At first glance, the headlines appear to be bleak. In May alone, more than 15,000 tech workers lost their jobs, and Fortune magazine reported that amid a decrease in demand and rising inflation, the tech industry wasn't looking good.
Let’s take a look behind the headlines.. Interestingly, the data appears to contradict this doom and gloom. So, we’re spotlighting how we see things from a data-led perspective. Spoiler alert: The picture remains somewhat unclear.
With that said, here’s our take:
Demand For Flexible Work = More Tech Jobs?
As remote and hybrid working arrangements show no sign of slowing down, it's not surprising that businesses began hiring IT experts to this trend.
Interestingly, employer job postings indicate that companies looking for tech talent are doing so across a wide range of geographical areas and industries. The biggest number of jobs are in scientific, technical and professional services (70,377), manufacturing (52,007), and finance and insurance (49,598). In addition, demand was high in retail, health care, public administration, and education services.
Also, according to data from CompTIA, a nonprofit association for the IT industry, tech companies successfully added 22,800 employees for the 18th consecutive month. On top of that, tech-related job postings reached a new high in May.
Also, according to a U.S. Bureau of Labor Statistics job report, employment in this industry is almost 70% ahead compared to the same time in 2021. As for employer hiring activity, there were 623,627 tech positions open in May, a 52% increase from last year.
Examples of where there's demand for specific job roles include software development (12,300+ jobs).
Tech Unemployment Rates Remain Low
The good news for tech employees is that thanks to demand. Employment in tech has grown 6% over the last year. And the unemployment rate for tech workers is around 2%. However, on the flip side, it's harder for employers needing to fill tech positions. In fact, Janco forecasts that by the end of 2022, 138,000 new tech jobs will be created.
So what does this mean for recruiters?
Challenges and Opportunities For Recruiters
Given that our statistics demonstrate that tech jobs look like they'll remain in demand in post-pandemic times, what does this mean for recruiters?
Businesses looking to fill tech roles may not have big enough compensation budgets. Unfortunately, there’s no one way to address this issue. Still, it’s possible that offering tech employees remote/hybrid working opportunities, combined with compensation packages offering non-salary benefits such as paid time off, family-friendly policies, etc., may make job offers with lower salaries more attractive to tech experts.
Using data to inform hiring decisions in this landscape can help employers hire homegrown tech talent.
It Might Be Time to Widen the Net
It may be that U.S. employers looking to hire tech talent have to extend their net internationally. In 2020, however, migration to the U.S. was limited. This was partially due to the pandemic, which imposed travel restrictions. On top of that, former President Trump imposed limitations on H1-B visas in an effort to reduce U.S. immigration. In contrast, under President Biden, there’s a renewed effort to make it easier for businesses to obtain visas for their workers.
According to one report, the top countries with the highest Global Skills Index for technology are:
- Costa Rica
- The Philippines
This isn’t breaking news. More than 50% of CEOs expressed concern over the lack of U.S. tech talent a decade ago; by 2019, as many as 79% of CEOs were worried.
If you’re considering hiring from abroad, you’ll need to consider your compensation offering carefully. While the salaries of employees working remotely can match their regional living costs, those having to relocate often demand higher compensation packages (and understandably so). Fortunately, ThinkWhy draws upon detailed compensation data from across the country to help you research and prepare competitive compensation packages.
Employee Satisfaction Has Never Been More Important
Given the tech talent shortage, recruiters need to know how their existing tech employees feel about their jobs. With this information, they’re better positioned to up their game where retention is concerned.
It’s worth noting that according to one survey, 72% of U.S. tech employees are considering leaving their jobs in the next year, with 40% citing a lack of career progression playing a part in this decision. Other reasons include:
- Lack of remote working.
- Feeling undervalued.
- Lack of work flexibility.
- An unpleasant work environment.
Concerningly, 85% feel their employer was more focused on attracting new employees than investing in the existing workforce.
The bottom line: Considering these stats, there’s a chance you may have to address employee morale. Otherwise, you might risk losing tech talent to competitors.
Using Specific Data-Driven Solutions For Hiring Tech Talent
What’s clear is that leaving things to chance when hiring tech talent isn’t an option. As the intro mentions, employers may well capitalize on hiring recently laid-off talent. But this strategy isn’t a given. Instead, the most effective approach is for employers to use technology to hire technology experts.
- Compensation planning analytics to generate strategic recommendations that inform the salary to pay per job, industry and location
- Labor market analytics to source geographic and demographic information that show where tech talent can be found
- Total compensation metrics to identify more than just salary trends in different sectors - for example, the impact of flexible working and benefits on staff retention.
- Salary benchmarking to help analyze the salaries you pay your tech team and compare them to similar tech jobs in other companies. This is handy for identifying salary gaps so that you can make necessary adjustments to retain and recruit top talent.