Recruiting in good times and bad
In this age of hiring freezes and inflation angst, what lessons can we learn from the recent past? Here, we dust off the history books to help you refactor and improve your hiring processes for the rocky road ahead.
Lessons from the 2008 crash (and others)
Now that we’re facing the first once-in-a-lifetime recession since… the last once-in-a-lifetime recession… we thought we’d explore how hiring teams successfully (and unsuccessfully) dealt with the ups and downs of economic turbulence in the noughties.
It’s worth revisiting this Harvard Business Review article written in the wake of the 2008-09 crash, titled ‘The definitive guide to recruiting in good times and bad’. While today’s challenges may seem unprecedented, in many ways we’ve been here before.
Those with long memories with remember the dotcom bubble crash of 2000, and as the article reminds us, there were many significant crises at the start of the millennium:
- 9/11 and the wars in Afghanistan and Iraq.
- The collapse of Enron (at the time, the biggest corporate bankruptcy in history).
- The SARS outbreak in Asia.
“The economy was in recession, and struggling firms retained only their strongest people,” the article explains. “But even before things turned a corner in 2003, the smarter and abler companies – having cleaned house and discovered what was missing from their talent pools – took advantage of the buyer’s market and began staffing for the future. By June 2003, the war for talent was on again in full force, and companies hired aggressively until the economy went into a tailspin in 2008. History will again repeat itself.”
The piece makes the case against “haphazard” hiring methods that could be lifted straight out of this decade: “Most companies react to hiring situations as emergencies; that might explain why so many do it so poorly.”
So what does a proactive approach to hiring look like? The article outlines an “end-to-end set of best practices” (see visual below) which demonstrates “the relationship between recruiting and long-term corporate performance”.
While every recession has its own particular facts on the ground, the closer you look at the lessons from history, the more familiar the story feels. Or as a certain Edmund Burke (possibly) said: “Those who don’t know history are destined to repeat it.”
Today’s state of play in hiring
So, how are things looking in today’s hiring market for tech companies? The 2022 Currents report from DigitalOcean has landed, and gives a snapshot of the challenges faced by developers, and those looking to recruit them.
One of the main themes is the “developer talent shortage, motivated largely by compensation and a desire for remote work”. The graph below illuminates some of the main motivations of job switchers:
Here is how the report describes some of the findings:
Over a quarter of developers who have been in the workforce for over a year started a new job in the past year, with developers at enterprises and startups changing jobs in roughly equal numbers. Additionally, 42% of those who haven’t left their jobs yet are considering or may consider leaving their current jobs this year. Both those who have already left and those considering leaving jobs are motivated by two main factors: Compensation and fully remote or flexible work environments. With an ongoing rise in inflation and the continuing COVID-19 pandemic, it’s clear companies need to offer high pay and work flexibility to retain developers.
As always, there’s a Simpsons gag for every occasion, so maybe we should just buckle up and enjoy the ride.