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Software engineer hiring trends: market conditions are pushing candidate strength and close rates higher
It has been a tough few weeks for tech workers, with waves of layoffs rippling across the industry. Thousands of newly unemployed people and their families are struggling to figure out what’s next.
But there is reason for hope. Tech talent is still—and will continue to be—the backbone of the economy. And while some big-name companies are making headlines by shedding jobs, many other companies are still hiring rapidly–they’re just not getting the same kind of attention for it. In fact, at the last count, the tech unemployment rate was still hovering around 2 percent. At least so far, laid-off engineers are not staying unemployed for long.
Karat, the largest interviewing company in the world, connects engineers to jobs and vice versa. In this role, we collect reams of data. We are sharing some of it here, along with ideas about what it might mean, to help candidates and companies think strategically in these challenging times.
A lot of companies have a bias against hiring people who have been laid off. But that is a big mistake. The data is clear that there are a lot of highly qualified engineers looking for work, especially because some companies have eliminated entire teams or departments. The percentage of candidates we’re interviewing who meet the standard hiring bar is going back up after a year of decline–and is now 25 percent higher than normal. This indicates a very strong labor pool.
The last time this many candidates were achieving top interview scores was toward the end of the Great Resignation. The difference between now and then, however, is that today’s talented engineers are more likely to accept job offers (because they are less likely to get multiple offers in the economic environment). Last year, it was common for companies to aim to close 60 percent of the candidates they offered, but over the past two quarters, almost 70 percent of top candidates have accepted offers across the tech industry.
The industries that dominated hiring in recent years are getting hit especially hard by layoffs, opening up opportunities for large enterprises to attract top-tier talent and hire software engineers. In fact, as employees start to value stability and safety as much as or more than equity upside, we’re seeing a systematic shift in the kinds of companies attracting talent. Close rates for large enterprise organizations like banks and insurance companies have surged in 2022–so much so that, for the first time in years, their offers are being accepted more often than those from hyper-growth start-up companies.
To take advantage of this moment and appeal to great candidates, companies who are hiring right now must hire fast and hire fair. When companies hire in less than seven days, they get higher candidate experience ratings, but more than that, they are more likely to have their offers accepted.
Second, provide flexibility. As some companies push for in-office policies, remote work, remote interviews, and flexible timing is becoming a bigger differentiator for candidates. 46 percent of Karat candidates choose to interview outside of typical business hours, on nights or weekends. Offering options shows you understand your candidates and respect their time.
Third, offer redo interviews. 20 percent of Karat interviewees take us up on our offer to do the interview a second time if they didn’t feel great about their first one. The redo is especially effective for two groups: tenured candidates who haven’t interviewed in a long time and candidates from underrepresented backgrounds who may not have as much exposure to the interview process. In fact, 21 percent of the Black, Latino, or Native American candidates who have been hired through Karat did redo interviews. Overall, companies that offer redos see a 14 percent hiring boost and a 9 percent increase in close rates. It’s a great way to maximize both hiring and equity in hiring at a time when DEI remains a top priority for organizations.
At Karat, we are committed to helping talented engineers get great jobs. It’s good for them and it’s good for the tech industry. As part of our commitment, we routinely publish research about hiring trends. (Check out our 2022 Tech Hiring Trends Report.)
We will keep tracking the data closely. We will share our data and insights to help candidates find companies and companies find candidates. If you are interested in learning more about today’s hiring landscape, our team is ready to discuss the strategies and best practices that will help everyone meet their hiring and career goals in any market.
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