Readers Write: The Shift Toward an Employer-Driven Market in Healthcare Technology

The Shift Toward an Employer-Driven Market in Healthcare Technology
By Mike Silverstein

Mike Silverstein is managing partner of the healthcare IT and life sciences practice of Direct Recruiters, Inc. of Solon, OH.

Throughout the last few years, the healthcare technology market has been largely candidate driven. During the “grow at all costs” period that started in late 2020 and continued through fall of 2022, capital was cheap, and companies were doubling down on product that was to be delivered by expensive and newly hired engineering and data talent.

That has slowed tremendously in recent months and has been coupled with significant layoffs across most of big and medium tech. What felt like an inelastic demand for technical talent over the last number of years, which corresponded to growing compensation demands, has flipped.

Below are three market trends we are seeing that signify a shift toward an employer-driven market.

Technological Advancements

It’s no secret that technology continues to change the landscape of the global workforce. The continuous stream of new AI and automation tools being introduced has the potential to change processes, procedures, and potentially even replace human labor in some situations. According to a March 2023 report from Goldman Sachs, the automation of certain tasks could disrupt a staggering 300 million jobs worldwide.

As these changes evolve, employers’ expectations of current and prospective talent are to be able to adapt and leverage new technology to their advantage versus letting it replace them.

An Emphasis on Talent That Has a Near-Term ROI

Sales, business development, demand generation marketing, customer success, and FP & A roles are crucial right now. Investors are demanding greater discipline from their portfolio companies as the cost of capital has increased and the bottom has fallen out of company valuations, particularly in tech. Right now, each company is tasked with showing a path to break even and/or profitability. No investor wants their portfolio company to have to go out for a fundraise right now for fear of a down round.

While healthcare technology employers hire and retain talent, the pressure is high for candidates to showcase that they are results driven to land great roles. If you can help make a dollar, protect a dollar, or count a dollar – sales and marketing, customer success, and accounting and finance, respectively — there are still strong opportunities in the market. As companies strive toward profitability in a tumultuous time, there may be more uncertainty for roles further away from revenue.

The Abundance of Tech Talent

With recent layoffs, there is now an abundance of healthcare technology talent on the street with far less demand for its services. As a result, passive candidates have become more risk averse. Clients are realizing there is a bit of an opportunity to buy low(er) on some needle-moving talent.

A lot of mediocre candidates did really well for themselves over the last couple of years. Healthcare technology companies are seeing an opportunity to top grade on positions where they settled in the last 24 months, and there is added scrutiny on every candidate in the hiring pipeline.

As we face this potential shift in the market, talent that has a track record of being able to perform and execute in a capital-constrained environment will continue to thrive. Candidates who are more entrepreneurial in the traditional sense — in that they are comfortable doing more with less, versus relying on the ability to obtain unlimited growth capital whenever needed — are still in high demand, along with those with a strong accounting and operations acumen.