The three years of the pandemic have posed a huge test to the global economy and employment situation. Recently, employment consultancy Challenger predicted that the overall economic environment is still creating some jobs, but hiring has slowed as businesses take a cautious approach as they enter 2023.
Since last year, the United States has seen a wave of layoffs in a number of industries, including technology, media and finance. The Challenger report suggests that the scope of layoffs this year could spread to more industries, regardless of whether the U.S. economy is in recession or not. "We do expect an increase in layoffs in most industries." Andrew Challenger, senior vice president of Challenger, said.
Despite pervasive economic challenges around the world, talent in some markets and industries can still be rewarded handsomely, such as artificial intelligence (AI), information technology, and pharmaceuticals. Information technology professionals, in particular, are expected to continue to win the most raises and bonuses across industries.
The wave of layoffs in Silicon Valley expands
In the second half of last year, the technology industry in Silicon Valley entered a large-scale adjustment cycle. According to Challenger, the U.S. tech sector laid off a total of 97,000 jobs last year, the largest in 2022, including more than 16,000 in December for U.S. tech companies. In 2022, the number of layoffs in the U.S. tech sector increased by 649% compared to 2021.
Since Amazon and Salesforce announced the expansion of layoffs at the beginning of the year, the latest to announce layoffs is the health science division of Google's parent company Alphabet.
On Jan. 11, the president of Verily Life Sciences, Alphabet's health science unit, said in an email to employees that the division plans to cut 15 percent of its workforce and seeks to restructure. According to the latest layoff plan, about 240 employees in the department will be affected. Verily CEO Stephen Gillett said it was a way to seek to cut costs.
This is also the first time that Google's parent company has announced layoffs after the wave of layoffs in the US technology industry. While Google has so far avoided widespread layoffs like other tech companies like Facebook's parent company Meta did last year, employees are already starting to worry about the next round of layoffs.
Verily, Google's health science research and development unit, is also Google's main "expense" department, the department's research and development projects include products such as contact lenses that can detect diabetes symptoms, but there have been few commercial success stories so far, and this diabetes detection contact lens has also stopped development in 2018.
Gillette also said in an email that Verily would "reduce or retire" some of its operations, such as discontinuing some products that are still in the early stages of research and development, including products such as "remote monitoring and drug delivery microneedles for patients with heart failure." "We couldn't do it all and had to make some tough choices." Gillette wrote. Verily will hold a plenary session on January 18 to explain in more detail how the business will change in the future.
According to information previously disclosed by Google, Verily has been raising money from outside investors for years. In 2017, Singapore's Temasek injected US$800 million (5.4 billion yuan) into Verily, which has since raised more than US$2 billion (13.5 billion yuan) through several rounds of equity financing.
External capital is also more cautious due to concerns about recession risks.
This has also led to the bursting of bubbles in some popular industries that were previously sought after by capital, such as the cryptocurrency industry. With the explosion of the "currency circle", fintech companies will cut more than 10,000 employees in 2022, a significant increase from 529 employees in 2021.
This week, Coinbase, the world's second-largest cryptocurrency exchange, announced a further 20% layoff to ensure that the company has sufficient cash flow during the cryptocurrency market downturn. In the past year, the price of bitcoin has fallen by nearly 60%, and Coinbase's stock price has plummeted 86% in one year, with a market capitalization of less than $8 billion at its lowest.
Businesses start "quiet hiring"
But have all businesses stopped hiring? The answer is not quite.
Emily Rose McRae, head of human resources practice at Gartner, a research organization, has noticed a new hiring trend known as "quiet hiring." This type of recruitment refers to the organization to address urgent employment needs through internal temporary job changes or hiring short-term contractors without actually hiring new full-time employees.
McRae believes that organizations face talent shortages in both economic growth and recession, and that in bad economic conditions, companies will tend to take a "quiet hire" approach internally or externally to address pressing employment needs. For example, Qantas last year even asked executives to take turns as baggage handlers to address labour shortages.
"Part of the reason executives do this is to keep the company running, but for a lot of people, it's also a meaningful job rotation." McRae said, "If this 'quiet recruitment' approach is not adopted this year, then many companies may not survive." ”
Consulting firm Deloitte agrees that "quiet hiring" could become a broader employment trend in the coming years. "This can make job descriptions meaningless when hiring, as many employers want to move from work-based to skills-based organizations to quickly adapt to change and address talent shortages." Arthur Mazor, Deloitte's Global HR Practice Leader, said.
Mazzol believes that this may break the boundaries of talent, and that compound talent with multiple skills will undoubtedly be more popular in the future. According to Deloitte, about 70 percent of employees say they are already working on tasks other than their jobs. He also expects "quiet hiring" to begin this year across all industries — from software makers to automakers, from financial services to healthcare.
Some industries are still "absorbing gold"
Tony Guadagni, senior head of human resources at Gartner, expects the talent market to remain attractive to key talent for at least the first half of this year, which will also trigger fierce competition for top talent.
According to Mercer, a workplace consulting firm, U.S. employers are expected to see a rise in pay and total compensation this year at the highest level in 15 years.
In China, the "grabbing war" in areas such as biopharmaceuticals is also expected to intensify. A person in charge of a biopharmaceutical company told the first financial reporter: "China's gap in the field of biopharmaceuticals is still quite large, not easy to recruit, especially senior talents, most of them are still from overseas." Over the past few years of the epidemic, the speed of foreign talents returning to China has slowed down, and now after the optimization of China's epidemic prevention policies and the restart of the economy, there are still some outstanding talents willing to return to China for development. ”
The people also said that in domestic start-up biotechnology companies, relatively high-level positions often pay far more than their foreign counterparts. "It's still quite attractive for some young talent, because they may start from a higher starting point when they return home." He told the first financial reporter, "With the normal progress of the listing of the '18A' science and technology innovation board, some returned talents will also obtain corresponding equity, and there is still a chance to cash in." ”
In April 2018, the Hong Kong Stock Exchange added Chapter 18A "Biotech Companies" to the Main Board Listing Rules, allowing biotech companies with no revenue and no profit to submit listing applications, which greatly reduced the listing threshold for biopharmaceutical start-ups.
The industry believes that the medical and health industry is experiencing a wave of digitalization, and the hot spots in China's medical market are gradually shifting to drug innovation, and clinical, medical and digital and innovation have become the hottest areas. In terms of new drug R&D and clinical trials, improving efficiency through digital means such as big data and artificial intelligence has become a new trend, and it is also the direction that enterprises are striving to better discover talents that match digital transformation strategies, redefine the capability model required by talents, and continuously broaden the boundaries of talents.
Some pharmaceutical companies are creating more efficient digital teams by attracting compound talents with diverse backgrounds, and new employees are increasingly inclined to talents with non-pharmaceutical and medical industry backgrounds.
Dr. Chen Shi, co-founder and chief scientific officer of Shanghai-based Abbisko, told First Financial Reporter: "In recent years, we have seen that the research and development of global biopharmaceutical companies has also slowed down due to the impact of the epidemic, which has actually brought opportunities for Chinese local companies to catch up. In recent years, we have also accelerated the recruitment of high-level talent, especially in the field of new drug development and clinical trials. ”
Chen has worked at Johnson & Johnson, Novartis, and Abbott. According to Abbisko Pharmaceutical, the company has recruited dozens of R&D-related talents so far this year.
Yu Zhiwei, CEO of Hudson China, a human resources company, told First Financial Reporter: "China has always been short of R&D talents in the field of medical health and life sciences! At the same time, there is also a large shortage of top technical talents in the Internet segment. Overall, the recruitment market will still be good this year. ”