The war for talent has been raging for years in the tech industry, and the pandemic only made it more intense. But now the tide appears to be turning: mass layoffs, employers pushing back against candidate expectations, a shift towards building rather than buying and skilling rather than hiring.

What does this look like from the inside? People Matters met up with Jennifer Dudeck, Chief People Officer of Red Hat, during her recent visit to Singapore, and asked for her take on how hiring in tech has evolved and where it might be heading next.

Dudeck has been in the tech industry for decades, having spent a good 20 years at Cisco before moving to Red Hat in 2021, and has seen the industry's approach to talent evolve from the early years of tentative pipeline-building, to today's confusion of hiring and firing. Here's what she had to say about it.

This story was originally published in the March 2023 issue of People Matters Digital Magazine.

What's your take on the whole hire-fire cycle that the tech industry has been going through?

When you're in an environment like the one we saw for the last few years, where most of the tech companies – including Red Hat – have high double digit growth, it allows you to be less precise about what skills you need, where, and even how many roles you need.

I can say this from experience, because for Red Hat in past years, we just didn't need that much precision. Frankly, we had such high growth that we were in a position to hire first and figure it out later. Well, that was then, and we're at a place now where we have to recognise that we're a more mature company. We're a very successful company – but we're not a startup any more. We're 30 years old and we have 20,000 people. At this stage of growth, we do need more precision now, in terms of where we're making investments, how we're hiring, how many roles we really need to do certain types of work.

So with our hiring processes today, we're being more intentional about what we do. Every one of us in the people team is a steward of the company and our fiscal resources. And so we are prudent: if I have the budget for 100 roles, I have to decide, how many of those do we need in engineering? How many of those do we need in sales? We need to ask questions like: “Is it really worthwhile for me to have another person working on a process I can make more efficient? Or should I have an engineer that's building the next generation of technology?”

I'm not saying that we won't grow our head count – we will – but as a company, we are at a stage of maturity where everything is a trade-off. That's just the reality of things.

In other words, the focus is workforce planning?

Yes. Workforce planning to us means that we will look a year or two ahead, and we will be thoughtful, intentional, precise, around where we're going to make those headcount investments. We don't get to invest everywhere – no mature company does – we have to make choices, whether it be by role, by function, or by region. This is very different from how a fast-growing startup would invest, lighting a thousand fires until something works. Where we are now, we have to have a thoughtful process.

It also means we may have to make hard decisions around where we have over invested – all mature companies have to do that. But my commitment to our associates is that we will always be objective, fair, and consistent. We will be thoughtful and intentional. We won't just be swinging on a pendulum between hire and fire.

When making these choices, how do you factor in the short shelf life of tech skills and the shortage of many specialised skills?

I spent quite a few years in learning, so I have very strong points of view on this. One, we know that people often learn best through application. So we have to not only put people through courses, but make sure that there is an element of application at some point.

Two, the market for the talent and skills that we need is confined. There is not enough global talent in areas like AI and software. So companies have started to get more creative around their approach. Do we really need to always use traditional routes? Do we always need to hire through universities? That's where industry certifications and hands-on experience come in.

Three, we're always going to need specific skill sets. We can't run a tech company without hiring software engineers, for example, or computer scientists.

And because of all the above constraints, we have to get more and more creative around where we find people and what are our minimal requirements. We can teach people to do a lot of things, we can get them hands-on experience with a lot of things within Red Hat. And I also care about the qualitative things. I would rather find a person who's resilient, adaptable, a critical thinker, a problem solver, even if they may not have direct experience in something, and give them that experience.

That's one of the things we're working on: creating more internal fluidity so that I can take an engineer and move them across domains, or take that IT person and move them into site reliability engineering.

On the topic of hiring and skilling, you've been in the tech industry for decades – how have you seen the industry's approach to talent evolve over the years?

When I started with Cisco over 20 years ago, it was just the beginning of the tech wave and there was no infrastructure to build the skills that we needed in the industry. So companies spent a lot of time working out how to partner with universities to grow the talent pool, in the US, in India, everywhere we saw the industry growing. At Cisco, as an example, we worked with North Carolina State University and convinced them to build a software curriculum with the promise that we would hire them all – because we were going to need more talent than they could even produce. That was phase one, building the foundation. It was a really nascent talent base, and we didn't really know what we needed.

Then we went into the recessionary period, and people weren't hiring. And then we came into this heyday where it was insanely competitive, because we just couldn't get the amount of talent we needed. Everyone was trying to fight Google, or Microsoft, or the other big names – almost like our business was to compete for talent. And this war for talent wasn't even about what we needed these folks to do. It was almost a gold rush to just get out there and grab everything you could. That was phase two.

And then all of a sudden the talent pool was too small, and that's where companies started to get creative. The traditional talent markets weren't enough, the universities were too slow, there were immigration issues with bringing people in from elsewhere. So companies were innovating as much as they could just to hire. That was phase three.

And now we're in the phase of precision, where not many tech companies are going to go out and simply hire as many people as they can.

They're going to be much more focused on what they need, where they need it, and what are those specific qualities that make a person a good fit.

Do you think the war for talent has cooled, with the current industry situation and the overall global economic environment?

The last major recession we had, in the US tech industry and globally, was 2008. That means we've had approximately 15 years of new talent coming into the market, and all that talent has ever known is the war for talent. What more can you do for me? What more are you going to give me? How much more are you going to pay me? I'm not saying that everyone who joined us over the last 15 years are mercenaries. But there is a certain orientation where we've just been all about how we compete to win the war. I'm not passing any judgment, I'm not saying it's wrong – that was just the environment.

But now we have a whole mindset shift happening. Companies like Red Hat, like Microsoft and Google, are starting to say, we need associates that are with us because they want us to be successful, not just because of what we give them. We will be competitive, we will value you we will give you us all sorts of wonderful opportunities. But we can't just have you here because of what you get from us. We need you to want to win with us. And I think that's the next phase of how we think about talent. As a company, we can't continue to be in a place where the relationship between us and our people is a one-way street. We need people to come to us because they believe in what we're doing.

For a generation that has spent their entire working life only knowing the war for talent mentality – if I don't like it here, I'm going to leave – it will be interesting to see how it plays out when that option to simply go somewhere else isn't as available.

It seems companies will have to play a major role in changing the direction talent acquisition has taken. What are your thoughts on how to do that?

We have to be comfortable with our identity as a company. I had a conversation with someone in India, who told me they are really struggling to compete with startups.

And I said, “Nor should you try. We're not a startup. We just need to get comfortable with the fact that we are a large, mature organisation. We are 30 years old. We have 20,000 people. And there's goodness to that.”

People will make choices around what energises them, what kind of environment they want to be in. But this notion that we have to somehow make ourselves present as a startup? That's just not something we should be trying to do. At Red Hat I'm really pushing for us to get comfortable in our skin and recognise the value that being at this point of maturity brings. Including the fact that as a larger mature company, we've gotten to a place where we've figured things out. We know how to manage processes. we know how to make life easier at work, we have more career opportunities.

If you think about why people stay with a large, established multinational, it's because such a company gives you the opportunity to have many careers in one place. It gives you the opportunity to try many different things. So people don't leave. And that's my aspiration for Red Hat, that people want to be here because they know they will have many opportunities, because we're viewed at being the best at how we grow our talent. That's part of the value proposition moving forward.

And I also don't want us to be fearful that people might leave. Yes, I want critical talent to stay, but I'm also okay if we are known to be somewhere that has great talent, that people want to get our talent. And even we have to compete to keep people, I'm cool with that, because we'll keep finding ways to make Red Hat a great place to work.