April 30, 2021 – In the blink of an eye, the technology industry has flipped from a candidate-driven market to one that is client-driven, with the majority of companies cautiously assessing their needs to hire and grow, according to a recent report by StevenDouglas.
“Many organizations are having to adjust to significantly decreased revenues, and thus, make tough decisions. Others, however, are pivoting and thriving – while still others are somewhere in the middle,” said the report’s author, Michael Beaton.
Looking back to June of last year, Mr. Beaton points to the unemployment rate for U.S. tech workers hitting the lowest number ever recorded, arguably in the ‘negative’ unemployment range but some argue it was as high as 1.3 percent. In cybersecurity, the unemployment rate was zero percent, with an average of four positions available per qualified candidate. “This is important to note, as the record high unemployment that many are seeing does not translate to the tech industry,” Mr. Beaton said. “Though the entire economy is feeling the pain of pandemic shutdowns, the tech industry has fared very well compared to other sectors.” According to the Labor Department, during that time, unemployment reached 23 million, driven largely by the entertainment industry. Of that, only 254,000 Americans lost their jobs in the information sector.
With that said, as offices and the economy continue to open back up, many companies are taking advantage of the ‘flipped labor market’ and actively hiring. “This has allowed them access to the talent they had a hard time attaining pre-pandemic,” Mr. Beaton said. “We have even seen an uptick in positions related to core engineering, network, infrastructure and cybersecurity.”
Search Firm’s Unique View
Executive search firms have a unique view of the market in their respective fields. “We can see who is hiring, laying off, furloughing, freezing searches or canceling searches in near real-time due to our candidate and client networks,” said Mr. Beaton. “We also have access to talent that is passively or actively looking and are uninterested in applying to jobs with the all too familiar no response. Some of these individuals may fear that a cut is coming and would like to see what else is out there but won’t spend their time applying to positions along with hundreds if not thousands of others.”
Michael Beaton joined the information technology search division of StevenDouglas as a director in 2015. Prior to StevenDouglas, Mr. Beaton began his career with a large national recruiting firm in Orlando, where he specialized in the recruitment of application developers, infrastructure engineers, information security professionals and C-level executives within the IT Industry. His national client base ranged from start-ups to small, medium and Fortune 500 companies.
Mr. Beaton also notes that one must make the distinction between a passive and an active candidate as well. “Although the unemployed represent a larger number of individuals now verses several months ago, it is still a relatively small number within the tech industry,” he said. “Arguably, you will severely limit your search to 10 to 15 percent of the market by only targeting active candidates (via HR running the search through job postings).”
On the client-side, Mr. Beaton said that StevenDouglas is seeing a great number of companies view this as an opportunity to ‘top-grade’ talent. “This is done by identifying low performing individuals and replacing them with A-players. If the objective is to ‘top- grade,’ (the practice of creating the highest quality workforce by ensuring hiring processes focus on identifying, hiring, promoting and retaining high performers), it is important to keep in mind that the majority of high performing talent is still employed,” he said. “Of course, there are some A players that are actively looking at any given time and that number has increased, so I certainly don’t want to discriminate against them.”
Many of the hiring hurdles that existed prior to the pandemic are still present and some even exacerbated. “Most candidates that we speak to apply for positions and never hear anything back, even though they may be the right fit,” said Mr. Beaton. “This is due to a massive influx of non-qualified applicants, broken hiring practices, unqualified resume reviewers, etc. It is also important to note that with recent forced acceptance of remote work, companies are more willing to hire fully remote talent. Local competition has expanded to nationwide competition hiring South Florida-based candidates on a fully remote basis. Although unemployment still remains high, highly qualified technology professionals are still in high demand, and with the new adaption to remote workforces, they are being approached by companies nationwide which is creating an additional hurdle to attracting talent at the local level.”
Coming out of the COVID-19 crisis, everyone knows the world of work will change. Greenwich Harbor Partners has been talking with business leaders across the country about what our new world order of work might be like. Based on these conversations, the search firm brings us inside some changes that we can expect to see in the months ahead.
Mr. Beaton said he has seen a number of clients view this as an opportunity to avoid using a search firm, with the thought that there are technology professionals unemployed in droves. “They have run into the same problems they experienced pre-pandemic (i.e., not getting the right candidates). Some have then come back to me after failing to find the right individual via postings and we have successfully delivered for them.”
With unemployment at an all-time high, companies now have more competition with ‘A’ candidates applying to their competitors on a national level via remote work.
Mr. Beaton noted that “you are severely limiting your search by only targeting active candidates. We have access to vast pools of candidates (i.e., the other 90 percent that aren’t actively looking) that you would likely not find with a job posting that targets active seekers.”
“Job postings will be inundated with a vast increase in non-qualified applicants that you must screen through,” Mr. Beaton said. “However, candidates prefer utilizing their network vs. job postings.”
Mr. Beaton stresses that its more important than ever to work with the right search firm in times of economic uncertainty; a true partner will be flexible with you. “For confidential searches, there is no better approach than using a firm with an excellent reputation for discretion,” he said. “Reputation matters – search firm are the first interaction a candidate will have while exploring opportunities at your company and are trained to make the hiring process as painless as possible on both sides.”
Veteran Search Consultants
Established in 1984, StevenDouglas is a boutique search and interim resources firm. Its client base is industry agnostic and ranges from start-ups and emerging middle-market to Fortune 500 companies and private equity firms. The firm has experience in a variety of key areas of expertise, as well as rapid-growth, highly competitive practices, such as IT staffing and consulting.
The StevenDouglas tech practice brings an average of 19 years of IT recruiting experience, helping clients navigate this rapidly changing job market and delivering top IT talent. In addition, the firm’s IT staffing and consulting division helps these businesses by providing talented IT consultants in a staff augmentation setting on an interim or contract to hire basis.
Contributed by Scott A. Scanlon, Editor-in-Chief; Dale M. Zupsansky, Managing Editor; and Stephen Sawicki, Managing Editor – Hunt Scanlon Media