Today, I wanted to post a short hypothesis on how these events will impact the IT hiring market. During my professional career, I was able to see how the last economic downturn in 2008 had changed many things related to IT hiring, and from this experience, I can see similar patterns happening again.
With a large imbalance in the IT hiring market throughout the years and deficit of talented IT professionals, this has pushed primarily larger organizations to hire individuals at high above market compensation packages, hire individuals that may not have met technical qualifications originally required, or overhire for projects that simply did not need such capacity. The immediate impact of the market change can already be seen with organizations related to body shopping and outsourcing. Such groups are right now in high competition to find new projects ASAP.
So, what shall we expect and should we be afraid when it comes to the IT hiring market?
My short answer is no. Even though it may not seem so at first, the upcoming months will actually give a needed restart to the market in general, and provide opportunities for new projects to grow. Why?
When looking into data from our platform we don’t see any major slow down on main indicators. Some companies are freezing their recruitment activities to see how the current situation will develop (30% of our clients). Others took the opportunity and are much more active to leverage lower competition in the IT hiring market. These active companies compensate the inactivity of the companies with a hiring freeze.
Every week over 350 new conversations between companies and candidates are generated. We have over 400 Open positions published offering opportunities to Candidates actively searching for the job opportunities. Several successful placements were delivered just last week by our internal team for clients using Techloop Sourcer service. Other placements were closed by our clients using the platform as a self-service tool. We start to see an increasing number of Candidates registrations as well.
My prognosis is that we will see multiple companies cut IT projects and teams in the next 2-3 months, not only for pure cashflow reasons but as in 2008, an opportunity to restructure teams more efficiently and rehire. This may include:
- Internalizing teams and not be dependent on external sources or companies for delivery
- Hiring new talent available on the market at a lower compensation level than before
- Free up cashflow to bring in more experienced IT professionals that were not available on the market before
- Evaluate top priority projects that truly have a business impact and put focused teams on these projects
- Reprioritize new tools and channels for hiring that are cost-effective. Here I believe such tools like Techloop will have a positive impact on better presenting key benefits of IT projects to better match candidates and companies
How does this impact IT professionals in the upcoming months? Yes, every time you may lose a job or have to consider lower compensation is a painful decision in the short term, So why should this be a good thing?
More opportunities will arise to join great companies that are still hiring but could not compete financially as much in terms of compensation. Other companies will be started and most likely become the top performers or start-ups in 2-3 years from now. Look at the data from 2008, some of the most renowned companies emerged from that time to become superstars today.
Last but not least, the latest events I believe will strongly influence the future of working remotely or from home, finally providing more leverage to what the IT market has always been pushing for.
The basic fact between 2008 and today is that still there is a huge deficit of IT professionals globally. And even though we will see some shifts in the market short term, the long term impact will show that the IT hiring industry is and will continue to thrive.
At Techloop, we understand that IT hiring will change in the next 2-3 months and become a sensitive decision for many companies. At the same time we want to support all the IT professionals that may be actively looking for a new job soon.
To do so, we want to help both sides of the market, How?
Techloop will provide an extra free 3 months to any renewed subscription during April, providing enough time to manage your hiring needs throughout the upcoming months. It will give you an opportunity to reach out to more IT professionals that will be available on the market and keep costs effective. We will release a brand new public job portal in the beginning of April where all Candidates could search for interesting opportunities. Techloop job portal will add another presentational layer to our customers and it will close up Techloop ecosystem.
I believe that in every economic downturn, there is an opportunity to come out better and stronger, this goes especially for the entire IT hiring market.
We are #InThisTogether
Andrew Elliott / Co-founder CEO