Tech Recruiting: State of the Industry and How to Compete
While economic uncertainty will continue to make it difficult for businesses to forecast their hiring needs, the tech job market continues to expand with great aim and ambition. According to the U.S. Bureau of Labor Statistics (BLS) projections, occupational growth for software developers, quality assurance analysts, and testers will surge 22% by 2029. That long-term growth forecast for tech employment is bolstered by today’s increasingly positive hiring sentiment across businesses.
A recent Dice Tech Job Report found that tech job postings are up 25% year-over-year (Jan–Oct 2021 vs. Jan–Oct 2022). Although 85,000 workers in the U.S. tech sector have reportedly been laid off this year, more than 375,000 tech jobs remain unfilled. With employment momentum strong and tech talent needs high, marketplace insight is one of the best tools hiring managers can leverage in their recruitment efforts. How have the ups and downs of the economy shaped demand today? What are the trends in compensation and perks in 2023, and will trends in compensation and perks that originated during Covid continue?
We’ve gathered employment and market data to help hiring managers assess the state of the job market and the expectations of job seekers in 2023. Use them to gain insight into the candidate mindset, win leadership support for your IT recruitment strategies, and build a future-focused workforce capable of supporting your innovation goals.
Tech Jobs See Modest Uptick in Growth
Although overall hiring is leveling off after historic highs according to LinkedIn Global Talent Trends, it’s still a jobseekers’ market for tech talent. According to the CompTIA 2022 State of the Tech Workforce report, tech occupation within the tech industry is projected to grow 3.5%, and tech employment across the economy is expected to grow at 1.4%.
Demand for Tech Talent Remains Strong
In 2022, tech hiring and the growing demand for IT skills has continued to gain momentum and outpace hiring overall. By November 2022, a recent TechServe Alliance IT employment report indicated that, with an IT unemployment rate of just 2.3% as of the end of Q3 2022, demand is still high for many highly-skilled roles in tech. TechServe Alliance CEO Mark Roberts noted, “Fundamentally, there are simply not enough people to fill the vacant jobs, and that will not change in the foreseeable future.”
The Bureau of Labor Statistics estimates that the overall employment of software developers, quality assurance analysts, and testers is projected to grow 25% from 2021 to 2031, a bright spot in broader workforce trends. In Q3 2022, Software Engineers were the second most in-demand job, with the greatest number of LinkedIn posts, and DevOps Engineer held the seventh place for most in demand, according to LinkedIn.
According to research from Korn Ferry, the technology, media, and telecommunications sector will see the talent shortage grow to 4.3 million workers by 2030, equaling unrealized output of $449.70 billion.
The big lesson in the tech jobs data for hiring managers and business leaders is that despite challenges that arise amid an economic downturn, the competition for tech talent continues as the supply of talent remains constrained.
Wage Competition is Strong : Be Ready to Pay
Wage inflation, and a global field of competitors is also an issue. However, looking to hire globally can help overcome critical tech shortages and embrace a new kind of talent-driven globalization. According to CompTIA, median tech wages are already 89% higher than the median national wages. Still, Hired 2022 State of Tech Salaries report showed that despite an increase in tech salaries in 2022, remote respondents (42.3%) and local respondents (29.1%) surveyed do not feel their salaries have kept up with rising inflation and living costs.
Dice’s What Matters Most to Tech Professionals Today 2022 Tech Sentiment report found that 52% of survey respondents indicated they’re likely to switch jobs in the next year, up from 44% last year. Additionally, “Only 19% of respondents indicated they received a merit increase larger than 5% in the last year, and that may be one contributor to a larger percentage of technology professionals looking for new jobs.”
Flexibility Is Key: Consider Permanent Remote
Remote work is a highly sought-after perk. The Dice 2022 Tech Sentiment report states, “Fully remote work remains important to most technology professionals, surpassing interest in a hybrid working model.” In fact, “technology professionals’ preference for fully remote work is only increasing, rising from 53% in 2021 to 60% this year.”
The flexibility tech workers gained during Covid is not something many are willing to give up. Employers willing to accommodate work-from-home arrangements for their tech teams will have a solid recruiting advantage over those that don’t. They offer today’s most sought-after job perks, removing many geographic limitations and embracing a bigger pool of applicants who can work from anywhere.
Upskilling and Talent Development
With unrelenting competition from all sides, creativity will be vital to filling jobs and finding ways to accomplish technology goals in the years ahead. Listening to what your most productive and innovative tech workers are looking for and what they love about the work is a great place to start. Let them help you build a talent engagement plan.
Working with a tech recruitment partner when talent gaps threaten progress can keep your business moving forward. Let them supplement your IT workforce.
And remember to make the workplace a place where talent can hone their tech skills. Hiring for every skill gap will not always be an option when competition is strong. However, upskilling and developing talent is always an option. For those eager to lead and innovate, it’s more than an option; it’s a key part of the path forward.