2023 Trends: Talent acquisition & workforce planning

2023-05-29
in Best Practices, Management, Recruitment

What did we learn after the turbulent tech layoffs in 2022? With hundreds of companies shedding staff, sensational headlines make it sound like a tech bubble has burst and the entire industry is about to collapse. This will not be the case in 2023.

According to a ZipRecruiter survey, 79% of employees recently hired after a layoff, or regular termination found a new job no later than three months after starting their job search.

The tech industry has always been resilient and has grown even after previous tech bubble bursts. While hundreds of companies (including Google, Amazon, Meta, Salesforce, and Microsoft) are reducing their workforce, other larger tech firms like Duolingo or Revolut still encourage new applicants to apply.

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As mentioned by Angelina Ebeling, CEO and Founder at acework by Heico Group:

As the economy faces uncertainty, it is important to remember that not all business sectors and functions are affected. When the media discusses “Big Tech” they often refer to a broad category that includes companies ranging from social networking firms to electric vehicle and mobile phone manufacturers. In 2023 the concept of a ‘tech sector’ is becoming less relevant as every company, regardless of industry, needs to incorporate technology to remain competitive.

What did we learn after the turbulent 2022?

✓ The rise of contractors: In 2023 and beyond, the use of contractors in place of full-time employees is expected to become a standard hiring practice. This will result in cost savings for companies. Contractors typically do not receive comprehensive health benefits, paid time off, and other benefits. With economic growth slowing due to high inflation and interest rates, contractors will be utilized for temporary projects. This will allow companies to release expensive internal staff and underperforming employees. LinkedIn data shows a threefold increase in job postings for contract positions in the tech industry over the past two years. Meanwhile, a downsizing tracker in the tech sector, Layoffs.fyi, reports that over 150,000 white-collar tech employees were laid off in 2022.

✓ Bad timing for scaleups. The tech sector layoffs have reached Europe, where several well-known startups have implemented significant cuts to their teams to reduce expenses and maintain financial stability. As a result, raising funds is becoming more challenging, especially for scale-ups with high monthly expenditures.

✓ Tech companies need to be better at risk mitigation. Betting on an unusual macroeconomic environment that has quickly changed is very naive. Consumers are no longer tied to their homes during the pandemic and have more opportunities to spend their money.

✓ The speed of the redundancies highlighted the importance of complying with employment legislation in the UK and in the EU. This requires companies to give warnings and have plans to mitigate redundancies’ social impact.

These are some of the learnings related to the layoffs that happened in 2022/2023, but we explored the topic further and presented more learnings in our research paper Let’s Reinvent Talent Acquisition and Workforce Planning.

Let’s Reinvent Talent Acquisition and Workforce Planning!

Although it is impossible to predict the future, the layoffs in 2022/23 offer insights that organizations can use to create a workforce plan that retains their most talented employees.

⬇️⬇️⬇️ acework has teamed up with our partners at torq.partners to assess current market conditions from an HR and talent acquisition perspective and together, we built an in-depth research paper navigating the aftermath of 2022/2023 layoffs.

You can download the full research paper for free here.