The Hiring Wake Up Call: What We Can Expect In 2024

Does Customer Success have a future?

Yes. 100%. IMO. ?

There is a lot of chatter around the future of CS on LinkedIn given the fallout over the last 18 – 24 months – it’s a byproduct of being at the bottom of a tough market in tech and as we move towards a more positive condition a lot of that chatter will stop.

That said, CS will continue to evolve as it always has done, and the skillsets and ways of working will change in line with a drive towards more efficient and profitable growth for tech companies vs growth at all costs that fuelled over hiring in recent years.

That applies to all functions, not just CS.

The growth in CS teams over the last 5 years has been phenomenal and has consistently been in the Top 5 of LinkedIn's most in-demand roles.?????

I do feel the pace of growth has outstripped the rate at which the maturity of the function has grown in terms of understanding the value it brings to organisations and customers, and there is a reset happening, but not an extinction event.???

To give you some idea of how big the profession is now, it employs over 220k people globally at all levels, and around 100,000 in the US, 17,000 in the UK, 8,000 in France, 7,000 in Germany, 4,000 in Spain, and 3,500 Netherlands.

Despite the tough recent conditions, the market hasn’t shrunk in headline numbers at a meaningful %.

The numbers suggest that we’re netting out about the same market size over the last 24 months.

To add more context, the profession has grown in headcount 3-4 times over the last 5 years.

That said, around 38% of the 220k currently have their LI profiles tagged as Open to Work, that’s 84,000 which is high.

This usually sits at 20-25%, so there is some considerable movement in the market currently.

What have you seen go on within the customer success space over the last 12-18 months? Why do you say that - think about the impact of Brexit, Covid, war, etc.

The macro funding picture is the big topic here. Global venture funding into startups at all stages shrank considerably in 2023 to $ 285 billion from $462 billion in 2022, a 38% decline, and $694 billion in 2021, a 59% decline.

Europe fared slightly better by a small margin. ?

We’ve been on a 24-month funding decline. ?

To add context, 2023 was less than 20% down when compared to 2018 – 2020, pre-Covid. We were in a bubble that has popped over the last 2 years.

I’ve been working with investor-backed tech companies since 2009, and the last 24 months are comfortably the toughest market I’ve been through.

The layoffs have been horrible to watch, and last January in particular was brutal.

Some good news here, December was the lowest number of layoffs since May 22 according to the various trackers I use.

So, how has the impacted CS…

o?? Significantly reduced hiring volumes - all levels are down. If I look at data from our own business, vacancy and live search flow is down by 60% when compared to 2021. ??

o?? CS has been hit hard by layoffs, but not particularly out of kilter with other functions, and certainly not the worst, it’s hit everyone. ? The biggest fallout has been with larger-scale companies where they have been able to consolidate CS roles and operate with fewer heads. ? Companies with larger CS teams have cut numbers due to customer churn or just a need to cut costs and increase account density per CSM. Impact within earlier-stage companies has been less severe. Companies where that don’t have any CS resources need it and have continued to hire. ??

o?? That said, risk mitigation when hiring has been a real challenge, and when companies do decide to hire, it’s often with an extensive list of requirements such as domain experience, experience at specific funding stages, and deep experience in specific territories. Whilst that’s often the case with startups, there is an added layer and less openness to flexing – people are happy to wait. ???

o?? We’ve also seen downward pressure on CS leadership salaries by downgrading roles. I’ve not seen a direct impact on VP Cs salaries dropping by 20-30%, but what I have seen is companies trying to hire at a more junior level and coming at it that way but still expecting to get a leadership skillset. ???

o?? Reporting lines changing – CS increasingly rolling up into CROs is a clear trend that will continue in line with CS functions moving to a more commercial approach - Founders and C-suite caring less about fuzzy metrics like NPS.

o?? And from a skillset perspective, leaders who have a wider operational appreciation, know how to leverage tech, understand how to effectively map, and optimise customer journeys, and can help a business maximise customer LTV are in the highest demand. ?????????????

o?? This is closely linked with proven experience in launching Digital programs, self-serve, and Communities.

o?? Leaders and CSMs that are commercial and truly understand the metrics and unit economics of their business and know how to attribute value to customers and their own business, had the advantage in the jobs market. These are being increasingly viewed as must-haves by clients.??? ?

