Upsidedownsizing: Turmoil in Tech (Part Two)

Tech stocks had a rough year in 2022: the tech-heavy NASDAQ index was down 33% (versus the overall S&P 500’s decline of “just” 20%). Consumer confidence fell in the first half and negatively impacted tech revenues before recovering. Meta made some mistakes. Interest rates rose, further dampening the party. Investors decided that other stocks represented better inflation hedges. (See Source.) All in all, it wasn’t pretty.

And the tech companies responded in late 2022 and early 2023 in a litany of bad news for tech employees:

• Company:        Layoffs            Share of Employed (See Source.)
• Amazon:          18,000             (1.2%)
• Alphabet:         12,000             (6.4%)
• Meta:               11,000             (12.6%)
• Microsoft:        10,000             (4.5%)

The same source goes on to quote the respective CEOs generally along the lines, “We hired too many as the pandemic subsided and now, we have to right size the company for the business we expect.”

This is undoubtedly traumatic for the affected parties. However, the Economist at least sees tremendous pent-up demand for these tech skills in other industries who have not been able to hire adequately in the current very tight labor market.

Here are a few selected facts from this source:

• “The tech industry employs 10% more staff today than in January 2020, according to the Computing Technology Industry Association (Comptia).”
• “Even after Meta, a social-media giant, loses the 11,000 workers it laid off last month, it will still employ nearly 70% more than it did before the pandemic.”
• “Sacked techies should not struggle to get work. Lots of old-economy firms need their skills. Walmart, despite its lay offs, keeps snatching up data scientists and other hyper-numerate types. Already 59% of tech professionals work outside the tech sector, reckons Comptia. On the whole, demand for highly paid white-collar personnel is as hot as ever. Unemployment rates for financiers, technologists and managers are even lower than America’s overall rate of 3.7%, and have fallen further over the past 12 months.” (Economist: December 4, 2022, Is a white-collar recession looming?)

The New York Times also notes that Amazon, too, has apparently hired 728,000 employees since 2020, a net gain after the recent layoffs of more than 700,000! (See Source.)

The Barrett Group spoke with one of the laid off senior managers from Google (Alphabet) last week.

He shared that he had received a reasonable severance package. And that only about 1,700 of the reported 12,000 layoffs were in the San Francisco Bay Area. He also confirmed that the cuts were at all levels. His one complaint was the impersonal nature of the message: he was cut off from his company account in the middle of the night and informed of his firing by email.

But he also agreed that there is plenty of demand for the tech skills that are being liberated at the moment, and “having Google on your resume is not the worst thing in the world.”

Over the last three decades the Barrett Group has seen plenty of business cycles. Inevitably, a large share of executives ultimately comes to the conclusion (sometimes because of force majeure) that they are in the wrong job. With the wrong company, the wrong industry, and then they face a significant obstacle in “recharting,” their professional careers, especially if all they know about is executive recruiters. That is because, in general, recruiters have been hired to fill a role with someone who exactly fits the job requirements. An executive who wants to change industries or roles will rarely fit such rigid requirements… which is where the Barrett Group comes in.

Working with the Barrett Group you are at least seven times more likely to land the job of your choice than when you work only with recruiters because we serve a vastly larger market: 75% of our clients land via the so-called “unpublished market.” [Read More.]

Of course, we can help a client simply move from one company to a competitor in the same industry (and significantly increase total compensation along the way) but where we really shine is for the many executives who want to make a major change… whether because they are bored, feel there is no longer a good fit, or perhaps they have been glass ceilinged… those executives who want to transfer to a new playing field.

We actually track transferable skills and are adept at helping executives recognize and explain the transferability of their skills and experience to new employers. [Read Do you have tremendous transferability? for more information.] Here is how one recent client, Ned, described his Barrett Group experience through which he accepted an offer as VP of Business Development:

“I don’t have experience in this field but, thanks to the skills I worked on with George [his Barrett Group career consultant], I felt confident and was able to portray myself in the best possible light.” 

Ned was thrilled to have landed an exciting job at the right level, with great compensation and potential.

“There were times where I felt in a rut during my job search, but regular engagement with George kept me energized and on path. That was the most helpful aspect of my job search experience.” [Read More.]

And by the way, being downsized does not mean you have to be down in the mouth. Consider the Upside of Downsizing… After the emotional shock and assuming you have at least a small financial buffer you are free to investigate. To all of those other professional avenues you have never been able to look into before. Especially, if you have a tried and true Barrett Group team backing you up to facilitate your rapid recovery.

