Tech Hiring – Survival of the most Liquid
In the hectic world of hiring and firing, it was technology giant Intel’s planned layoff of 12,000 people that grabbed recent headlines and added to a list of job cuts by US tech companies including IBM and Microsoft.
On top of the large number of redundancies, a Dice Company analysis of the latest turnover data from the U.S. Bureau of Labor Statistics, showed voluntary resignations in the first three-quarters of 2015 were the highest since 2002.
However, not everyone is saying it’s all doom and gloom. In fact, according to Computerworld’s 2016 IT Salary Survey, 44% of IT managers said they expect to expand hiring of IT staff this year.
So, in summary, there are lots of companies looking to hire. However, could this be in large part because they need to replace employees who are walking out the door to a “better” opportunity?
If this is the case then how should we start to define a “better” opportunity? The evidence points to one main thing. Cold, hard, cash!
Online career site Glassdoor Inc. has stated that technology firms currently make up 20 of the 25 highest-paying companies in the U.S. This is the result of multi-year gains in total compensation within the industry, and the trend seems set to continue. Computerworld is predicting a 3.9% increase in total compensation (base salary plus bonus) for 2016 according to its polls.
There seems then to be a real battlefield emerging in the tech sector when it comes to hiring talent. On the one hand, there is demand to hire and retain talent, meaning that businesses are constantly increasing salaries and making higher and higher bids to attract the best. On the other side, many tech companies are being forced into cost related lay-offs.
This has led me to wonder whether this “one-upmanship” when it comes to compensation is actually causing the turnover problem across the technology industry. Whilst companies are simply prepared to raise basic salaries and acquiesce to the monetary desires and demands of the existing talent pool, the odds of a true long-term employment perspective ever developing remain slim.
However, at some point, companies might decide to invest their dollars in skill development and training to increase the supply of talent for hiring. Or, they might simply find a market level ceiling on salaries so that finally prospective employees will no longer be holding all the cards and the chances of building more stable, productive and profitable businesses will be increased. Until then, in this survival of the most liquid scenario, there are going to be many companies left battered and bruised.