What happened to the tech talent market in 2021

It's no secret that the talent market has been bananas lately, which means talent acquisition professionals across industries and geographies have a lot to keep up with. At Zapier, we keep ourselves informed about recent trends to make smart sourcing and hiring decisions. Part of this effort has been seeking to understand what really happened to the talent market in 2021. 

We believe that recruiting is a team sport. This means that the more we involve everyone at Zapier in our recruitment and sourcing efforts, the better we'll be at hiring diverse and qualified talent as we continue to grow. 

So, during what we called our 2021 Talent Market Retro, we shared four factors that changed the job market last year and asked Zapier employees across the organization for their input on this market. Here's what we shared—and more importantly, what we learned.

1. The Great Reshuffle

If you've been keeping up with the talent market in any way, this isn't the first time you've heard of the Great Reshuffle (also known as the Great Resignation). 

After the hiring freezes, layoffs, and overall uncertainty of 2020, it was safe to assume that 2021 would see an increase in the number of job changes across industries. But the magnitude of this trend presented a very distinct challenge for talent acquisition. According to Microsoft's Work Trend Index, over 40% of the global workforce would be considering a new position in 2021. That didn't mean that 40% of the workforce actually quit their job last year, but it was a huge number with huge implications for hiring and retaining talent in 2021 and beyond. 

Brandon, Zapier's Chief People Officer, noted in an internal post that the Great Reshuffle was characterized by post-2020 burnout, paired with folks rethinking what they wanted out of their jobs and a hiring surge in sectors like tech. Together, these factors have led to the relatively high rates of job change we saw throughout 2021—and are continuing to see now. 

Looking at it through this framework, 2020 acted as the trigger, not the cause of the Great Resignation. As Zapier data warehouse engineer Sarah put it:

"Many people may have withstood years of small frustrations (no pay increases, having their training blocked, no career path, bad work/life balance, too much pressure, and not enough resources), but the additional strain of the pandemic put them over the edge."

In hiring, it's important to understand what specific factors could be motivating people to leave their jobs. So, we asked Zapiens what they felt was driving the Great Reshuffle. Here are their responses.

What do you think is driving the Great Reshuffle and motivating people to leave their companies?

Clearly, there's no one absolute truth, but when you think about these results in the context of recent online movements like theSkimm's #ShowUsYourLeave campaign that's been supported by companies like Pinterest, it's clear that employees are looking for workplaces that are aligned with their professional and personal interests. To us, this means that hiring in the 2020s is going to be about demonstrating how our company is caring for people's overall well-being, both in and out of the workplace. 

Based on these results, here's what we're doing moving forward: 

• We'll share information about our benefits and compensation early in our hiring process, sometimes as early as our first outreach message to candidates. This will allow folks to decide if our potential offer aligns with what they're looking for before investing time in our process.

• We'll share with candidates information about Zapier's personal development and mentorship opportunities and the programs we have in place to support our employees. This includes things like our commitment to helping our employees find their next job, an explanation of our growth framework, highlighting the work of our ERGs, and more. The goal is to show a clear investment in taking care of our people. 

2. Layoffs

Unfortunately, several tech companies experienced mass layoffs in 2021. Zillow laid off 25% of its workforce, Instacart eliminated thousands of jobs, Better.com let go hundreds of workers over a Zoom call, and Dropbox laid off 11% of its staff despite gains in customer acquisition. And as we've seen with Glossier, Hopin, and Peloton in just the first couple of months of this year, mass layoffs in tech are likely to continue to be an issue. 

Layoffs present a unique opportunity for hiring teams because the benefit of engaging laid-off candidates is a two-way street. Layoffs are also easy to keep track of thanks to websites like Layoffs.fyi and lists that often circulate with the names and contact information of those affected. For example, here's the list from Zillow's layoffs in 2021: former employees added themselves to indicate that they were open to new opportunities after being laid off. 

At Zapier, we've been reflecting on how we can best reach out to folks affected by layoffs in a way that is empathetic and helpful, while still staying true to our process. When it comes to cold outreach, Adri, our Sourcing & Talent Attraction Lead, believes that "as long as we approach folks with empathy and high care, there's a strong mutual benefit. We get to connect with awesome talent and also connect them with potential opportunities they could have an interest in."

With this in mind, RJ, a sourcer on our team, and Bonnie, our Business Recruiting Lead, put together personalized outreach campaigns to laid-off candidates that share information about our open roles and invite them to schedule a recruiter screen (the first step in our process) if they're interested. 

Some companies have opted for more public approaches to connecting with laid-off talent. Shopify's CTO, Allan Leinwand, sent out a public LinkedIn invitation to attract Peloton engineers after recent layoffs. The Shopify team created a job post specifically for software developers impacted by Peloton's layoffs, giving them a one-week timeline to apply and promising a 48-hour turnaround for applications. Although this is undoubtedly a great way to engage talent, folks have pointed out that these efforts could lead to a "prestige bias," where employers are providing special treatment to those laid off from prestigious tech organizations, while not giving other qualified candidates the same opportunities.  

All of these discussions indicate to us that it's not only ok but important to reach out to folks who have been affected by layoffs and have signaled their openness to new opportunities. At Zapier, we commit to reaching out to laid-off talent in a way that is empathetic, personal, and helpful, while still keeping our process equitable and consistent. 

