We are currently going from the tightest job market in decades at 3.5% unemployment reported in February of 2020 up to as high as possibly 30% unemployment according to the president of the St Louis Federal Reserve yesterday. That would be worse than what we saw during the great depression. But if you close x% of businesses across the country to slow a pandemic, that's what happens I suppose.
Given this, many employers will probably be doing 3 things soon depending on how long this goes on:
But, a broad across the board spike in unemployment is not the whole picture.
So obviously we have a couple of types of businesses that are taking massive hits: Hotels, Restaurants, Bars, and Airlines to name a few. But there are also some businesses that are experiencing massive surges in demand, things like Healthcare, Grocery, E-Commerce, and any kind of software or service related to working from home.
Since this blog is about technology and tech recruiting let's focus specifically on that.
Anecdotally I've not heard of many people working in software losing their jobs right now outside of small consultancies who had contracts dry up, and that's only through twitter. I don't know anyone personally who is a programmer who has been layed off yet (but unfortunately we are probably just at the very beginning of this crisis).
You can think of the job market for software developers divided into a couple of different types of work:
So far I've been hearing of issues at type #3, which makes sense. If a business is running into trouble and they can postpone or cancel and upcoming project, they might be looking to do that.
Most software businesses are special in that typically have few capital expenditures they need to make. They don't need to build factories. They don't need to have warehouses full of inventory.
The biggest cost most software companies have is paying salaries of employees. In general, if you think this thing is going to blow over in 3-6 months it doesn't make sense to lay people off. It might make sense to stop hiring though.
Most software projects are multi-year endeavors and if you lose headcount you lose experience and skill and ultimately risk projects failing.
Before Covid-19 I was working remote, and after Covid-19 I am still working remote. I was more productive working remotely and it didn't really effect the way I did my job much other than the fact that it makes me think about work a lot more (which is a good deal for employers).
In general there are ton of tools to help software developers work remotely, so it shouldn't be a point of hesitation for most employers.
I have noticed that in recruiter messages I'm getting, I now see lines like this:
Interviews and initial work will be virtual, but eventually they would like this person on-site.
I've spoken to a few recruiters lately and anecdotally, yes hiring is slowing down. You probably already know that.
Especially for FTE roles I think hiring is going to slow way down.
The only upside to this I can think of for recruiters is that because there is so much fear and uncertainty out there candidates are bound to be much more likely to take your calls. Now might be the right time to try to reach out to people you think would previously have been difficult to get in touch with. I would be taking every recruiter call I could right now if I didn't have a contract.
This pandemic happened so suddenly it caught everyone off guard. People don't have anything recent to compare it to and the actions governments around the world have taken are pretty much unprecedented.
This whole thing happened so fast that nobody has any data or numbers to even know what the impact is yet.
For example, I was looking for an article to cite for this and found a CNBC article that is all of two weeks old quoting:
The global uptick in gross domestic product (GDP) could be as low as 1% this year
I think just two weeks later nobody has projections that are anywhere near that good. An increase in GDP? Really? So things are changing fast and this uncertainty is definitely weighing on hiring.
I don't have anything to say that can make it better, only that I think in many ways the tech job market is maybe slightly insulated from what is going on and I believe it should hold up longer than other parts of the economy.