From Boom to Gloom: Tech Recruiters Struggle to Find Work
SAN FRANCISCO — Seemingly overnight, the tech industry went from aggressive growth, a hiring frenzy, lavish perks and unlimited opportunity to layoffs, hiring freezes and to do more with less.
Nora Hamada, a 35-year-old woman who works with recruiters who hire employees for tech companies, tries to be optimistic. But the change has upended his online business, Recruit Rise, which teaches people how to become recruiters and helps them find jobs.
In June, after layoffs spread to tech companies, Hamada stopped taking on new clients and turned away from high-growth startups. “I had to do a 180,” she said. “It was an emotional roller coaster for sure.”
Across the tech industry, professional recruiters — the frontline soldiers in a decade-long war for tech talent — are reeling from a dramatic change in fortunes.
For years, during an extraordinary technology boom, recruiters were flush with work. As stock prices, valuations, wages and growth soared, companies moved quickly to meet demand and beat competitors for top talent. Amy Schultz, hiring manager at design software startup Canva, marveled on LinkedIn last year that there were more job openings for tech recruiters – 364,970 – than for tech recruiters. software engineers – 342,586.
But this year, amid economic uncertainty, tech companies have backtracked. Oracle, Tesla and Netflix have laid off staff, as have Peloton, Shopify and Redfin. Meta, Google, Microsoft and Intel have planned to slow hiring or freeze it. Coinbase and Twitter canceled job postings. And more than 580 startups have laid off nearly 77,000 workers, according to Layoffs.fyi, a crowdsourced site that tracks layoffs.
The pain was acute for the recruiters. Robinhood, the stock market app that was hiring so rapidly last year that it acquired Binc, an 80-person staffing firm, has suffered two rounds of layoffs this year, cutting more than 1,000 employees.
Today, some recruiters are adapting from blindly filling vacancies, a so-called “end-to-end” strategy, to having “more formative” conversations with companies about their values. Others reduce their rates by up to 30% or accept consulting jobs, internships or part-time positions. In some companies, recruiters are asked to make sales calls to occupy their time.
“Companies are viewed quite differently in the investor market or in the public market, and now they have to adapt pretty quickly,” said Nate Smith, CEO of Lever, a recruitment software provider.
Recruiters know the industry is cyclical, said Bryce Rattner Keithley, founder of Great Team Partners, a talent consultancy in the San Francisco Bay Area. There’s a phrase about gumballs — or “nice-to-have” hires — versus painkillers, who are employees solving an acute problem, she said.
“Lots of gumdrops – that’s where you’re going to see the impact,” she said. “You can’t buy that many toys or shiny things.”
Hamada launched Recruit Rise in July last year, when recruiting firms were so overbooked that companies had to call in favors for their company’s privilege. His company aimed to meet this demand by offering people – usually mid-career professionals – a nine-week recruitment training for technical positions.
The program has grown rapidly, forging relationships with prominent venture capital firms and the Y Combinator Continuity Fund, which has helped funnel students from Hamada’s program into recruiting jobs at tech startups in high increase.
In May, emails from companies wanting to hire its students began to dwindle. The venture capitalists she worked with started posting pessimistic blog posts about the cuts. Then the layoffs began.
Hamada stopped offering new courses to focus on helping existing students find jobs. She was quick to reach out to companies outside the tech industry that were hiring tech positions — like banks or retailers — as well as software development agencies and consulting groups.
“It was a scary time,” she said.
Pitch, a Berlin-based software startup, froze hiring for new roles in the spring. The company’s four recruiters suddenly had nothing to do, so Pitch asked them to rotate into other teams, including sales and research.
By keeping recruiters on staff, Pitch will be ready to start growing quickly again if the market rebounds, said Nicholas Mills, president of the startup.
“Recruiters have a lot of transferable skills,” he said.
Lucille Lam, 38, has been a recruiter all her career. But after her employer, crypto-security startup Immunefi, slowed its recruiting efforts in the spring, she turned to human resources. Instead of managing job rosters and finding recruits, she began implementing performance appraisal systems and “accountability frameworks” for Immunefi employees.
“My job has changed a lot,” she said.
Lam said she appreciated the chance to learn new skills. “Now I understand how to do the layoffs,” she said. “In a market where no one is hiring, I will always have a valuable skill set.”
Matt Turnbull, co-founder of Turnbull Agency, said at least 15 recruiters had approached him for work in recent months because their networks had dried up. Some have offered to charge 10-30% less than their normal rates, something he hadn’t seen since starting his agency, which operates out of Los Angeles and France, seven years ago.
“A lot of recruiters are desperate now,” he said.
Those who are still working have more difficulty than before. Job applicants are often stuck in waiting patterns with companies that have frozen budgets. Others have their offers suddenly canceled, resulting in difficult conversations.
“I have to try to be as honest as possible without putting them off,” Turnbull said. “It doesn’t make it easy to be unwanted.”