Can you give some early indications & observations about what the market will look like in 2024?

A better year but no hockey stick up improvement. It feels like we’ll have a slow grind up to better times later in 24.

The consensus is we’ve already hit the lows in the funding market, and we’ll see an uptick in IPO activity this year that fuels the wider funding market. ?

I’m told that PE and VC funds are also sitting on a lot of cash they need to deploy.

Hopefully, interest rates and inflation will start to fall – this all creates a better outlook.

I’d caveat that with some caution as there will be a lot of early-stage companies getting toward the end of their reserves from cash raised before the downturn.

We’ll probably see more companies shuttering and layoffs continuing for a while yet, unfortunately.

But hopefully not as brutal.

Through the lens of my business Zeren, Q4 was far better in terms of client pitches and vacancies than any of the previous 3 quarters and January is shaping up to be a good month and the outlook for Q1 generally is better.

What do we need to be doing better as customer success professionals to ensure not only do we survive, but thrive in 2024?

BIG OPPORTUNITY in 2024 for CS to step up to the revenue table and conversation.

CS needs to embrace its role as a revenue generator, not just an experience facilitator.

Business leaders need proof, and the CS profession needs to work hard to figure out how to quantify outcomes.

I find that the CS profession has trouble attributing success and impact teams are having on top line and bottom line revenue and decisive action is needed to quantify outcomes.

Leaders and teams will need to be clear on how customers directly benefit from programs tied to their goals around adoption, expansion, renewals, and advocacy, and show how this drives revenue growth, margins, and LTV.

We’ll need to connect the dots with data and find clear correlations to improved outcomes, retention, and expansion. You’ll need to get obsessed with the data if you’re not already.

In today’s Tech landscape, CS understanding the commercial environment and impact is more important than ever.

Separately, I’d add that companies are looking for efficiency, and the ability to effectively segment customers, understand different engagement models, and optimise customer journeys is vital. Driving operational rigour and watertight reporting is crucial.

Where do you see the opportunities existing in 2024? Is it particular industries or domains? Stage of business, stage of funding, etc?

Early-stage funding has fared better than later stage and that’s where I’ve personally seen more opportunities in the market over the last 18 months, at both a leadership and IC level.

These companies need to show they can retain and grow customers if they want to raise funding and will often start hiring in preparation for that. ??

Companies at the Seed to Series A stage looking to build their CS functions can be an exciting place to be.

These often don’t have a CS function or qualified leader, and these environments can suit people who are comfortable with being scrappy and want to go on a scaling journey. ?????

Looking at domains, FinTech is tipped to stabilize and bounce back in areas such as spend management – infrastructure, and some of the underserved markets like supply chain insurance– places where there are outdated legacy systems that need updating. A lot of this world still has paper-based systems and there is a clear disruption opportunity.?

This applies to the wider market too. Look at areas like Construction Tech, Supply Chain logistics, and tech sold into manufacturing. ?

Laggard markets held up better than sectors like MarTech last year. Be prepared if you’re looking at less obvious industries they can be challenging as you’re looking to change buying behaviours formed over many years with very different personas to work with.

Sustainability and energy efficiency – various areas are benefitting from regulatory changes creating tailwinds. For example, LCA (lifecycle Assessment) – the environmental impact end to end of building and manufacturing cycles. ?

Industries where regulation is driving change can be appealing – the same happened in HealthTech a few years back where events drove reform – such as how care homes operate and report on patient care drove growth in tech supplying those solutions. ??

AI obviously will continue to attract attention – it will be interesting to see to see how that plays out in 24.

More broadly, try and focus on must haves vs. nice to have solutions. ROI is being heavily scrutinised and unless you can demonstrate real value there is a higher risk. ??

