During the Covid-19 tech boom, many companies began to scale rapidly and the tech industry experienced the hottest hiring market ever. In 2022, global events led to companies struggling to raise capital and layoffs, especially in the United States and Europe. In this article, we’ll unpack what happened in South Africa in 2022 and what that means for developer hiring in the year ahead.
What Global Hiring Trends Did We See in 2022?
During the Covid-19 pandemic, low interest rates coupled with an increased focus on digital tools and e-Commerce increased funds available to tech companies, especially in the United States. This massively increased valuations of Big Tech companies the likes of Meta, Twitter and Amazon. It also inflated funding given to startups and late-stage scale-ups.
For example, Meta went from a $150 share price in the early stages of the pandemic (March 2020) to $378 in September 2021.
In turn, this led to rapid hiring to support company growth. The availability of easy funding also led to skyrocketing salaries for engineers. However, business profitability has failed to keep up with growth. As a result, many of these companies are now struggling to raise capital and implementing layoffs.
In addition, the Russia-Ukraine war, and the worsening trade wars between China and the United States, has contributed to a tough outlook for the global economy and sparked fears of recession.
Instead of chasing growth at all costs, businesses are now focused on capital-efficient growth.
How Was South Africa Affected in 2022?
While South Africa’s tech industry isn’t immune to the global cool down, the picture wasn’t as bleak in 2022. Data from more than 4500 developers who responded to our State of the Developer Nation survey showed that less than 3% reported being retrenched from their jobs in 2022.
“Have You Been Retrenched In 2022”:
In addition, more than 80% of developers responded that their companies did not retrench any developers in 2022:
“Has Your Company Retrenched Software Developers In 2022”:
What has shielded South Africa from the worst of 2022’s global cool down?
“We might be seeing a slower knock-on effect because of our relatively weaker funding environment. That sounds backwards at first, but the market changes are primarily affecting companies that are dependent on venture capital.”
- Philip Joubert, CEO of OfferZen
South Africa has more bootstrapped businesses that are relatively more robust when funding is less easily available. That said, things change quickly in tech, and the situation might change in South Africa in 2023.
Key Takeaways For Your Hiring Process in 2023
For developers, there are still many strong local job opportunities.
For employers, if you want to drive a profitable business and keep your costs down, retaining your top developers is just as important as hiring the right new talent.
Software remains a dominating force across the globe, with the number of industries relying on quality software increasing every year. In addition, hiring is no longer hyperlocal: You face competition from companies across the globe that aren’t restricted to recruiting developers from the same city or even country.
This means that demand for excellent talent will continue to outstrip supply: For companies with solid foundations, there are still great developers on the market looking for their next career step.
In fact, the data from our survey shows that 30% of developers are still looking to change roles in the next twelve months.
To attract and retain developers, the data is clear. A good work-life balance is key: It’s the number one reason developers would stay in a job, as well as a top driver for team members to leave if it’s lacking.
Keep your eyes out for the second part of this series, where we’ll deep-dive into what you need to know to hire developers in 2023. Be sure to also check out our Developer Hiring Guide for guidance on the entire hiring process, from best practices, to nailing your outreach and making an offer to developers.
What are you seeing happen in the South African tech industry? If you have any on-the-ground insights to add, we’d love to hear from you in the comments below!
