Is it still a candidate’s market?

When it comes to hiring executive-level talent, the initial years of the COVID pandemic were characterized by a market full of competing offers, bidding wars, and lofty compensation packages—in many cases, putting the candidate in the driver’s seat.

In the midst of the 2023 economic downturn, we have seen a noticeable shift. A recent analysis shows median pay for employees declined in 2022 at at least 18 well-known tech companies including Tesla, Uber, Oracle, and Alphabet. In some cases, at Snap for example, it declined more than 30%. While each of these examples has different variables involved (e.g., more employees living outside the US or a decrease in equity value), it’s hard to ignore the overall trend.

In response to economic headwinds, companies are revisiting their compensation strategies with the goal of rightsizing pay. This came up explicitly in a recent conversation we had with a talent acquisition leader at a publicly-traded gaming company. They shared that they are doing an in-depth review of compensation across roles to ensure they are competitive in the current market, as opposed to prior compensation standards. They are drawing a hard line in the sand in terms of how much they are willing to stretch—even for the most qualified candidates.

This is a significant change from a period of rapid hiring and a war for talent that dramatically drove up pay over the last couple of years.?

Now, smaller organizations may face less competition for talent, as many of the highest paying tech organizations have gone through layoffs and hiring freezes. And in cases where equity has decreased in value (tech stocks fell more than 30% in 2022, more than the overall market drop of 20%), big company equity packages may not be as enticing as they once were. As described here, companies that once had to offer large equity packages to keep up with FAANG companies may no longer need to do so.?

For companies and candidates alike, this is a moment to recalibrate.

For companies: Employers are looking for very recent industry benchmarks because compensation is rapidly changing. This is a time for your talent teams to reevaluate how you establish compensation bands and in what ways you are—and are not—willing to stretch for a qualified candidate. Especially at a time when there’s no shortage of top talent seeking new opportunities, the pendulum has swung in your favor.??

And as the talent leader mentioned earlier pointed out: This moment in time has allowed them to focus on finding candidates who are truly passionate about the company and its mission; it’s not just about matching comp. They are better able to separate those who really want to be there from those who are simply vying for the highest near-term payoff.

For candidates: In the context of a salary negotiation, while it is important to advocate for yourself and know the data around competitive offers, it’s also important to recognize how the market has shifted. Companies may be willing to walk away from your candidacy if your pay demands are too steep. Make your case, but remain flexible and open if it's a role you're truly excited about.