Each year, Product School, one of the foremost product training and certification agencies in the world, released their 2023 Future of Product Management Report. This report is a snapshot of trends in the field of product management for the year and, for product managers, can be a helpful way to gauge career goals and professional decisions that they will face over the coming months. This can be especially helpful during times of economic uncertainty and projected recession.
I will outline some of the key trends and datapoints from the report and think about them in the context of previous reports and technology career trends as a whole.
What is the state of Product Management in 2023?
The report identified three trends primary trends in the field for this year:
- In times of economic uncertainty, the best products win.
- Product has earned a seat at the table - right up to the C-Suite.
- Companies are scrambling to keep their Product Talent around.
Ok that all sounds great. But…what does that mean, exactly? Let’s take a look at each.
In times of economic uncertainty, the best product wins.
At the heart of this finding is a pretty striking piece of data regarding Customer Acquisition Costs. CAC is a measure of the amount of money an organization invests to acquire a new customer. Per ProductPlan, it is “…the total cost of sales and marketing efforts, as well as property or equipment, needed to convince a customer to buy a product or service.”
If done correctly, at a certain point the investment of the customer back into your organization will not only pay for the CAC, but will lead to profit.
Based on data presented by Product School, the impacts of the COVID-19 pandemic have drastically impacted CACs, increasing these costs 222% between 2013 and 2022. For comparison, between 2014 and 2019 (before the pandemic) CACs increased between 60% and 75%.
In responding to this and trying to maximize the lifetime value of their customers, organizations increasingly rely on their product teams. Product teams are inherently customer-focused and lean heavily on quantitative and qualitative data to make decisions. By leveraging these skills, organizations are seeking opportunities to hew as closely as possible to customer needs to optimize for that lifetime value.
The takeaway here is that in 2023 as organizations struggle to catch up with the impact of the pandemic, product professionals are well placed to advocate for and lead customer-centric initiatives that have very real financial impact.
Product has earned a seat at the table - right up to the C-Suite.
Probably not surprising given the information presented above, organizational structures have shifted to reflect the importance of product thinking and the product leaders driving these initiatives. Historically, product teams outside of big tech might report to more traditional business units - often Marketing.
The report notes that one third of Fortune 100 Companies now name a Chief Product Officer among their C-Suite, a 41% increase over three years. This once again points to the impact of COVID-19 on customer experiences, needs, and goals, and how organizations are shifting to respond by leaning on their customer-centric product teams.
Companies are scrambling to keep their product talent around.
Similar to customer acquisition costs, new employees represent an acquisition cost of their own. This cost can vary widely but according to the Product School report, the cost of hiring and onboarding a new Product Manager can be up to $263,200. According to this report by the Society for Human Resource Management, hiring costs are on average 3 to 4 times the salary of the position so this trend increases exponentially the more experience a role requires.
Between the increasing value in product contributions and the cost of hiring, it is no wonder that companies want to hold onto their talent. Nevertheless, the report notes that 93% of companies are concerned about talent retention. The report notes that feedback from respondent product managers points to professional development, employee experience, and product impact. Whether organizations respond to address this is a question that only time will tell.
How does this fit in with job trends within technology at large?
The TL;DR from the Product School report, on the surface, seems to indicate thumbs up all around for product management. And to drop a grain of salt into this PM celebratory cocktail, Product School has every reason to promote the career path to keep enrollment of their bootcamps up. So how accurate is this portrayal?
There have been a number of headline grabbing layoffs throughout the year, with over 84,000 in January alone. While this looks bleak, LinkedIn reports that at a more macro level, the overall jobs outlook for 2023 is still positive, including for technology jobs. Unemployment is at 3.4%, the lowest it’s been in 50 years, with unemployment in the technology sector a mere 1.5%. The same report cites data from Gartner projecting technology companies to grow spending by 2.4% over the remainder of the year. Interestingly, the Product School report also points out that, of the recent layoffs within tech, very few of those roles impacted were product managers.
Viewed holistically, it would appear that Product School’s positive report on the outlook of product does withstand scrutiny. While many tech companies (particularly the MAMAA companies) are responding to the hiring boom of 2020/2021 and to forecasts of recession with layoffs, these measures do not reflect the growth outlook of technology careers as a whole and of careers in this industry, the value that product managers bring to their organizations is highly valued.
My Takeaway
Reading this year's report and assessing this information in the context of overarching trends in the technology career trends and outlooks, I am left with this key takeaway: Product is for everyone.
At the organizational level, it has become clear that product-thinking and product-led business strategies are not only important to big tech. Any organization that wants to remain competitive must leverage their digital footprint to acquire and keep customers.
At the professional level, the value placed on product-thinking and product leadership have positioned this career path as one that can deliver significant impact and growth.
What Next?
There are lots of great reports from different product organizations that are available! Depending on the organization behind the report, the research will offer different insights into such topics as product’s work within an organization.
If you are interested in learning more about transitioning into a career as a product manager, or growing in your current career as a product manager, I would be delighted to provide mentorship guidance to help you define and accomplish your goals.
References:
- https://www.productplan.com/glossary/customer-acquisition-cost/#:~:text=Customer%20Acquisition%20Cost%2C%20or%20CAC,buy%20a%20product%20or%20service.
- https://www.shrm.org/resourcesandtools/hr-topics/talent-acquisition/pages/the-real-costs-of-recruitment.aspx
- https://techcrunch.com/2023/06/05/tech-industry-layoffs-2023/
- https://www.linkedin.com/pulse/2023-tech-hiring-trends-marina-perla-/