Just months after going on hiring sprees due to skyrocketing demand, the tech industry has done a 180 as concerns over a recession bubble to the surface.
For notable firms like Meta, Intel, Lyft, and Twitter, hiring freezes have become the norm as their stocks consistently fall and profits remain slim. In order to cut costs, many Big Tech competitors are either slowing down their hiring, or even laying off employees.
But is this the right strategy to take?
A recession seems all but inevitable based on expert forecasts and market trends, but it is still not here.
Although it makes sense for companies to protect themselves during an economic downturn, economists believe that there is still a way for the US to avoid a full recession.
Not only do hiring freezes impact a company’s ability to operate, but it also gives competitors a chance to snag top talent. If they catch wind that a hiring freeze is occurring, they may entice employees fearing potential layoffs with more reliable positions.
This hinders employee morale, engagement, and productivity — all of which cannot be sacrificed if companies actually want to stay afloat during a recession.
“If someone quits on you, then what happens?” said Brian Formato, CEO of the HR consulting firm Groove Management. “Are you not allowed to backfill the role? In a number of instances, the company says no, you can’t.”