Market in Transition: What Does This Mean For Recruitment?

With inflation at its highest since 1982, we want to make sure that both our clients and candidates are prepared for a shift in the PropTech market. Given the current economic climate, it is safe to assume at least two-quarters of negative GDP growth towards the end of this year, and into the beginning of 2023. So, what does this mean for the PropTech industry?  

In short, a recession in recruitment means more people are looking, and fewer companies are hiring. But this shouldn’t be a turn-off. An article published by the Financial Times (Dave Lee, 2022) uses statistics provided by Layoffs.fyi, a website that tallies job cuts, to show ‘the losses rippling through the tech sector have yet to match the obliteration seen during the early days of the Covid-19 pandemic’ (Layoffs.fyi cited in FT 2022). The article discusses the effect that the global pandemic had on the Tech market, including the shift to remote working that many tech companies in the US have started offering, stating that ‘36% of job postings in tech offered the option to work remotely’ (ZipRecruiter cited in FT 2022). This is a great example of companies adapting to the post-pandemic market without having to scale down their business. The good news is, that by analysing trends and key market insights during the pandemic, we can stay ahead of the curve.  

Now more than ever is the time to ensure we are listening to our candidates; to better understand their needs, reasons for leaving their previous jobs, and what they are looking for going forward. An article published by GrantThornton (May 2022) provides a statistic taken from Bright Network that states, ‘graduate confidence in finding a job has returned to pre-COVID-19 levels of 60%, having dropped to 30% during the pandemic’. A recession often breeds panic, but an article published by Protocol (Amber Burton, 2022) mentions Richard Cho, the chief recruiting officer for Gem, and his views on the tech industry during economic instability; ‘slowing down can produce a more thoughtful and productive hiring process, but companies should still be as responsive to candidates as possible’. Having worked in the tech industry during the 2008 financial crisis and the subsequent recession that came afterward, Cho provides some great advice for companies in the tech space; ‘as companies start to talk about slowing down, or freezing or laying off hiring, you’re going to start to see a lot of the quality of inbound candidates increasing exponentially’ (Burton, 2022).  

Candidates will be changing jobs for a whole host of reasons:  

• Greater stability in job function and compensation; often moving from start-ups into larger companies.  
• Laid off from another job.  

• Making a change to achieve their goals.  

A huge advantage of our consultants being 360-degree PropTech recruiters means that we can communicate both with our clients and candidates regularly. This is especially important during a time of economic instability, as the industry is unpredictable and always changing. Our job is to make both the hiring process easier for clients, and the job searching process easier for candidates. Communication and regular updates are essential for both sides of the business.    

Tips for clients when hiring:  

• Keep processes moving; just because there are more candidates, doesn’t necessarily mean you can afford to keep people in the process for longer periods. Momentum is crucial.
• Now is the time to partner with recruiters to find excellent talent in competitors who are struggling. We can approach people you don’t want to go to directly!
• The market is still buoyant – there is plenty of dry powder to be deployed, so if you are looking to grow from a people talent perspective, don’t assume that the right person will not have multiple other businesses after them too!
• Think about other elements that can attract candidates – it’s not all to do with money: progression; holiday; OTE; equity; additional benefits; culture; location (remote/hybrid).
• Struggling financially but need to make a key hire? Look internationally – other markets will have excellent talent at cheaper price points. If you can be flexible, then a whole wealth of new, cheaper talent could be open to you.

• Partnering with a recruitment business you trust. Our consultants are experts in the PropTech industry. We can use our specialist experience to find you the top talent in the space.   

On the candidate side, we understand that economic downturns cause companies to focus on high-quality candidates who can fill multiple needs, rather than dividing those roles across multiple hires. In this way, finding the top talent in the industry will be more competitive than ever, so it is vital that both your CV and LinkedIn profile are updated regularly and contains the experiences that you believe will stand out most to prospective employers.  

Tips for candidates when ‘selling themselves’:  

• If you’ve worn multiple hats, helped build processes, helped add structure, helped build out a team, etc capitalize on it! Candidates who can operate at a fast pace whilst wearing multiple hats will be more valuable than ever.  
• Be open-minded. As the PropTech space has been on an ever-upward trajectory of exponential growth for the last few years, we have seen people with direct PropTech experience asking for increasingly inflated amounts of compensation. These numbers are likely to plateau if the recession does hit, so consider what means more to you and how they should balance between salary and status.  
• One thing is for sure- VCs have already raised their inaugural funds. Regardless of what happens, whilst investment into the space may be more strategic than ever, and slower, it will occur. Don’t be too put off joining start-ups- especially ones that have already partnered with great VCs.  

A recession can be intimidating, unpredictable, and tumultuous – but it doesn’t need to be! We at LMRE are here to help.   

References 

Amber Burton, Protocol (May 11th, 2022) ‘Prepare for the rebound: Why a veteran recruiter isn’t worried about the tech hiring slowdown’. 

David Lee, Financial Times (June 10th, 2022) ‘How bad is Big Tech’s hiring freeze?’ 

GrantThornton (19th May 2022) ‘What would a recession bring for recruitment companies?’.