Hiring has come to a halt... here's why and what you can do
How did we get here?
The world we are living in currently is vastly different from the one many of us envisioned as the ball dropped in Times Square on December 31, 2019. In just 6 short months, we have experienced a global pandemic (with over 100,000 deaths in the United States alone) that has forced much of the world to live like hermits, a multitude of tragedies involving our citizens and the police that are meant to protect them, and a level of unemployment higher than it has ever been since the Great Depression. If anyone were to have told you back then that this would happen, you may have opted to have a few extra drinks in preparation and who could blame you.
No matter how you look at it, things are downright confusing right now and if you’re one of the 40 million plus out of work, finding a job can seem like an impossible task.
With so much uncertainty surrounding hiring right now, we at The Suite are here to help clear some things up. As the leading job marketplace for executive level hiring, we have a front row view of companies’ hiring activities at the leadership levels and are tapped into the job search activities for executives across nearly every function and industry.
Given our unique position to measure these activities, we thought it would be helpful to tell you what exactly what we see is going on and how companies and job seekers are reacting during this time. We hope that by giving you an idea of what is actually happening in the market, we can ease some of the anxiety and tensions that accompany broad uncertainty and help you with your search.
Companies are laying people off, but some are doing so out of fear.
It’s hard to browse a newsfeed without seeing layoff announcements. Even companies who have received enormous amounts of funding (such as Uber, Lyft, and AirBnB) and heading into February seemed positioned for stellar years, were forced to reduce their workforces from anywhere between 15-35%. So why did these layoffs happen? Many companies have used revenue loss as the primary driver and that is likely the case; however, with seemingly unlimited VC cash to burn, it’s hard to accept that a few tough months would warrant the level of exodus we’ve witnessed unless Venture Investors have begun to tighten their wallets. For some companies, this was inevitable with or without Covid. They suffered from poorly managed budgets and inflated hiring targets that were used as evidence of positive growth in the absence of real profit margins, but for companies that had sufficient funding to weather this storm the question arises: Why did layoffs still happen?
After some digging, we learned that for many companies these orders came directly from the Board, who have shifted their focus away from growth at all costs to a more conservative approach. These decisions were made quickly and based off of emotions like fear and uncertainty. These decisions were not made because Covid19 turned profitable businesses into ones that are hemorrhaging cash. Instead, Covid19 exposed the flaws in many of these business’s revenue models and made it clear that without the constant flow of new investor capital, it’d be unlikely that they would be able to stay afloat unless costs were cut immediately. Cue the layoffs. This really is about the optics. It’s hard to say if these decisions will result in these companies being able to weather this storm or if it is only delaying the inevitable (considering many of these well funded startups were never able to actually turn a profit). What we can surmise is that we are seeing that like the mythical creature they are named after, many of these “Unicorns” look more like mules with a paper towel roll tied to their heads.
HR’s hands are tied...
With Company Boards restricting the deployment of capital, hiring has come to a screeching halt, even if just for now. For HR leaders, the story they hear is the same: “Budgets are on lock and after laying off X% of our workforce, the last thing we can do is hire more talent.” And can you blame them? Imagine the headlines if Tripadvisor, who laid off over 30% of its workforce, went on a hiring spree only a few short weeks later. Companies around the country have delayed hiring plans and are preparing for what they’re calling “a wash year”, instead focusing on shifting their budgets and hiring plans towards a 2021 outlook.
Historically, HR budgets and new hiring have always been the first to get slashed. With employee and workplace happiness often taking a backseat to product and profits, it’s no surprise that companies are restricting their hiring, but at what cost. There are millions of displaced talented workers who yearn for the chance to create impact in their next role and they have very limited prospects to choose from right now.
Jobseekers are afraid to conduct a job search with so much uncertainty.
“Better to stay with a devil I know than to risk the uncertainty.” A member of The Suite recently told our team of Career Experts during a job search coaching session. Job seekers are being faced with a new reality where they’re no long able to meet the people they may be working for face to face, nor are they able to step foot in what may be their future office. Perhaps even more challenging, is the uncertainty around whether that business will still exist next month… given that many of the companies, who have laid off massive percentages of their workforces, were seen as current or likely future “Unicorns” only a few short weeks before Covid struck.
Similar to companies, job seekers who are currently employed have placed their searches on hold until after the world reopens (what that will look like remains unknown). People are busy with their children being homeschooled, family members and friends who have gotten sick, and are dealing with their new realities, the last thing they want to do is attend a new-hire orientation via Zoom and get to know a new company and business unless they have to. It’s much easier to suck it up for a few more months and keep doing the job that’s currently paying your bills. Afterall, many people feel grateful just to be employed in this environment. This gratitude for employment can’t last forever though, once the world does open back up, expect to see a mass exodus of employees who were biding their time.
We need to overcome fear
No matter which point you focus on, people are suffering. They’re losing jobs they believed to be safe, companies are no longer hiring out of fear, and job seekers are paralyzed by uncertainty. For many, life appears to be on hold and for some during prime earning years. It’s difficult to say what would fix these issues, as many of them are tied to the leadership charged with decision-making, but what we can be certain of is that people need to stop making decisions based on fear. Too many people are put at risk when they do…
What you can do to get ahead of this
If you are currently looking for a new job or are thinking about making a move, here’s a list of all the things you need to be doing.
Update your resume. Too many people procrastinate here and end up unprepared when an opportunity presents itself. You don’t want to miss out on an interview because your last minute resume mash-up didn’t properly showcase your background.
Contact your references. Make sure they are prepared for you to call on them. You don’t want the offer process to fall apart because the company you’ve spent several weeks impressing can’t get in touch with your references. Trust us, it’s happened.
Network like crazy. You need to get your name out there. Companies are no longer paying executive recruiters to search for you (and considering the money they are saving, many may keep it that way) and so you need to make sure their internal teams can find you. Attend webinars, offer to speak at events, anything to get your name out there.
Prepare yourself. This is probably the most important of the bunch. Changing jobs is hard, period. Throw in a global pandemic and a new normal, and it’s become that much harder. Make sure you give yourself enough time to come to peace with change and make sure you set yourself up for success.
Want even more guidance?
George is the CEO & Co-Founder of The Suite. He founded The Suite in order to fundamentally change the way executives manage their careers. Prior to founding The Suite in 2019, George spent several years in the executive recruiting space where he was fortunate enough to advise some of the world's leading VC & PE backed businesses on talent.