This is a Guest Blog by Ms. Yogita Tulsiani, MD & Co-founder, iXceed Solutions (Global Tech-Recruiter Provider).
As technological advancements, fierce global competition and throes of the global pandemic challenge organisations worldwide, layoffs have become a customary response for most companies. In an ever-evolving world of work, episodic restructuring and routine layoffs disrupt the hiring patterns and impact the talent market. The post-pandemic reset has led to an economic slowdown, triggering a wave of layoffs in the startup ecosystem. According to research, some of the most prominent Indian startups have laid off around 6,000 employees in 2022.
Within a few months, the talent market has pivoted from the ‘Great Resignation’ towards the ‘Great Layoff’ phase. Despite mass layoffs and job freezes, the overall job market is still red hot and will not usher in a hiring slowdown. According to reports, a 20-25% increase in the hiring of mid to senior talent is expected in well-funded startups in the ongoing quarter. With myriads of job openings and salary hikes, the ground reality of hiring seems to remain constant and unaffected by the layoffs.
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Tracing the root of layoffs
As liquidity crunch looms large over the horizon and a global technology stocks downturn stagnates funding in the startup ecosystem, startups have resorted to layoffs. A decline in investments, a pullback of global capital flows and venture capitalists’ portfolio rebalancing has led to cost-cutting measures like layoffs. Additionally, many retail and tech companies witnessed a boom in demands from customers during the pandemic, which compelled them to hire staff rapidly. For instance, Amazon nearly doubled its workforce during the two years of the pandemic to make up for Covid-19-related absences and meet burgeoning consumer demands. But as the pandemic subsides, several companies like Amazon have gone from being understaffed to overstaffed.
A tale of hiring dichotomy
Despite layoffs across the startup ecosystem, the talent market has been projecting a strong and steady hiring trajectory. IT function followed by sales and business development have continually added employees across all levels. At the same time, many startups have strengthened their business operations with addition to leadership roles. The war for talent is still raging strong as companies across the globe compete neck and neck for the best talent in a shrinking talent pool. With the advent of the metaverse, proliferation of D2C startups and an ever-increasing demand for technologies like automation and AI, hiring intent continues to go strong in the talent market.
Why do salary hikes fail to surprise?
A perennial talent scarcity has compelled several organisations to eye global talent and lure the best candidates with flexible working options and bigger paychecks. With the advent of hybrid working models, talent continues to be discovered globally and the best talent is awarded higher remuneration packages. To retain their best-performing talent from the ensnares of talent poachers, several organisations are also rewarding their employees with retention bonuses and more than generous salary hikes. Despite layoffs in many prominent startups, the bulk of the startups are performing well and continuing to provide salary hikes and hire talent.
Better perks & bigger benefits in store
Owing to exponential growth during the pandemic, record-high spending and the need to retain the best-performing talent, the trend of better perks and bigger benefits is likely to continue in the global talent market. Additionally, as companies worldwide get accustomed to hybrid work models, they are willing to offer perks like remote working options, flexible work schedules and condensed work week arrangements to lure new talent and retain the existing staff. Furthermore, companies are moving beyond higher remuneration and salary hikes by offering benefits like employee stock options, paid vacations, health insurance benefits etc., to their employees.
Key Takeaways
As organisations grapple with an ever-shifting economic landscape and cut-throat global competition, they contemplate whether their current workforce will lead them to success or downfall. Employees, the lifeblood of every organisation, will continue to be treasured, retained, and hired despite some occasional layoffs. As organisations burn with desire for technological transformation, the talent market is kindled with the heat of the intensifying competition and hiring will remain a constant cure.
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