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Job market outlook for 2021: More hiring and more remote workers

After nearly a year of transitioning to a remote workforce, many companies are gearing up in 2021 for a hiring spree that is expected to be a blend of remote and on-premises employees.

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After nearly a year of transitioning to a remote workforce, a large crop of startups and tech companies are gearing up in 2021 for a hiring spree that is expected to be a blend of remote and on-premises employees.

Of the more than 200 respondents to a new J.Thelander Consulting-PitchBook survey, almost 90% of private companies said they are hiring in the new year.

Some tech founders said that flexible schedules and shifting employee attitudes about work from home are likely to play a big role in shaping how companies compete for top talent and rethink hiring for the long term.

Lockdown restrictions are beginning to ease in some cities, but the work-from-home phenomenon has become a standard feature of the digital workplace.

More than 80% of US employers said the shift to remote work has been successful for their company, according to a late 2020 survey by PwC of 133 executives and 1,200 office workers. Looking to the post-pandemic era, over half of employees said they would prefer to work remotely at least three days a week.

“For many companies, doing business virtually is not a point in time but rather a permanent paradigm shift, and recruitment tactics and tools need to mirror this,” said Ryan Healy, president and founder of Brazen, a developer of software for virtual recruiting events.

That could mean a host of new market opportunities for recruitment startups that offer software for screening job candidates, improving employee communication and addressing unconscious bias.

With bigger companies like Facebook and Twitter hiring from anywhere, more employers at small companies will feel pressure to say they are hiring remotely as well, Healy said.

In the chaotic early months of the pandemic, venture capitalists and private equity investors advised portfolio companies to pause hiring plans and hold onto cash.

There is no lack of confidence or capital for many in the tech industry, said Matthew Abbott, head of recruiting services at recruiting specialist The Sourcery, but there is a fight for talent.

Some hiring in 2021 has closely followed capital infusions that helped portfolio companies get through the economic crisis. US startups raised more than $156 billion of VC funding in 2020, according to the Q4 2020 PitchBook-NVCA Venture Monitor, hitting a decade high and defying the odds in an unprecedented year.

Many startups could face an upheaval later this year as employees seek out jobs with companies that allow remote or more flexible work models.

“When the pandemic hit, many companies rightfully got spooked and paused hiring,” said Brazen’s Healy. “What I see happening in 2021 is tech companies making up for some of the freeze that they had in 2020.”

A record-setting year for fundraising in 2020 underscored the ability of the VC ecosystem to weather the crisis. Many startups also made a difference by freezing pay raises for higher management, the Thelander-PitchBook survey found, helping them avoid layoffs.

Those kinds of decisions may have helped employers build up some goodwill with job candidates when hiring picks up in competitive labor markets, Healy said.

About 86% of companies in the Thelander-PitchBook survey said they didn’t cut salaries as a result of the pandemic, and 81% reported that they don’t expect to modify or adjust their bonus plans.

Check out all our past coverage here. And visit J.Thelander Consulting for more compensation information.

Featured image by Julia Midkiff/PitchBook News

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    Written by Priyamvada Mathur
    Priyamvada Mathur writes about venture capital at PitchBook.

    She is an Indian chartered accountant and has studied economics and journalism.
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