Global economic downturn presents small businesses a ‘once in a generation’ hiring opportunity
Smart hiring practices and investing in high-demand skills as the world falls into recession could help SMBs thrive in the long term, says Randstad
Small businesses are in an unprecedented position to hire talent that in normal circumstances would be scooped up by big tech, according to recruiting giant Randstad.
The ongoing cost of living crisis has caused alarm for almost all sectors of the economy, and tech companies are among the many facing a downturn. But Randstad, in an assessment of the market landscape, argues that employers in small and medium-sized businesses (SMBs) should use this period to their advantage.
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So far in 2022, 37,000 tech workers in the United States have lost their job, and some of the largest tech firms in the world including Microsoft and Nvidia have recently announced hiring slowdowns. In August, Google asked its employees to come up with ideas for improving productivity, dubbed a ‘Simplicity Sprint’, and stated that the move was the result of mismatch between employee numbers and output.
The UK has also had its fair share of disruption, with 100 layoffs recorded at health app developer Bablyon, 150 layoffs at digital assets trading firm Blockchain, and a further 200 layoffs at events firm Pollen. However, online retailer Cazoo was one of the worst hit, with 750 redundancies announced in June.
As the bigger firms look to cut back, many smaller businesses and startups are considering ways to survive a recession, and strategic hiring while the market is down could prove crucial to long-term gains. Well-placed investment now might give small businesses the freeboard they need to not just continue to exist beyond the crisis, but come out of it in a better position than before. Randstad, the world's largest recruitment and HR service provider, maintains that while the large firms suffer losses, small firms could reap the rewards by growing their skilled workforce.
“For the last decade, tech companies have hired tens of thousands of workers,” stated Adrian Smith, senior director of operations at Randstad.
“But in the post-pandemic economic crunch, technology companies worldwide are announcing hiring slowdowns, freezes and, in some cases, layoffs. And, of course, when America sneezes, the rest of the world catches a cold. We’ve seen 2,000 redundancies in London since the start of the year and there will be more to come.
"Now, smaller tech employers have a once-in-a-generation opportunity to hoover up top talent that would normally be inhaled by the big tech giants. For too long, a technology skills shortage has been a risk to business and economic growth; and there remains a strong economic need for more skills for digital transformation projects.”
Last year, the UK government charted a 50% rise in overall tech job vacancies in the UK, at 160,887 in November 2021. Tech job openings make up 12% of all UK job vacancies, and a recent MuleSoft report emphasised that IT leaders are finding it harder than ever to hire tech workers.
Randstad’s assessment of the landscape also recommends that SMBs looking to attract desirable candidates should first improve their internal skills, with schemes such as standardised training in high-demand skills like data analytics. Smith also suggested that SMBs “could try accessing a wider talent pool by considering contractors. This is potentially a useful ‘try-before-you buy’ strategy.”
Virtual CIOs are one example of this strategy, in which companies hire contractors as remote or temporary CIOs in order to facilitate digital transformation and productivity needs. Some have also argued that the skills shortage that UK firms are experiencing can be addressed by a stronger focus on the tech sector in the education system, and that the government is currently not doing enough to encourage tech training earlier in life.
“In the long-term, as a country, we must invest more in education as well as research and innovation. We also need to make a job in tech more appealing to women - it’s a male dominated environment and can be intimidating for young women without many female mentors,” Smith acknowledged.
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