In the Facebook group “Problems in Hi-Tech”, an anonymous friend wondered last week how to refuse the manager of the company where he is a candidate to hold an introductory telephone conversation at the expense of time with the family. “Since I’m still working, he suggested calling at 7:00 p.m. I tried to explain that it was inconvenient for me,” he wrote. “The next day he didn’t get back to me on WhatsApp.” If this post had appeared about a year ago, it is assumed that the various commenters would have suggested that the candidate insist or move on to the next option, but this is not the reference he won.
“I wouldn’t go back to you either,” answered one of the respondents. “You need him, not him you.” Another surfer added: “You don’t find a quarter of an hour out of your day to interview. There are thousands of job seekers, why would he chase after your majesty?”.
For the sake of fairness, we note that these responses were accompanied by agreement, but also by criticism and claims of exaggeration. However, they are a clear example of the changing sentiment in the market, and in particular in high-tech – employees can no longer change the rules of the game, and above all – it appears that, at least at this stage, the power is not in their hands.
“The Big Boot”
In a TikTok video that garnered almost 122,000 views, surfer “Onegirloneworld” from the USA wonders: “Maybe all the big layoffs are a way for the companies to take the power back into their hands. There are many reasons why companies downsize, but only recently have employees stood up and demanded what they deserve in terms of conditions and pay, even when it didn’t really match their experience. Given the capitalist society, I assumed that something would always come along to put us in our place.”
As part of the change in the balance of power, do companies recruit new employees at a lower salary? On the Business Insider website this week, a recruiter in the USA testified that at the end of 2020, employees received a starting salary that was sometimes higher than that of the manager. It seems that the new trend is not only expressed in salary, but also in benefits. Some call this – the “big reboot” (Reboot).
In the background of the startup, some are talking about monopsony – changing the balance of power in the market. According to an internal document obtained by Eugene Kim of Insider – Amazon, which only recently laid off 18,000 employees, is now focusing on recruiting students and juniors as software developers, since “experienced engineers tend to receive higher wages.” Amazon told the insider that “the elimination of positions did not significantly change compensation costs, and unlike other companies, we do not reduce any employee’s salary.”
replace standard with standard
The question arises, do the large layoffs, also here in Israel, allow companies to replace employees, sometimes at a lower salary, and is this situation the great opportunity for the juniors? Shiri Wax, CEO of the high-tech placement company Goodfriends from the SQlink Group, disagrees with this assumption. “The reality of the juniors is still bleak, and they can’t find work,” she says. “We don’t see layoffs just to recruit others at lower and reasonable salaries.
“What we do see is that if there is a turnover, it is of mediocre stars, those who were recruited in the last year and did not meet expectations. Today, companies are recruiting those who are ‘ball in pony’, this is replacing a standard with a standard, because a standard costs more than an employee’s salary I see companies that lay off dozens of employees and their names hit the headlines, and a week later they hire, when this time they are less willing to accept ‘hiring mistakes.'”
Tamir Avihud, co-founder of the personnel management company Link2USA, also believes that the situation of the juniors is still far from perfect. “You see a lot of companies that are in their money time, that need to move to profitability, so they don’t have the ability to invest in juniors or weaker employees.”
As mentioned, it’s not just about salary. “Juniors require mentoring, support and overlap,” notes Aya Lachmi, organizational consultant and occupational psychologist, founder and CEO of AL Consultants. “Precisely in difficult times when organizations need to ‘do more with less’, they will not recruit inexperienced employees.” Lachmi too Does not recognize layoffs in Israel just to recruit at a lower salary, “but if you have an employee whose salary does not match his abilities, it is likely that he will not stay, and in his place an employee will be recruited at a reasonable salary.”
A gap in expectations
Adv. Dafna Shmoelwitz (full disclosure: Adv. Shmoelwitz also advises Globes), an expert in labor law, points to a different trend. She refers to the fact that returning to offices, as many companies have recently begun to demand, is sometimes more suitable for young people looking for a company, than for veteran workers with families.
According to her, “The possibility of working from home is a convenient way to manage the family unit. There is a gap between the expectations of the veteran employee and what the organization is willing to offer him. A new employee, especially a young one, is more open to suggestions.” Therefore, it is more convenient to hire a starting employee.
Regarding parting with employees, Shmulevitz recommends that dismissal be a last resort. On the other hand, she mentions, not every employment contract talks about working from home. “Not appropriate? You have the right to resign.” Another possibility to be flexible is to offer the employee to come to the office less, but without benefits such as car expenses, or to add tasks at the same salary.
“It is important in the hearing to offer some kind of alternative. I have seen cases where employers have already closed with a new employee before the hearing procedure, which makes it a semblance of a hearing, and there are situations where an employer lets a ‘push’ employee leave.”
However, Shmuelwitz does not see this as a sweeping phenomenon. “There are companies that are looking for technological skills that young people have, but I say to employers that it is very important to have the right mix – it is healthiest for the organization to grow managers from within, and you need three generations in the team.”
Not only in high-tech
The change is also reflected in non-high-tech companies. Amnon Shaked, a consultant and advisor to CEOs and in the past CEO of telecommunications and hi-tech companies, says that “all the CEOs I spoke with in 2022 suffered in the war over salary or bonuses, and sometimes made such decisions too quickly. In many cases today, workers are recruited at lower wages. There are certainly companies where if the marketing manager leaves, they will replace him with someone with a lower salary.”
Shaked mentions the dilemma of whether to fire 10% of the employees or reduce everyone’s salary by 10%. “Personally, I think that the sweeping salary reduction is not good. That way, the management always remains in a position where it owes something.”
Shaked also talks about managerial courage – “There is a process of renewal and providing new opportunities, so sometimes hiring juniors is the preferred option. Managers need to understand that they are growing the talents and not the talent running the organization. The success in essence is 80% because of the place and 20% Thanks to the talents. Courageous management means bringing in juniors and bringing salary levels back to sanity. Obviously, it costs money to teach and absorb an inexperienced employee, but a veteran employee who is sure that he deserves everything also costs money because he creates a toxic environment. Not everything is black and white, and sometimes you need courage refresh the ranks”.