Ahead of the Curve: Planning for Talent in a Down Market

Between supply chain shortages and high inflation, everyone has been keeping an eye on the economy. The rapid changes over the past two years have shaken up every industry, but they’ve also sparked a boom in tech, leading to a competitive market for talent.

However, that market has recently changed.

As the economy resets across the board, a venture capital reset is also taking place. All over the news are stories of companies announcing hiring freezes, layoffs, and even rescinding hundreds of offers. Last month was the first month in more than a year when global venture funding dropped below $40 billion.

There is lots of doom and gloom news, but the economy is always cyclical, and things are not as bleak as they sound. Even now, there are lots of companies that cannot hire fast enough, and there is still an urgent need for tech talent, particularly as traditionally non-tech companies make the move to tech-enablement, leading to a rise in the demand for skilled talent. Make no mistake — the talent market is still competitive and a change in the market does not mean that it will be easy to acquire talent. Still, even in a down market, there are exciting opportunities to take advantage of when looking for star talent.

Before we look into the possibilities, let’s try to understand why markets are down today.

Cycles of change

The ups and downs of the economy are inevitable, but it’s easy to feel surprised by the onset of a down market when we’ve been enjoying a boom for so long.

Money has been cheap, and that made those with access to capital less sensitive to what they were investing in, and even reckless. Sometimes there was a lack of due diligence in assessing an investment, or an overinflated sense of success. The amount of money going into companies has made fundraising easy and fed the boom. Similar to the hot housing market, people have been overpaying and assuming that they will see a return later on.

Where we are

In a down market, many companies are slowing down or completely stopping their hiring. The price for talent has changed, and there isn’t the same competition that we were seeing even just a short while ago. No matter what a company’s stance on recruitment and talent acquisition is, now is the time to keep a finger on the pulse, monitoring the landscape.

Even when things are trending down, there is still opportunity. It is more advantageous for funds to come into seed stages right now. And while some companies are hitting pause on recruiting tech talent, many are doing something new. Companies like Airbnb, Paypal, and Uber have found success in a similar down market in the past. Great companies are still being built, and growth and success are still possible even when the market changes.

Where we can go

While moving away from a boom feels uncertain, now is the time to return to thoughtful and strategic hiring practices.

In some cases, you might need to slow down or hit pause on hiring, but if you have the runway, this is an exciting time to be hiring. With many companies starting layoffs, it’s possible to snatch stellar talent at a less competitive price. Most importantly, with less competition, it is easier to find the key talent pillars that will set up your company for success.

Right now might not necessarily be the time to do lots of hiring, but rather take the time to find the talent needed for your forward growth. Be true to what you need, rather than settling. You can make sure that you have the right fit by doing another interview, being selective so that you find the talent you will want to work with years from now.

For those who are on a hiring freeze, it’s essential to be observant. Look at where you need key hires who will be core to your team and the future of your company. Pay attention to the market, because if you don’t take advantage of hiring at a good price, you’ll be part of the mad rush again. If you look away now, you’ll have a rude awakening later on.

Your character is determined in tough times, and your reputation as a company is built on how you handle choppy waters. If you are forced to do layoffs, make sure you’re being decent and treating your employees like human beings (no Zoom call mass layoffs!). When the time comes to hire again, you will have to answer for how you acted when times were tough. What you do now will be a testament to your company’s culture.

Be decent. Do your work. Build something great.

• Arlin Dueck, Executive Director of Talent

Interested in learning how Harvest can help you with your talent management strategy? Find out more here.