If an observer following the headlines coming out of Silicon Valley in recent months didn’t know any better, they would have to assume the bottom is currently dropping out of the technology industry. An estimated 70,000 jobs were shed by Google, Microsoft, Amazon and other tech giants in 2022, and some predict that the sector isn’t finished making significant cuts. All of this means talent is leaving California.
Yet a deeper analysis of the space reveals a less-discussed resilience (overall employment is down only about 5,000 jobs) and one gargantuan elephant in the room: a sweeping redistribution of tech talent that appears to be happening before our eyes. The recent migration of tech talent to Austin-area companies and startups is one example of this phenomenon, but lately, a new trend has emerged: traditional, publicly traded corporations best known for their work outside the technology space are suddenly showing interest in top tech talent – and receiving it in return. This competition is also a contributing factor as to why tech talent is leaving California.
A Case Study: Detroit Automakers
Top American automakers, quite literally, have been nuts-and-bolts operations for decades. But recent advances in vehicle software, automation, and electric power – as well as the growing expectations of auto consumers – have forced Detroit to rethink traditional hiring practices. According to the Detroit Free Press, for example, General Motors confirmed that it has thawed an existing hiring freeze in order to make a run at the tech talent made available by the recent layoffs in the space.
“Two years ago, a software developer or engineer in Silicon Valley was not taking GM’s call,” Dan Ives, managing director and senior equity analyst at Wedbush Securities, told the Free Press. “Today, they are actively looking to work at GM. GM has fully bet on their electric vehicle future and under the hood they are a very mature company that is essentially an entrepreneurial startup-like in spirit.”
GM is hardly the exception to the rule. Not only are familiar automakers such as Ford, Nissan and Volvo vying to become the leader in EV and tech-forward automobiles, but newer entries like Tesla, Rivian, Nikola and Lucid are driving the demand for engineers, programmers and other tech talent in today’s version of the space race. And that’s just in the automaking space. Ives says that for every 10 workers cut loose by tech organizations, one or two will move on to “transformational industries,” including but certainly not limited to electric automakers.
The Next Move for Tech-Thirsty Hirers
As our world becomes increasingly computerized, digitized, electrified and automated, entire industries are being overhauled to make way for more productive, efficient and affordable technology solutions. Those developments will unfold within the tech sector, of course, but they’ll also extend far beyond. More businesses than ever now require tech talent to compete – and their corresponding HR departments and hiring staff often lack experience in identifying, vetting and bringing aboard those workers.
Simply put, these organizations may not fully understand their labor needs on the tech side. Companies unaccustomed to building out or incorporating tech initiatives into their core business run the risk of over- or under-hiring, particularly if they don’t have a firm grasp on their new hires’ capabilities and limitations. In cases like these, contingent labor is frequently a company’s best option.
Contingent labor offers a publicly traded company the freedom and flexibility to make adjustments to a workforce as needed, materially reducing its financial risk and allowing for quick responses to changes in the economy, market or organization. A third-party talent cloud such as PeopleCaddie can help your business identify and connect with top-quality technology contractors – and even assist you in creating a contingent labor strategy that meets your needs – no matter your familiarity or comfort in hiring tech talent.