The labor market has experienced many seismic shifts in the past two years. While the technology industry has always been fairly lucrative, tech workers have had more bargaining power due to the tight labor market. This bargaining power has resulted in more perks, including flexible work schedules, remote and hybrid work arrangements, and higher salaries. Now, however, employers are pushing back.
How did we get here?
The COVID-19 pandemic led to a hiring spree for many tech companies. The global health crisis pushed much of our daily lives online, from students attending school to shoppers purchasing goods. With such high demand for employees in technology roles, these workers had more leverage to name their price and pick their perks. Many workers, for example, prefer to work from home rather than in the office. In many cases, the flexibility allows workers to live and work wherever they would like.
Why are employers pushing back?
Today, recession fears are looming. Inflation and uncertainty are high. Many employers are dialing back hiring (e.g., Meta, Alphabet, and Uber), and some have even rescinded job offers. Twitter, Redfin, and Coinbase are just a few examples of companies that have withdrawn job offers. This cautious hiring approach comes as other companies, including Netflix, Peloton, Microsoft, and Carvana, have announced layoffs.
While tech workers are still in demand, many tech companies are pushing back because of this economic uncertainty. These recent changes in hiring suggest that executives are expecting and/or preparing for an economic downturn. Rescinding a job offer (i.e., revoking an offer to a candidate) is a dramatic move that may indicate a business’s outlook has changed quickly.
With employers having the upper hand, remote and hybrid work arrangements may not be guaranteed. Job candidates that want to work in the office may have a competitive edge over other candidates.
What’s the outlook?
Many businesses are trying to better anticipate market changes so they can remain nimble. The pandemic has taught us just how quickly things can change. But it’s not all bad news. Many roles are open in the tech industry as job postings continue to increase. Microsoft, for example, says its total headcount will increase despite recent layoffs.
In-demand tech jobs include database administrator, information security analyst, software developer, systems administrator, computer programmer, web developer, and more. Some recruiters say workers that are skilled in artificial intelligence and machine learning can still name their price.
In the Classroom
This article can be used to discuss recruiting and compensation (Chapter 10: Managing Human Resources).
Why have tech workers had strong bargaining power in recent years?
Why is bargaining power shifting to employers?
Do you think the remote work trend will continue? Why or why not?
This article was developed with the support of Kelsey Reddick for and under the direction of O.C. Ferrell, Linda Ferrell, and Geoff Hirt.
Katherine Bindley, "Tech Workers Long Got What They Wanted. That’s Over," The Wall Street Journal, July 15, 2022, https://www.wsj.com/articles/tech-workers-long-got-what-they-wanted-thats-over-11657877406
Katherine Bindley and Angela Yang, "More Companies Start to Rescind Job Offers," The Wall Street Journal, June 22, 2022, https://www.wsj.com/articles/more-companies-start-to-rescind-job-offers-11655865283
Sarah K. White, "The 10 Most In-demand Tech Jobs for 2022 — And How to Hire for Them," CIO, January 20, 2022, https://www.cio.com/article/230935/hiring-the-most-in-demand-tech-jobs-for-2021.html