Everyone wants to work for big boring companies again

(Bloomberg Opinion | Conor Sen) – After the 2008 recession, large, well-established companies went out of style. Their dusty cultures were behind the times and they seemed stuck in a cycle of perpetual layoffs and restructuring. Tech startups were the perfect place for new generations of workers. Their foosball tables, bean bag chairs and modern values ​​respond to the sensibilities and priorities of young people.

In 2022, the pendulum swings back as the overall labor market remains strong, but the outlook for startups becomes more fragile. There’s never been a better time to go to work for a great company.

If your career revolves around the startup scene, it’s understandable that you’re pessimistic about the state of the economy. After a decade of boom, most tech-related startups that have gone public in the past two years now have shares are trading below their listing price. Silicon Valley investors expect this will hurt the ability of startups — especially unprofitable ones — to raise funds, so they’re telling companies to prepare for a downturn. There was over 15,000 tech layoffs announced in May.

We don’t see the same weakness in the labor market in general; it’s actually hard to see any signs of weakness. The US economy added 390,000 jobs in May, boosted by strong industrial sectors, white-collar jobs and improved government hiring. The retail industry lost 60,000 jobs, possibly due to some of the well-publicized inventory issues it faces as consumers shift spending from goods to services. So I would say 390,000 actually underestimated the strength of the report. The Indeed.com job website tracks weekly job postings and there are many of themeven for software development roles.

Here’s an example of the new management: A former heavy bank like Citigroup Inc. has a growing need for tech workers at a time when cryptocurrency exchange platform Coinbase Global Inc. is struggling. Citigroup announced this week that it is hiring 4,000 additional technology workers as it seeks to modernize the way it does business. Coinbase, on the other hand, is in the midst of a hiring freeze as its business suffers from the broader cryptocurrency crisis. Coinbase is perhaps the hottest company that has spent $14 million on a Super Bowl ad, but it only has 5,000 employees; Citigroup’s job announcement is equivalent to 80% of the entire Coinbase workforce.

Current labor market dynamics should lead employees to ask themselves which career path offers the most opportunity and long-term security. While some startups will succeed regardless of the state of the economy, many still need more time and money to grow their business. This fundraising has become more difficult as startups are considered a disadvantaged asset class and investors are becoming more skeptical.

Meanwhile, conventional corporate employers have steadily increased pay and benefits over the past decade to be more competitive with Silicon Valley.

The demographics of the workforce that can choose between jobs at startups or at large corporations has also changed since the early 2010s. This wave of young millennial workers in their twenties who spent time in WeWork offices or tech incubators a decade ago are now in their 30s and, in many cases, have children, mortgages and retirement savings to consider. Being paid a higher, stable salary rather than stock options, and having generous 401(k) and healthcare plans becomes more attractive as you head into middle age.

So there’s no need for workers to get too caught up in the anxiety and negativity emanating from Silicon Valley these days. These companies have had a phenomenal run, but more boring companies in other parts of the country also have staffing needs, especially in technology. They are ready to take advantage of any weakness in the tech industry, no matter how short. And in many cases, it’s probably a better deal for workers, too.

Comments are closed.