That is why we call the current phase “upsidedownsizing.” First, the drastic headlines scare executives unnecessarily because the market for executives is very vibrant. Second, even if you are downsized, this is most likely your chance to discover new opportunities.

Naturally, we suggest you improve your odds by hiring the Barrett Group. We make it our job to help you find yours.

Peter Irish, CEO
The Barrett Group

What a Relief!

“Tell me about your clients… What motivates them?”  a curious CEO asked me the other day. While all Barrett Group clients are unique their circumstances may not be. 

Here’s what prospects tell us about their motivation… Some are motivated by fear of becoming unemployed, of reaching an income ceiling. Also of their working conditions changing, or of being bullied at work. Others are driven by ambition… for example, “decreasing likelihood of promotions,” “my future earnings are limited,” or “I do the work but lack the title.”

Still others recognize a mismatch between their ideal position and their current circumstances, e.g., “personal needs in relation to employer.” Or “an abundance of stress on the job,” “antagonistic/unprofessional environment,” or “the pressure of office politics.”

And others are simply bored or in any case feel the need to make a change, saying they are “comfortable but want a change,” “at my age a career change is necessary,” “job lacks challenge,” or “I must get into a new industry.”

One common feature though is that our clients experience a sense of relief when they find the Barrett Group. Someone who will finally understand their unique background and aspirations. And someone who is both caring and qualified to help. Someone who can help them translate their experience into an effective career strategy. 

Many have spent months battering their heads against an indifferent job market, often because they are approaching only the published market or the recruiter market—like an iceberg—the 25% of the market that is publicly visible.  As one successful Barrett Group client opined…

“What you don’t do often, you don’t do well. For me, that was job seeking,” said Chris. “I’d made only three or four career changes in entire life, but The Barrett Group does this for a living. They know all the tricks in the book.” 

“The Barrett Group’s process is very complete. They began by assessing my personality, my communication style, and my goals. Then they tailored their process to my needs,” said Chris. [Chris Burger, Head of Revenue Technology and Operations] 

We also help our clients understand and penetrate the vibrant and enormous unpublished market where fully 75% of our clients land.  [Read More: Why are you peering through a keyhole at the executive job market?]

Beyond our caring and supportive attitude, another reason clients experience relief when they  sign on entails our tried and true process that leads clients through five major steps, demonstrating a very high success rate for those who follow the process. [Read More: Hundreds of Happy Executives.]  The process begins with the Targeting Step (our Clarity Program©). 

“I really like the Clarity Program© and my Clarity coach, Scott Brown. He is very good at what he does,” said Derek. “He got me to look internally. He got me to consider the social and financial parts of my life, my goals past and present, and where I see myself in the future. He made me think more than I’ve ever done in other similar courses. To be honest, it’s probably one of the most valuable things I’ve done in a long, long time.” [Read More: Derek Maxwell, Senior Manager of Engineering and Supply Chain.]

Quite often it is a relief to clients to see that they have other options. 

Our process helps clients reorient their careers to faster growing, more promising, or more enjoyable industries.  Think of us as “masters of reinvention,” because that is what we help our clients achieve.  [Read More Do You Have Tremendous Transferability?]

Oh, and one more source of relief: our system simply works.  After the Clarity Program© successful clients also work their ways through the personal branding, market access, preparation, and on-boarding steps in the program to reach unprecedented results:

So far this year

-81% of our landed clients earn more than $150,000*

-51% earn $200,000 or more*

-31% earn $250,000 or more*

-47% have a VP, SVP, EVP, or C-level title.

*refers to base compensation only, excluding bonus and perks.

We can also typically add $10,000, $20,000, $30,000 or more in bonus, benefits, perks, and sometimes even equity participation as a part of the offer negotiation process. [Compensation: Read More.]

What about you?  If you have been seeking but not finding that ideal executive position, perhaps you could do with a little relief, too.  What are you waiting for?  Give us a call.

Peter Irish, CEO
The Barrett Group

Editor’s Note:

In this particular blog post “executives” will generally refer to the Vice President, Senior Vice President, Chief Operating Officer, Chief Financial Officer, Managing Director, Chief Executive Officer, Chief Human Resources Officer, Chief Marketing Officer, Chief Information Officer, Managing Partner, General Counsel, Head, and President titles. Unless otherwise noted, the data in this Update will largely come from LinkedIn and represents a snapshot of the market as it was at the time of the research.

Is LinkedIn truly representative? Here’s a little data: LinkedIn has more than 800 million users. (See source) It is by far the largest and most robust business database in the world, now in its 19th year. LinkedIn defines the year over year change (YOY Change) as the change in the number of professionals divided by the count as of last year and “attrition” as the departures in the last 12 months divided by the average headcount over the last year.

