Korean tech startups become more prudent in hiring amid bubble warning

2022.05.30 10:45:12 | 2022.05.30 10:45:39

[Photo by Park Hyung-ki]이미지 확대

[Photo by Park Hyung-ki]

Small information technology (IT) startups are joining tech giants in a move to become more prudent in hiring this year as the global macroeconomic environment has turned more adverse amid building inflationary pressures that has led to higher interest rates and restrained venture investment.

It is getting harder to attract massive investments into startups from venture capitals this year as concern over another dot.com bubble is growing, and the worldwide tightening is accelerating to tame inflation. Against the backdrop, it is advised to reevaluate corporate value of tech and IT firms, and startups have turned to be very discreet in hiring process to recruit best talents.

“Last year, the hiring market for developers was heated up. It seems to cool down a bit, this year,” said a chief technology officer of an IT firm. “As a tech bubble becomes a topic in the industry, investments to startups have reduced,” he added.

Skilled developers with college and career backgrounds are still in high demand, but it is a different story for rookies just out of a short-term IT development training course, said sources. Firms believe one skilled developer can produce more than ten trainees who often need extra training to be places into real development projects, startup HR officials said.

They even prefer outsourcing instead of regular workforce hires to save fixed costs. Now job outsourcing firms have emerged to supply and manage offshore freelance developers from India, Southeast Asian countries, or Mongolia.

If investors continue to remain cautious about venture investments and another dot.com bubble bursts, salary to developers and engineers could go down rapidly, warned market experts.

By Oh Dae-seok and Jenny Lee

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