More than 200,000 tech industry employees have been laid off in 2023. Tech giants such as Google’s parent company Alphabet, Meta, Spotify, and Zoom have laid off tens of thousands of workers. For years, tech workers were operating under the assumption that job security was a given in their industry, but recently companies have gotten more aggressive with cutting costs through cutting back perks, benefits, and employee headcount.
Women and other underrepresented groups have been disproportionately affected by tech layoffs, which does not bode well for an industry where these groups were already severely underrepresented. Before the layoffs, Black and Latine Americans held 7 percent and 8 percent of tech jobs, respectively. Some companies began making noticeable progress in representation after 2020. for example, increased their Black representation from 6.9 percent to 9.4 percent and Latine representation from 5.5 percent to 8 percent in 2022 before the recent leadership changes. Organizations including Apple, Microsoft, and Alphabet pledged tens of millions of dollars to support their DEI commitments, but the layoffs are undoing the strides these organizations have made in recent years, and it will likely take years to recover from these developments.
An estimated 45 percent of people who lost their jobs in layoffs this year were women, despite the fact that they make up a much smaller portion of the industry. A study conducted by Paychex revealed that almost 75 percent of women in tech fear being targeted by layoffs. In 2022, Black and Latine workers accounted for 7.42 percent and 11.49 percent of laid-off tech workers. One reason for this is that companies often take the “last in, first out” approach when determining who is going to be laid off. Although this policy was adopted to encourage “neutrality” during layoffs as a response to age, gender, and ethnicity discrimination lawsuits, it does not consider who is more likely to be the “last in,” i.e., underrepresented employees. After being shut out from tech for years and with companies focusing on diversity recruitment more recently, women and underrepresented groups are statistically more likely to be new hires. This permeates all levels of an organization, from entry level to the C-suite.
These layoffs have drastic implications for the state of diversity and inclusion in tech but also offer an opportunity for other industries such as financial services, health care, and insurance to attract the top tech talent that has evaded them for so long and to strengthen their own DEI efforts in the process. With the right strategy and company culture, organizations can recruit and retain tech talent looking to escape the increasing volatility of their industry.
The job market’s hostility to tech employees is mostly concentrated within that industry—IT is still a fulfilling and lucrative career path in the United States if workers are willing to work technical jobs outside of what has long been their preferred industry. As recently laid-off workers are now given the time to reset and reevaluate what they are looking for in a job, the stability offered by other industries may be a qualification that they never had to consider before. However, stability alone is not going to attract and retain these workers. The tech industry can rebound just as quickly as it collapses.
So, what attracts these workers to the tech industry to begin with, and what can be adopted in your own organization? Here are five key areas to keep in mind as you evaluate how attractive your organization is to these workers:
Hybrid and Remote Work Flexibility
Hybrid workplaces and flexibility were the standard in the tech industry long before the pandemic and will likely continue to be. In order to remain competitive for top tech talent, flexibility is a must-have. When employees are given the opportunity to prioritize getting their tasks done over working a certain number of hours, through flex hours and remote working opportunities, they experience a much higher level of work-life balance and job satisfaction. According to the Harvard Business Review, two-thirds of employees say they want to keep a mix of remote and in-office work, and 46 percent said they would consider leaving a company that stopped offering the flexibility to work remotely, so companies have an incentive to embrace flexibility as they try to attract new employees.
Talent Development and Career Growth
The spirit of innovation and a desire to be on a continuous learning path are main points of attraction for the tech industry. McKinsey research revealed that the lack of professional development is a top reason why employees have left or will leave their employers. This is especially important when it comes to technology, because what’s best-in-class is constantly changing. Employees (and their employers) don’t want to be left behind. Consider building internal development programs, partnering with local technology institutions to ensure your employees are consistently in tune with the progression of the industry and have the skills they will need to be successful. Once employees hit a wall where they feel like they can no longer progress and grow, attrition begins. Eighty-five percent of 2022 Seramount Inclusion Index Companies offer formal one-on-one mentoring, and 66 percent offer formal sponsorship programs. Mentorship and sponsorship are an excellent way to upskill employees across cross-functional lines. Eighty-five percent of 2022 Seramount Inclusion Index Companies offer formal one-on-one mentoring, and 66 percent offer formal sponsorship programs.
Purpose
Increasingly, workers are looking for job opportunities that are more purpose-based than their previous roles. Tech Jobs for Good, a job board that focuses on mission-driven employers, saw a 40 percent increase in new job seeker profiles in May of 2022 and continues to see large growth in new profiles after major layoffs. Purpose is critical when trying to remain competitive for younger tech workers. A February 2023 survey from Carhartt showed that 44 percent of Millennials and Gen-Zers reported that finding a job that aligned with their values was their top challenge in the job market. Furthermore, companies with the most attractive image to young employees have ESG scores 25 percent higher than the global average. Social impact should be a cornerstone of your recruitment and communications strategy. In fact, 96 percent of CEOs on Seramount’s 2022 Inclusion Index communicate support for DEI on their company’s website, and 87 percent communicate support through social media channels. Are your strengths highlighted on your website? Are recruiters equipped to talk about it to potential candidates?
Creative Benefits Packages
It’s no secret that perks and benefits were a main draw to the tech industry. In a moment where big companies are pulling back, the playing field is being leveled for other industries. Companies do not need to add every trendy perk to keep up, but a refresh in your offerings will go a long way toward attracting new employees and retaining current ones. For example, PTO designated for social impact work, professional development funding, pet insurance, and mental health resources are all ways companies can have a positive impact on their employees’ lives. Additionally, helping employees pay down their student loans is becoming a more common benefit among both Fortune 500 and smaller organizations. Consider what your employees want and need and what your organization can afford in order to remain competitive in the benefits space.
Commitment to DEI Progress
Bringing underrepresented tech employees into your workplace requires a strong commitment to DEI. According to Seramount’s From Pledge to Progress report, 85 percent of employees are committed to helping their company fight racism and injustice within the organization. Similar to purpose, DEI is especially important to young employees. A recent study from Quantilope reported that 80 percent of Gen-Zers said it’s important for brands to address diversity, equity, and inclusion. New employees from the tech industry can give new life into Employee Resource Groups and other inclusive programming and initiatives. DEI should be another selling point of your organization during the recruitment process. However, it should remain honest to the culture of your company. If the current state of DEI in your organization isn’t advanced enough to be a highlight of recruitment, be sure to explain what your commitments are and the strides you are making to get there.
Interested in learning more about how the talent experts at Seramount can help your organization’s recruitment and retention strategies? Contact us.
