I recruit Software Engineers on a daily basis and the sentiment is always the same — the tech market is “bad”. But it isn’t bad, it’s certainly not great, but right now it’s just weird.
However, before expanding on that, why should you listen to me? Well, I’m a Software Engineering Recruiter for some of the United States top startups — our job is to know what’s going on in the world of tech recruiting. Now, more so than ever before, my team and I speak to hundreds of people a month and gain insights into the how, the why and the who is doing what. We sit in a unique position where both sides can be totally honest with us and use us as a sounding board for their recent experiences (many of which have been negative as of late).
So, now that we have got that out of the way, back to the point of this post. The market’s not great…it’s not bad, just weird.
At this stage, it’s no secret that the US tech industry is going through a tough patch. We’ve seen stocks tank, a dormant IPO market and a litany of layoffs. This has created certain headaches for both candidates, and the remaining companies hiring. In simple terms, there are fewer roles, for a lot more engineers. There has been a slight power shift from the world of abundant opportunity to one in which there is genuine competition for roles.
Founders and other key stakeholders find this challenging due to huge influxes in their pipelines. Time is what they don’t have, and all too often we hear that pipeline isn’t = hires.
But it’s not all doom and gloom, as your Linkedin and daily media articles would have you believe. The one thing we haven’t yet seen is salary deterioration. I won’t prophesize whether this is coming down the pike, but for now — the line is holding.
Anyone who has recently had to flick on ‘open to opportunities’ on LinkedIn will tell you something like the following, “I’m still getting a lot of inbound messages, but it’s predominantly early-stage startups” OR “I seem to be receiving a lot from financial firms and seed startups.” Many of us had hoped that come 2023, the Tech Wreck would begin to improve, and we’ve been sorely disappointed. However, there are still plenty of companies hiring, it’s simply that the type of company has changed.
Sure, there might be fewer roles in an absolute sense, but anyone whose paid attention to the Labor Market data lately will tell you — it’s still not bad.
I know there’s a negative connotation with the word weird but to me weird means different. And in our book, different is good. Why is the tech market weird right now?
For the first time in the 8 years, I’ve been working with software engineers, both the presence and stability of FAANG (or MAANG now I guess), are in doubt and the days of growth at any cost (or not, when money was cheap), appear to have left us. The “stability”, ironically, and perhaps only in the short term, seems to be with early-stage startups (leaving out finance firms, who this article predominantly isn’t intended for).
Reuters alluded to this in an interesting article recently, although the total dollar value of investment is significantly down, the volume of funding into Seed, Series A & B startups haven’t been this high since 2000.
This makes sense for several reasons:
#1. Some of tech’s biggest names were started during bear markets and VCs are betting they can identify the new Google, Snowflake, or Salesforce during this time (there is another interesting article about PayPal circulating on this)
#2. 1 year ago, our client base consisted of companies like Chronosphere, Titan, Valon, Ramp, Airbyte, Clickup, Beyond Identity, Attentive and a number of others. There are two things that all of these companies have in common. They all had funding rounds of over $100 million and are valued at over $1 billion. In the past 8 months, the number of $100M funding announcements has dropped dramatically. The dreaded ‘down round’ has been more prevalent. Companies that raised money at very high 2020 or 2021 valuations have hit the brakes on hiring and seem to be hunkering down for the storm.
The client base we now largely serve are companies that have raised $5M, $10M or $25M, and did so during more conservative times. They have 2, 3 or sometimes 5 years of runway and are selective about who they hire, and how many they hire. I think it’s fair to say that even the talking heads on NBC don’t think this tech situation last beyond 2024, and so the question becomes “if I have the runway to wait it out, and am focused on execution, what’s up?” Assuming no performance-related issues, this should offer some comfort to engineers that wouldn’t usually choose a company of this stage and size. We view it as a good opportunity to make a bet on something early, in the knowledge that the vast majority of companies laying people off are further along, and more exposed in terms of their cash burn.
There’s a lot of economic uncertainty out there at the moment, but the purpose of this post is to be glass half full for anyone who needs it. What happens next is anyone’s guess, but for anyone anxious about their current circumstance, I would encourage you to explore something earlier stage. You never know, you might just land on the next Airbnb, PayPal or Uber (all 2008).
If anyone wants to chat about this topic in more detail, feel free to connect and drop me a line:
Click here to connect with me on LinkedIn
p.s. This is the first thing I’ve written since college… so take it easy on me!
Share this blog