The global technology industry recently got shaken up by the news of several mass layoffs by some of its biggest players. For example, Meta, the parent company of Facebook laid off 13 percent of its workforce globally, a total of 11,000 employees.
Even Facebook’s Asia-Pacific headquarters in Singapore let go of around 100 tech employees out of its 1,000-employee workforce.
Another major social media company, Twitter, has laid off 50 percent of its workforce, totaling 7,500 tech employees. Some of the affected departments have been machine learning, ethical artificial intelligence (AI), data science, and core engineering.
In recent news that has been making rounds, Amazon is also joining the list of tech companies making cuts and are planning to lay off 10,000 employees (3 percent of its total workforce) including tech professionals.
According to a news report by Business Standard, tech companies across the world, including those in Singapore, a leading tech hub in which many technology companies are headquartered, are entering a tech winter, freezing their hiring due to looming inflation, low consumer spending, and higher interest rates.
1. What is a Tech Winter and How Does it Affect Tech Hiring?
A technology winter or tech winter is a period of declining interest and investment in technology, as well as layoffs and hiring slowdowns.
The good news? Demand for tech workers will remain high in the long run. It is not easy to find talent in certain tech roles such as cloud engineering, data science, and cybersecurity. With a scarcity of talent in these various roles and continuous demand for tech workers in the long term, this indicates that the ‘winter’ of hiring freezes and retrenchment exercises is likely a short-lived one.
With this continuous demand for tech talent in mind, how can recruiters, in-house talent acquisition teams, and RPOs fill the gap for strong tech talent and fulfill an organisation’s needs?
Here are the answers to some of the most common questions that talent teams and recruiters have regarding the tech winter, its impacts on hiring, as well as what the future of finding and hiring the right tech talent might pan out to be.
2. Is the Tech Market Running Short of Tech Talent?
Yes, there is shortage of tech talent due to several factors. One of them is the fast digital transformation that is creating a high demand for IT executives to develop and maintain digital infrastructures, with the supply of talent not matching up to this sudden increase in demand for tech talent.
Indeed, various studies have revealed a global talent shortage in the technology industry. Statistics have shown there are 5 vacant jobs for each software developer in the US.
A recent report by Gartner states that talent shortages of IT executives are a major obstacle to the adoption of nearly 64 percent of emerging technologies.
The shortage of tech talents is spurring the demand of tech talents even more, and businesses are under tremendous pressure to find the right people. Many organisations are even turning to contractors to cover talent gaps as DevOps professionals, cyber security specialists, and data scientists are in short supply.
HackerTrail Insider Tip: With such high demand for tech talent amidst its shortage, finding your ideal candidate can be aided significantly with you and/or your team creating a persona or profile for the right types of candidates you are searching for. This allows for greater clarity and makes it quicker for you to kickstart the hunt for your ideal candidates.
3. How is Tech Recruitment Still High in Southeast Asia Despite the Recent Slowdown in Hiring?
Despite the effects of tech winter, Southeast Asian (SEA) tech startups and large enterprises have not backed down from sourcing for top tech talents due to high demand. For example, Southeast Asia’s largest job platform Glint has more than 30,000 active job listings every month and 40,000 listed employers.
Although some industries in the SEA market like crypto have encountered a slowdown, industries, such as FinTech, AI, eCommerce, and blockchain have grown fast and continue to hire.
Besides technology-based companies, the high demand for tech talents in Southeast Asia is due to digital transformation in various other industries, including financial services, consumer products, real estate, and others.
4. What Other Factors are Driving the Demand for Tech Talents in Southeast Asia?
The demand for tech talent comes from various industries. The impact of the pandemic has pushed digital transformation at a rapid pace with companies beginning to focus on digital channels to engage with consumers, develop communities, and sell their products or services, thus leading to a demand for tech talent from different industries even outside of tech.
In the post-pandemic era, despite the reopening of many physical offices, the hybrid work model still prevails. This current hybrid model is now increasing demand for tech talents to build, maintain, and innovate within the digital space. The demand for such talent is here to stay.
There are also other factors driving the demand for tech talents in Southeast Asia, including the rise of tech startups in the region, the growing market of international technology, great work cultures, and the need for excellent customer support.
5. Will Tech Startups Continue to Play a Key Role in Hiring a Bulk of Tech Talents?
The market outlook surely looks like it. Southeast Asian countries such as Singapore, Malaysia, Indonesia, Philippines, Thailand, and Vietnam have a strong prospective tech market. The countries are the active tech talent hunting grounds for tech startups and digital industries as they have enjoyed a lot of success in recent years.
According to Forbes, the combined valuation of Southeast Asia’s tech startups was $340 billion in 2020, and the forecast says it will triple by 2025, indicating that the demand for tech talent in the region appears to be on an upward trend.
6. What Strategies Are Tech Companies Implementing to Fill the Shortage of Tech Talent?
To deal with the shortage of tech talents when it comes to filling tech roles, many companies are employing a three-pronged strategy to manage this problem.
- The first strategy is outsourcing some of the tech projects to contractors who can take on this heavy workload. By hiring contractual workers and freelancers, organisations can plug this talent gap for the moment which can help to increase efficiency and reduce costs.
- The second strategy is roping in Managed Service Providers (MSPs) for end-to-end IT support and maintenance work. MSPs can manage large tech projects and they are often more cost-efficient than internal IT employees.
- The third strategy is training existing tech staff. Upgrading the knowledge and skills of existing employees costs less to companies than hiring new talents. Usually, existing tech workers are more open to new opportunities for learning and development.
7. What Winning Strategy Should Recruiters Adopt in the Post-Pandemic Era?
In the post-pandemic era, recruitment professionals should take a closer look at the way they approach candidates. COVID-19 left a deep impact on people’s psyche, including job seekers: although money is important, it is not everything for candidates because their priorities have changed.
Among a sample of over 3,000 professionals, here are the top four priorities for candidates listed below:
- Work-Life Balance: 70 percent
- Salary and Benefits: 67 percent
- Co-Workers and Culture: 64 percent
- Career Progression and Training Opportunities: 58 percent
Recruiters can create a winning strategy by keeping in mind these priorities and modifying their approach to candidates, allowing them to present candidates with the best offer.
8. Could Candidates With Unconventional or Non-Tech Backgrounds Fill Tech Talent Shortages?
One frequently used solution to the shortage of tech talent is for companies to hire candidates with conventional backgrounds. Hiring managers can be quite cautious when hiring people from unconventional backgrounds to fill critical tech roles in an organization.
However, a McKinsey report covering 280,000 tech professionals in four countries has revealed that 44 percent of respondents had once started in non-tech professions. This shows that it is not always necessary for organisations to hire candidates who only hail from technical backgrounds as it limits the pool of candidates they can access.
In the long run, the tech industry is expected to continue growing and along with that, hiring efforts will mirror this upward trajectory too.
All in all, while many economies are experiencing a tech winter right now with layoffs and hiring freezes, this period can prove to be an opportune time for recruiters, in-house talent acquisition teams, and RPOs to re-evaluate their recruitment processes and strategies in order to be better positioned to attract and hire top tech talent once the tech industry picks up again.