Tech Market Industry Update
From a recruiter’s perspective, the tech market in the first half of 2016 has been markedly different than it was last year. Last year, many employers were prepared to hire the first person they met that demonstrated prowess in all of the job requirements, and had a personality that matched the office culture. This year, employers have more often been holding out for the perfect person. In the office, we joke that someone was passed up because they, “Write with the wrong hand and were born on a Tuesday,” meaning that we felt the candidate could do the job, but the company focused on some esoteric reason for viewing them as not the perfect fit.
On the flip side, candidates are slower to move as well. We’ve seen candidates ask for a “risk premium” to move to a startup. That is, if they currently work in a large, stable company, they would only move to a startup if they could make a pretty large chunk more there. Unfortunately, salaries are usually flipped the other way: it’s the big companies that can afford higher salaries, and startups that are more cash strapped. As a result, we saw several offers declined in which the offer exceeded the candidate’s’ current pay, but did not meet their risk premium.
Why the shift? Well, we’ve all been on the edge of our seats to see what happens with regards to VC money. There are whispers of another bubble burst. When there is uncertainty, there is fear of change. When companies are uncertain about future investment dollars, they tighten up with the money they have. In short, they don’t want to hire the candidate that is a 95% match, because they feel they may not have a seat open when the 100% match comes along. For candidates, they don’t want to be the person playing musical chairs that is left standing, without a seat at the end of the game. They worry that if the bubble bursts, startups will be hardest hit, and they don’t want to be without a job in a crowded market of job seekers.
The good news is, we see the winds of fear slowly dissipating. What the VCs are saying is that they are still investing heavily – just smartly. Check out this article on Geekwire published just yesterday that explains where VC money is going. The apps market is over saturated, and people aren’t widely downloading apps anymore. You can find a great overview of the app market in the 2015 US Mobile App Report – a great read for any developer or entrepreneur. So, something like a “Yo” or an “iFart” just isn’t going to garner interest anymore. VCs are looking for solid businesses, mostly ones that have monetization strategies (though a few social networks with huge user bases may be exceptions.) By and large, the businesses in which they have already invested they see as solid, and they are reassuring these portfolio companies that as long as they hit their targets, they will get add-on rounds.
With this news, coupled with the fact that you can’t hold your breath forever – companies need to hire, and unhappy employees need to change jobs – we are starting to see more movement in the marketplace. Please check out our list of available opportunities or contact me directly at firstname.lastname@example.org to learn more.