The Perfect Storm Causing an Insane Tech Hiring Market

We are in the most heated tech hiring market of all time. Here’s what you need to do and what companies do which are still growing.

Since publishing this article, I published more data on the hiring market:

I have been debating writing about the elephant in the room; hiring in tech and how hot the market is. I’ve talked with dozens of hiring managers across all continents. All say the market is burning hot everywhere. This newsletter issue covers:

  • Observations on what is happening in the tech hiring market, with quotes from hiring managers and job seekers.

  • Root causes as I see them on why the tech market is hotter than ever before, even more so than during the Dotcom Boom.

  • Numbers on what this all means for compensation and demand for senior tech talent pay increases. Many of these numbers are approximations, but they give an idea of where we are.

  • Advice for hiring managers on how to stay afloat. How to retain your staff, and what to do if you want to hire, and also the sensible approaches of companies which keep growing in this environment.

  • Advice for tech workers on how you can use the current situation to your advantage.

What is Happening?

If you are a hiring manager who needs to hire, you’ll know what I’m talking about. There is a fraction of the usual candidate applications, closing is more difficult, candidates ask for compensation outside target levels. You might have had people verbally accept and then turn around and decline for a better offer. A few quotes from hiring managers describing the current market:

Never before has it been this challenging, and in all regions. I remember seeing a heated market before in India a few years back. However, the current environment is many times magnified. We are seeing the same type of intensified competition in the US, UK, EU, Eastern Europe, South America... Heck, just about everywhere. We are predicting this to last into late in the year.” – a tech company with offices on most continents.

“We are finding the market to be superheated for all of our geographies. Candidates often come to interviews with more than one offer and/or have very high compensation expectations. Many are unwilling to hang around for a lengthy interview process.” – a company with EU HQ and offices across US, Europe, India.

“It’s very difficult to find senior engineering talent. We have had a fullstack position open for two weeks and got 5 applicants in total. In the past, we’d easily get 20-30 in a week.” – a B2B unicorn in the Netherlands.

“Our interview process is very short, yet we are still seeing people drop out, because they already have multiple offers. We've also lost a person that went to Twitter to work for them remotely. The competition has intensified with more Silicon Valley companies allowing remote work.” – a scaleup in Germany.

“We are finding the market and compensation expectations so heated in India that we have started to ramp up recruitment in South America and Eastern Europe instead.” – a company with US, Canada, and India offices.

If you are not a hiring manager, but have a few years of professional experience, there has never been a better time to make a job change for a significant raise, or to get an internal raise. When I say “significant” raise, I got messages from engineers with raises from 50% to 2.5 times their current compensation when switching jobs. This is happening across all regions.

A few quotes relevant for employees:

"I cannot believe the compensation numbers non-senior folks get. We offered $125K+ equity for an engineer with 3 years of experience. They were about to accept when Reddit came in with a $230K offer that they took ($160 base + $70K stock/year). The crazy thing is that as an engineer with 4 years of experience, I made $140K ($105K salary, $35K stock) as an L4 at Google in 2010. Inflation-adjusted, this is $185K, but this was the very top of the market. The current market is truly insane." – a hiring manager on the US East Coast.

“Startup compensation is crazy. I got a full-remote offer of €135K + 0.5% in a seed-stage US company and a €210K offer (€135K base + €25K bonus + €50K/year stock) from a US public company with a hybrid office policy. I liked the startup better, but I told them I’d take the higher offer from the public company. The startup came back with €200K salary and 0.2% stock offer“ – a staff security engineer in Germany.

Root Causes

It all started in March 2020, with the Covid-19 pandemic and the sudden rise of remote work. However, while people might assume that remote work was the trigger that started to push the market up, I disagree. Working from home is just one of the several root causes that came together. But one thing is certain; the trigger was Covid-19.

So, what are the root causes, and how are companies responding who are still able to hire, in the middle of this perfect storm? Let’s dive in and go deep…

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