INDUSTRY UPDATE: Information Technology

Researching this particular update, we were filled alternately with wonder and dread. That may be simply how it feels to be facing the opportunities and challenges in the information technology field. Especially, facing these challenges on the cusp of 2023.

Why wonder? Technology offers so many wonderful chances to improve the human condition—health, wealth, work-lives, and even perhaps enjoyment.

Why dread? The opportunities for abuse of security, spying, ransomware and other cyber crimes are growing exponentially. Also everyday objects collecting information and interacting with their users, or the bulk of us being left behind as certain social groups and/or enterprises move into the metaverse.

In any case, there are big changes coming.

Let us begin with the larger tech trends as they pertain to IT executives. You can probably find almost any technology you wish to identify in one of the numerous lists available when you search for “tech trends.” Several that seem particularly valid to us include:

• Increased emphasis on artificial intelligence
• Blockchain expands beyond cryptocurrency applications
• The internet of things continues its infiltration of our everyday lives
• Sustainability becomes increasing relevant in IT decision making
• Artificial reality applications expand (a.k.a., the “metaverse”)
• Embedded finance extends its grip on internet businesses

If we make any of these sound sinister, they are not of themselves dangerous. Although in the wrong hands or used unethically, they all can be. This explains the corollary demand for enhanced cybersecurity that accompanies every technological advance.

IT professionals are certainly in demand, especially executives with the right skills. One source suggests that 52% of “technologists” at all levels interviewed are open to changing jobs in the next year.

The same source continues, “In just two years, the willingness to change employers has risen roughly 63 percent. From our research, this is likely a combination of increased salary opportunities, a desire for better work-life balance and remote work, and the increased importance of company reputation.” [See source.]

This underlines a key challenge that IT executives will continue to face: retaining qualified staff. This implies agility in managing a fluid staff with flexible compensation and perks, including a high degree of remote work and other desirable aspects of employer culture.

Meanwhile, as we will see in this Update, executive specializations have also evolved somewhat since our last report. They are shifting away from cloud computing toward artificial intelligence, blockchain, and IOT (the internet of things). Forbes takes these highly sought-after skills to a new and interesting level describing those most in demand as [See source]…

• Storyteller
• Cybersecurity
• UX Design
• Digital Marketing
• Augmented Working

All in all, it seems that IT which once seemed to be a rather dry, unimaginative area of endeavor has morphed into a remarkably lively hot spot in recent years and that seems unlikely to change any time soon.

Executive Employment

In the geographies of focus (US, EU, UK, and Middle East) some 378,000 executives are active. And we define them (see Editor’s Note) as active in the Information Technology and Services area. This population has grown by about 2% in the past year. While another 15,600 have changed jobs, bringing the total executive opportunities to a whopping 6% of the current baseline. Unusually, this population is larger in the EU, UK and Middle East (200,800) than in the US (177,300) and the churn (job changing) is also much higher at 4.8%

vs. 3.4% in the US. Both populations are decidedly male-dominated at 20% female in the US and only 14% in the EU, UK and Middle East. LinkedIn reports that the median tenure for these positions is about 3.4 years.

HP (1,411) and IBM (1,372) hold the overall top spots in terms of the number of executives employed though they switch positions depending on which geography one takes as a basis.

Not surprisingly, LinkedIn reports “very high hiring demand” for executives in this industry. Chart 1 examines in more detail how specific segments have developed over the past year, with VC & PE (+10.7%) taking the top spot in terms of growth, followed by Environmental Services (+9.6%), and Non-profit Organization Management (+9.1%), Renewables & Environment (+7.3%), and Internet (+7.2%).

Even the largest segments showed relatively strong growth as well, for example, Computer Software (+4.8%), Management Consulting (+4.4%), and Higher Education (+5.1%). In the top ten by number of executives, Marketing & Advertising, Telecommunications, Computer & Network Security, and Real Estate all came in under-proportionately on growth.

Sharp-eyed readers will immediately spot the fact that HP (Hewlett Packard) shows up twice on Chart 2. Showing up as both HP and Hewlett Packard Enterprises. The two companies were created by a split in 2015 when the business decided to separate its historical printer business (HP) from its services business (HPE).

Both of these business grew strongly in 2022 mainly through acquisition, for example, HPE’s August 2022 purchase of Poly “a leading global provider of workplace collaboration solutions.”

IBM’s pace of growth might seem sedate by comparison, but the company has just announced the acquisition of Octo, a US-based specialist in helping government entities digitize their processes. Keep in mind, too, that Kyndryl (an infrastructure services firm) was also part of IBM until November of 2021 when it was spun off.

