Tech lay-offs an opportunity for traditional firms to seize talent

AT THE peak of the tech hiring craze last year, some companies found that the tech talent that they needed for digitalisation had gotten way too expensive.

As The Business Times reported last October, the likes of ByteDance and Shopee dangled “crazy” wages to fill tech roles such as product managers and developers. A lead engineer could be paid as much as S$16,000 monthly. Even if a traditional company could pay a competitive salary, it was difficult for firms in less “sexy” sectors to attract young graduates drawn to up-and-coming tech verticals like e-commerce and gaming.

But in just the span of a year, the tech job market has changed dramatically. Big Tech is tightening its belt, and prominent industry names including Shopee, foodpanda, Crypto.com and Shopify have announced job cuts. Even Facebook parent Meta, which had never before cut its headcount, announced on Sep 30 a hiring freeze and restructuring of some teams that could leave the company smaller in 2023 than it was this year. Smaller players have not been spared. Regional startups like StashAway and Xendit – which benefited from the red-hot private funding market – have also shed staff as macroeconomic pressures begin to test business models.

While lay-offs are painful, not all is lost. Retrenched tech workers now carry with them valuable experience. Even those who may have been in non-technical roles, such as content and social media managers, are equipped with the knowledge of working in a digital-first environment.

Traditional companies that are still in expansion mode perhaps now stand a better chance in drawing in these workers. Salary levels are likely to cool down from last year’s bubble, which should bode well for employers. They could also capitalise on any outflows of talent who are put off by the excesses of startup culture – such as the growth-at-all-costs mentality and heavy cash burn – and seeking a return to the small and medium-sized enterprise (SME) or corporate world.

While these are favourable hiring conditions, traditional companies themselves will also need to rethink how they approach talent attraction and retention. Young tech talent aren’t just drawn to startups for fancy office amenities or free kombucha. They also value the flexible working conditions that many startups offer, including remote work and progressive benefits like extended paternity leave and mental health subsidies. Startups also offer the opportunity to have a major role in shaping new projects, which may not be possible at a much bigger company or a top-down-driven SME.

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Traditional companies that hope to attract more tech talent will therefore need to honestly reassess their job benefits and training structures. Bosses who insist on bringing everyone back to the office – even if a job allows remote working – could be at the losing end of the drive to attract tech talent.

The job market last year was clearly in favour of employees, and now is rapidly shifting back to being an employers’ market. But the pandemic has also forced employees to fundamentally rethink the purpose of work and just how much of themselves they are willing to give to work. If they play their cards right, SMEs and corporates could use the current shifts to seize the tech talent they need.