For years, tech firms were fighting a war for talent. Now they are waging war on talent.

This shift has led to a weakening of the social contract between employees and employers, with culture and employee values being sidelined in favor of financial discipline and free cash flow.

The operating environment has changed from a high tolerance for failure (where cheap capital and willing spenders accepted slipped dates and feature lag) to a very low – if not zero – tolerance for failure (fiscal discipline is in vogue again).

While preventing and containing mistakes staves off shocks to the income statement, it doesn’t fundamentally reduce costs. Years of payroll bloat – aggressive hiring, aggressive comp packages to attract and retain people – make labor the biggest cost in tech.
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Of course, companies can reduce their labor force through natural attrition. Other labor policy changes – return to office mandates, contraction of fringe benefits, reduction of job promotions, suspension of bonuses and comp freezes – encourage more people to exit voluntarily. It’s cheaper to let somebody self-select out than it is to lay them off.
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Employees recruited in more recent years from outside the ranks of tech were given the expectation that we’ll teach you what you need to know, we want you to join because we value what you bring to the table. That is no longer applicable. Runway for individual growth is very short in zero-tolerance-for-failure operating conditions. Job preservation, at least in the short term for this cohort, comes from completing corporate training and acquiring professional certifications. Training through community or experience is not in the cards.
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The ability to perform competently in multiple roles, the extra-curriculars, the self-directed enrichment, the ex-company leadership – all these things make no matter. The calculus is what you got paid versus how you performed on objective criteria relative to your cohort. Nothing more.
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Here is where the change in the social contract is perhaps the most blatant. In the “destination employer” years, the employee invested in the community and its values, and the employer rewarded the loyalty of its employees through things like runway for growth (stretch roles and sponsored work innovation) and tolerance for error (valuing demonstrable learning over perfection in execution). No longer.
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http://www.rosspettit.com/2024/08/for-years-tech-was-fighting-war-for.html