Then YouTube also stands out, of course, having hired approximately 20,000 employees in 2022, including some executives, mainly from its parent company Alphabet (Google), but also from Amazon, Meta (Facebook), TikTok, Spotify, Twitch, Microsoft, Twitter, and Fiverr—a veritable who’s who of tech and social media players.

IHS Markit was acquired by S&P Global in February 2022, hence the huge attrition.

Executives on LinkedIn typically have more than one specialization, so please do not be surprised at the absolute numbers on Chart 3. Still, the ranking shows us the relative supply of talent from a skills point of view. As usual, there are many highly specialized skills perhaps only applicable to this industry (such as Cloud Computing or Software Development), as well as many more transferrable skills that could help executives transition into or out of this business area (including New Business Development, Business Analysis, Sales Management, etc.).

Less obvious are the up-and-coming specializations in this industry. We examined a number of these below and have noticed the relative increase in Blockchain and the internet of things (IOT). We kept the search terms deliberately broad (such as “Robot” or “Autonomous”) so as not to exclude too many specific niches. One observation is that the churn rate is relatively high across the board presumably because these specializations are in high demand.

Next, the growth rate shows a sudden pick up in interest, for example, in the artificial reality or “metaverse” area. We will see how these extra-special areas of focus evolve going forward, but for now they generally seem fairly promising. Many of them cluster in geographic areas, too, by the way. For example, overall San Francisco is not showing as much growth as a few years back, but in some of these specializations it remains quite the hot spot.

Speaking of location, Chart 5 provides an overview of where most executive positions are located in this industry, though given the growing prevalence of remote working this is more likely an indication of their place of employment than their place of work.

While New York may be able to boast the most IT executives (>19,000), its rate of growth is a mere 1.1%. As we noted in the introduction, higher growth prevails outside the US in locations such as Paris (+2.7%), Munich (+3.2%), UAE (+4%), Randstad (+3.2%). And also Saudi Arabia (+3.6%), Warsaw (+3.6%) Istanbul (+5%), Vienna (+4.5%). Also included are Hamburg (+4.3%), Romania (+5%), Brussels (+4.0%), and Prague (+3.2%).

Therefore, our client teams provide very detailed research data for executives targeting specific locations, companies, or segments, including background information on individual executives who may be involved in a particular hiring process, however, to give readers a feel for who’s who, here are a few sample locations and the largest employers of executives in each:

New York IBM, Bloomberg, AECOM
Washington SAIC, CACI, Accenture
London IBM, Genpact, Capita
Los Angeles HP, AECOM, Snap
San Francisco HP, Anonymous, HPE
Paris IBM, CGI, Numeum
Chicago Sargent & Lundy, IBM, AECOM
Dallas NTT, IBM, Jacobs____________
Munich CARIAD, MSG, Giesecke+Devrient
Randstad IBM, Xebia, Centric
Stockholm Knowit, EGET, Tietoevry

Certainly more important than the mere growth numbers are the indications at far right on Chart 5 showing the relative hiring demand as determined by LinkedIn, whether Low (L), Moderate (M), High (H), or Very High (VH).

Readers will note that there is not necessarily a correlation between growth and demand. Take Chicago or Boston, for example, with just 1% growth but very high hiring demand, or Denver with -0.2% growth but still a very high hiring interest. Clearly there is no lack of demand.

And our clients receive support from a six-member team including a research specialist who can provide broad-brush screening industry data from our data bases of more than 800 million companies and individuals as well as drilling down into highly granular company, location, and executive-specific information as may be required in preparing for a key interview. Read Research to the Rescue for more information.

Peter Irish, CEO, The Barrett Group

Click here for a printable version of Industry Update – Information Technology 2022

Editor’s Note:
In this particular Update “executives” will generally refer to the Vice President, Senior Vice President, Chief Operating Officer, Chief Financial Officer, Managing Director, Chief Executive Officer, Chief Human Resources Officer, Chief Marketing Officer, Chief Information Officer, Managing Partner, General Counsel, Head, and President titles. Unless otherwise noted, the data in this Update will largely come from LinkedIn and represents a snapshot of the market as it was at the time of the research.

Is LinkedIn truly representative? Here’s a little data: LinkedIn has more than 800 million users. (See source) It is by far the largest and most robust business database in the world, now in its 19th year. LinkedIn defines the year over year change (YOY Change) as the change in the number of professionals divided by the count as of last year and “attrition” as the departures in the last 12 months divided by the average headcount over the last year.