VC funding tightening although tech hiring stays buoyant
Tech investment has been volatile of late, yet still the demand for tech staff has never been higher. So how are recruiters and tech HR professionals squaring the circle of sudden diminishing returns in a disrupted tech market, with a constant demand for talent?
It would be an understatement to state that tech hiring in the APAC region is “busy” – the region faces a potential talent deficit that could hamper its global dominance of the technological sphere, and the demand does not seem to be waning.
These shortages are, sadly, now predictable, with critical shortages in essential roles across the region: “Technology Sales and Engineering talent remains the technology job categories most in demand by volume across South East Asia”.
Coupled with that is the sudden, and very recent, downturn in tech stock values and subsequent VC nervousness in the sector.
- “The wealth erased since the start of the year is significant…the five biggest tech companies have shed nearly $2.6tn. That is a decline of 26 per cent, twice the drop in the Dow Jones Industrial Average”.“JP Morgan cut its forecast for China’s second-quarter gross domestic product to a fall of 5.4% from a prior forecast of a 1.5% decline”.
And yet, despite all the doom and gloom, growth persists.
“The Asia Pacific technology market is expected to grow by 6.2 per cent in 2022 to reach US$675 billion (S$908 billion)”.
That’s a lot of conflicting information – an industry going through turbulent stock drop-offs, yet predicting to grow at near-double digit growth.
So, rather than run headlong into the specifics of the tech stock market, we’re focusing on what we know – the people and talent that make up this wonderful industry, and how they’re being affected by this contemporary balance of tech growth vs contraction.
Staff attrition, mass lay-offs and scaling back.
(Klarna, a Sweden-based fintech company plans to lay off about 10% of its global workforce)
As with many emerging companies, rapid growth can sometimes come at a cost.
As the tech world reacts to the global need for rapid digitisation tools, platforms and strategies, companies at the vanguard of providing that change are growing, exponentially. But that growth is not infinite, and some APAC offices are starting to feel the pinch of over-extension, even when layoffs are half a world away.
- Only this last week at the end of May, “Klarna, a Sweden-based fintech company in the buy-now-pay-later space, announced plans to lay off about 10% of its global workforce”.
- Crypto exchange and custodian Gemini was one of the latest to announce job cuts of about 10% of its workforce
- Zenius, an Indonesian EdTech startup, is laying off over 200 employees (20% of its 900+ workforce)
- Tesla CEO Elon Musk announced last Friday that the company plans to cut 10% of jobs for salaried workers
On and on the litany of tech downsizing goes on.
And yet tech demand is still higher than ever.
More tech talent demand than tech talent supply.
- Ravi Menon, from the Monetary Authority of Singapore (MAS) estimates more than 3,000 jobs in tech will be created this year, mostly focused on digital financial services, trade finance, blockchain technology, and AI to detect fraud and money laundering.
- “The Australian economy is forecasted to need 6.5 million newly skilled and reskilled digital workers by 2025, which is, effectively, 79% more than the current numbers”.
- “India’s telecom and technology sector is likely to face a 28% shortfall of skilled workers in 2022”.
- “Significant talent deficits in manufacturing and TMT in China and Japan (3.2 million combined by 2030) puts the region’s global dominance at risk”.
The APAC region, as noted in the exhaustive McKinsey report What is driving Asia’s technological rise?, is still the predominant global tech creator, even with the impact of Covid-19 and isolationist trade policies in the USA (albeit those are lessening). Asia dominates the business of tech provision. It has been for a decade and will continue to be into the future.
- “Over the last decade, the region has accounted for 52% of global growth in tech-company revenues, 43% of startup funding, 51% of spending on research and development, and 87% of patents filed”.
Key to that growth has been increased collaboration with the global tech market, resilient supply chains, massive production and manufacturing base and, most importantly, a new generation of technologically gifted people, supported by governments who are focused on regional connectivity and collaboration, regional skills growth and intra-regional capital investment.
Overall, the APAC technology market is stated to continue to grow, even with hiccups in stock market valuations and cautious VC funding.
Need help in finding IT Sales or Technology talent within Singapore or the wider Asia Pacific region? You can count on the team at Datasearch Consulting to support you through the process.
While the talent market has undoubtedly become more competitive for both recruiters and HR professionals, we remain dedicated to connecting our partners with the right sales and technology talent.
Connect with us at Datasearch Consulting for more information about our recruitment solutions for technology vendors.
Alan Anwar is the Managing Director at Datasearch Consulting, a leading executive recruitment firm specialising in the Financial Technology & Data sectors.
You can download their FREE comprehensive guide on “The Complete Guide to Hiring Fintech & Data Talent – 5 Proven Steps to Secure the Best Candidates Possible” here. Alternatively you can view the Datasearch Consulting website or contact them directly on firstname.lastname@example.org for a more detailed discussion
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