3. Money, money, growth, and more money

The term "unicorn" is a boastful way of referring to private companies (usually venture-backed) that reach a $1 billion valuation or higher. This was once seen as a big accomplishment, but over 500 companies reached unicorn status in 2021—compared to about 20 just five years prior. As tons of money continues to be poured into tech, being a unicorn might not make you stand out anymore.

This prompted us to ask two questions about what this means for the talent market and hiring in 2022 and beyond:

1. Where will factors like valuation and market cap be ranked among other factors for candidates when considering new roles? 

2. If these factors don't mean much anymore, how can we differentiate ourselves from the rest of the highly valued tech companies out there? 

Although financial stability will still be important, from what we can tell, valuation, market cap, and distinctions like unicorn status are becoming increasingly less important as candidates become more interested in long-term stability and overall well-being. The information we gathered in our poll about the Great Reshuffle showed that factors like compensation, work-life balance, and employee benefits were the biggest motivators for changing jobs. To us, this implies that people are looking for companies that take care of their employees—not just companies with a lot of money. 

We've also seen recent moves by companies like Amazon to offer overall compensation packages with higher base salaries that depend less on stocks and RSUs. This decision is largely influenced by the fact that, although compensation packages that rely heavily on elements like equity, stocks, and RSUs have the potential for high earnings, they vary depending on the market and therefore provide less day-to-day security than strong base salaries. Ultimately, this makes factors like valuation and market cap less important and makes factors like profitability much more important. 

At Zapier, we've been profitable since 2014, which has allowed us to grow without the need for venture funding. This has meant that our compensation packages ensure our employees' prolonged financial stability through strong base salaries (in the 90th percentile) and profit-sharing, and don't rely heavily on equity—although we do offer equity as well. 

The focus-shift to prolonged financial stability means that hiring will be about showing not only your own financial strength but also that of your sector, especially if you can show your company's competitive advantage in that space. This will indicate to candidates the importance of your company's mission within the context of the broader, growing market and highlight both the potential economic growth and potential impact employees can have in your sector. 

For example, no/low-code development has been steadily gaining popularity, and we were excited to see a few companies in this space welcomed into the unicorn club last year. Gartner reports that low-code development will account for over 65% of application development activity by 2024, and according to GlobeNewswire, growth in this space will ultimately lead to over $187 billion in revenue by 2030. For us, being leaders in the growing no/low-code industry should be a huge selling point when hiring in 2022 and beyond, not only because it signals unlimited growth potential for us and the no-code space, but also because it means that folks who join have the potential to impact a burgeoning sector that's still at its infancy. 

4. An intentional move to remote-first

From 2020 and well into 2021, several companies created their own approach to offering remote options for their employees. This includes everything from "work from home for a few days a week" policies, all the way to "we're closing our headquarters." It's clear that flexibility and remote work will be high on candidates' lists of must-haves moving forward, as most people will be looking for options that best fit their needs and preferences. 

Zapier has been intentionally remote pretty much since our founding. For years, this was a benefit for our recruiting practice for two main reasons:

1. It meant that we were able to find great talent anywhere, without the usual geographic limitations.

2. It served as a selling point for people looking to leave traditional office structures.

But after the pandemic, as many companies are starting to see that a remote-first strategy might actually benefit them and their employees, we've begun to wonder what this means for our hiring practices and how we can go a step above just being remote. 

For us, this means focusing on how we're making remote work easy and beneficial for our people—for example, ensuring equity around pay and growth opportunities for employees. This seems straightforward, but unfortunately for companies like Facebook or Google, it's not the case. To actively avoid this inequity, Zapier has created a comprehensive compensation policy for each country where we hire. This policy makes it so that the exact location within a country does not affect compensation (e.g., compensation for a role will be consistent whether the candidate is in San Francisco, California or Los Fresnos, Texas). We also ensure that opportunities for growth are open across the board by posting all our positions internally first.

It's also important that remote work doesn't mean 10,000 meetings and constant checking in. Autonomy and flexibility are key in making remote work actually function the way it should for employees, which makes adopting forms of asynchronous communication necessary for remote environments (especially when global). If you're curious about how we make this work at Zapier, check out this post by our co-founder and CEO, Wade. 

What next?

So a lot happened to the talent market in 2021—what next? 

The market changes we saw last year included a huge rate of job change, several mass layoffs, tons of economic growth, and an intentional move to remote work. From what we can tell, the driving factor of these changes can be boiled down to job seekers no longer settling for just a good opportunity at a good company. People are looking for jobs that truly suit their lifestyles and cater to their whole selves. They're looking for good compensation and long-term stability. They're looking for a good work-life balance and real, substantial benefits.  

At Zapier, the Talent Acquisition team is responding to these trends in six key ways:

1. Openly sharing compensation and benefits early in our interview process to ensure that it aligns with candidates' needs and expectations

2. Continuing to provide internal support to our employees and sharing with candidates how we invest in our people 

3. Actively reaching out to laid-off talent in a way that is personal, empathetic, and helpful, and stays consistent with our current process

4. Continuing to provide comprehensive and equitable compensation packages that ensure prolonged financial stability for our employees 

5. Continuing to impact the growth of our sector through movements like National No-Code Day 

6. Making remote work truly work for our people through equitable compensation and growth opportunities and asynchronous communication practices 

Our goal is to engage diverse and qualified talent by showing a clear investment in our people's well-being and highlighting how Zapier is a great place to make a positive impact in your field.