Tech Recruitment: From Post-Covid Frenzy to Caution – Christophe de Bueil, General Manager, Digital & Technology Practice, for Journal du Net
22.12.2023
Let’s rewind a few moments. Two years ago, the tech world was living through a post-Covid frenzy.
The pandemic had disrupted economic paradigms, plunging the world into unprecedented uncertainty, but the tech sector emerged as one of the few to thrive. Money was no object, valuations soared to dizzying heights, and investment funds opened their wallets generously. In this unexpected context, many scale-ups seized the opportunity for exponential growth, recruiting almost frenetically, with a near-exclusive focus on revenue, growth, and market share.
THE RECRUITMENT FRENZY AND THE ERA OF EASY MONEY
Growth at all costs. The race for valuation. EBITDA? No, revenue is what counts. Multiply it by 5, 7, 12, or why not 20! That’s the company’s worth and how much I can raise in the next funding round. But to accelerate growth, to “scale,” and dream of becoming the next “Unicorn,” tech companies, large and small, competed fiercely to attract top talent, offering very attractive compensation packages and highly stimulating projects. It was a golden period for headhunters, especially those with a strong reputation and network in the software ecosystem, particularly among U.S. hyperscalers. These ultra-powerful U.S. tech players were intent on replicating their model in Europe, recruiting the right profiles (mostly sales/business, while product and R&D remained at headquarters). At the peak of this curve (2021), nearly 70% of recruitment missions were for newly created roles.
More broadly, investment funds poured huge sums into promising but high-spending startups (the infamous reckless cash burn), contributing to an investment bubble that seemed destined to burst suddenly. The main goal was to capture market share, without concern for net results, profitability, or the sustainability of the business model.
THE BURSTING OF THE BUBBLE AND THE 2023 REPLACEMENT MARKET
As expected, this bubble burst by mid-2022. Fragile international geopolitics did not help. Funds became more cautious, valuations were reassessed, and free money simply disappeared. The tech market underwent a significant transition, moving from a period of frantic job creation to a replacement-focused market.
In 2023, recruitment dynamics changed dramatically. Companies are hardly creating new positions, let alone impulsively; instead, they focus on replacements. From 70% in 2021, the share of new roles fell to 30% in 2023! Tech companies are hunkering down, waiting for the market to recover and confidence to return. They are adopting a more conservative attitude, avoiding excessive risk. The boldness and optimism of two years ago have given way to caution and a more wait-and-see approach.
AND IN 2024, WHAT LESSONS FROM POST-COVID?
The evolution of tech recruitment over the past two years simply illustrates the sector’s inherent volatility. From post-Covid frenzy to current caution, companies are adjusting strategies to adapt to an ever-changing economic environment. The replacement market in 2023 reflects a return to reality and underscores the importance of sustainability and profitability in building strong tech companies.
2024 is expected to be a pivotal year, with a “return to normal,” striking a balance between 2021 and 2023. Nevertheless, lessons from the early 2020s have been learned; companies are taking innovative approaches to protect their bottom line. This new era emphasizes product-oriented strategies through R&D, integration of AI tools, investment in key positions with particular attention to customer retention, and upgrading technical partnerships.
For executive profiles, beyond technical skills, certain expertise may be crucial for success in such high-exposure roles: strategic leadership, innovation management, data governance, and ethical sensitivity (e.g., handling ethical issues in technology, particularly privacy, security, and responsible AI use).
In 2024, these executives will also need deep industry understanding, agility, and open-mindedness to navigate constant change. It’s no longer about rolling out a “scale plan” and replicating a model that worked elsewhere. In 2024, a Country Leader, General Manager, or CEO (global or regional) must also manage contraction, steer profitability metrics, and operate in an ecosystem increasingly exposed to market uncertainties from all directions.
There will undoubtedly be ambitious recruitment plans, driven by high growth objectives but, above all, by coherent profitability goals. Both are compatible—and even inseparable.