Can we spend some time unpicking the perceived horror stories around recruitment:

Ghosting - It’s awful. It’s happened for as long as I’ve been in recruitment but has increased in recent years. ? It's so frustrating when you’re at the end of it.

Despite best intentions, we’re likely all guilty of it to some extent.

Over the last 18 months it has become far worse as Talent Teams have had resources cut and response rates to live roles have gone through the roof. Line managers may be running the hiring processes themselves and just want the role filled quickly. They won’t be thinking too much about candidate experience. Plus, it’s so easy to apply for jobs on LinkedIn and fire off a generic message asking to chat with the role advertiser.

It's created a very transactional environment for candidates, recruiters, and hiring companies. I rarely advertise searches I’m running, but to give you some idea of numbers for a role posted pre-Christmas – it had 900+ applications and a further 120+ messages asking to chat.

Everyone got a response to confirm if they were being progressed or not.

A good number of those who were declined subsequently asked for feedback. ??? 90% + of the applicants weren’t even close to the list of requirements outlined - I doubt some applicants had even read the advert.

This creates an administration nightmare – you can’t automate all of this.

If you’re managing lots of hiring assignments, I do understand why ghosting happens if you’re stretched. ?

What I have a real issue with is once you’re in a process and interviewing, to be ghosted after that point is so poor and there is no excuse if you’ve committed your time.

It’s such poor PR when companies do it.

Some companies do have a no feedback policy and will simply give you a yes or no, and I’d check their policy if you can to help manage your expectations ahead of time.

It’s a tough one to mitigate as it’s ultimately down to the person on the other end being professional in their approach.

I’d suggest establishing timelines for feedback during the interview at the very least so you can rightly follow up with a timely nudge.

Also, keep in mind things change quickly in this market and the person you’ve met with might be waiting for updates. Whilst some folks might proactively update you, others won’t and might be waiting for clarity before they reach back out.

If you’re chasing feedback, keep this in mind too.?

Being passed over for roles - It’s a hyper competitive market, it’s harder to get in front of companies and far harder to land a role.

Processes are taking longer too. If you’re being overlooked at the application stage, you need to be considering if your approach is right or if the job, you’re applying for is a good fit. ? Just being a great CS leader or CSM likely won’t be enough on its right now to land a role.? ?

We’re getting lots of requests like specific funding stage experience, domain experience as a non-negotiable, and experience with the same types of customers or buyers. ? Hiring companies can be picky in this market and will come with a long list of requirements to mitigate risk.

If they hire, they want to feel like every box is ticked. The more senior you go, the more this becomes an issue. ??

You must be making sure you’re bringing to life what’s in it for the hiring company and what would make you a compelling hire. ?

If you’re getting through to an interview and getting declined, you’ve got to ask yourself if you’re as well prepared as you should be and if have you gone the extra mile or two to ensure you stand out.

There are lots of things you can do in the process that will help set you apart –

• Have you connected with the interviewer before the meeting with a short polite note?
• Have you taken the time to demo the product? Or download the app?
• Have you done your homework about the leadership team? Or the existing CS team? Are there any clear trends you can leverage or parallels you can draw on with existing employees?
• What about customers – do you work with any of the same clients??

Get granular with your homework. There are so many small things you can do that compound to make a big difference.

Don’t just do the minimum or the same thing over and over and expect different results.? ??

Presenting & handing over a business plan - You should expect a task if you’re interviewing, but something that gives you a sense of what the role is about, and both sides benefit from it. If it’s a full-on business plan it’s a no for me and I advise clients against asking for it in most instances.? ? That said, if it’s a very senior role, I do understand why it might be applicable and how it would benefit the company to assess your level of understanding and approach.

I am seeing more companies offering to compensate candidates if it’s a labor-intensive assignment that has practical value. Equally, be cautious if the process feels too easy and lacking in due diligence. A good process should be enjoyable and challenging, and make you feel like the hiring company has a clear picture of what you bring to the table.?? ?

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