Employees remain confident in a shifting market, while companies hoard the talent they can find.
In this article, we explore the current state of the job market in the tech industry and how job seekers are responding to the changing landscape. Despite a spike in industry layoffs, employees are still showing confidence in the job market. Remote and hybrid work, talent onboarding, and demand for emerging skills are also driving change in the IT hiring ecosystem. Companies that stay up to date with these trends will have a competitive advantage in the hiring market and be better positioned to attract and retain top talent.
Employee Confidence Remains High After Layoffs
Despite the high number of layoffs in the tech industry, job seekers are showing great confidence in the job market. According to recent data from the Bureau of Labor Statistics, quit rates remain high, indicating that workers are willing to leave their current positions in search of better opportunities.
Although major tech companies have laid off over 238,000 workers since the beginning of 2022, economists suggest that this is a necessary correction to the over-hiring that occurred in the industry during the Covid-19 pandemic. The overall layoff rate remains below pre-pandemic levels, suggesting that the job market remains strong and job seekers have reason to be optimistic.
Remote Work Retains Talent
A recent survey from The Harris Poll and CareerBuilder on remote work provides further evidence of the shifting attitudes towards work in the post-pandemic world:
The overall layoff rate remains below pre-pandemic levels, suggesting that the job market remains strong and job seekers have reason to be optimistic.
- The ability to work remotely is now 3.5 times more desirable than it was before the pandemic
- A staggering 79% of workers felt that being able to work remotely is a necessity, not just a desire
- 51% of Millennials would quit a job if they couldn't work remotely
- Workers are willing to accept a 14% pay cut in exchange for the ability to work remotely
The attitude that remote work is a necessity is further supported by comments from Mark Dixon, CEO of IWG (formerly Regus). Dixon argues that the traditional model of commuting to a central business district is a waste of time and money and that workers don't actually enjoy it.
This perspective is echoed by a study from ZipRecruiter, which found that companies are still in an experimental phase when it comes to organizing their workplaces. While some companies have fully embraced remote work, and others have returned to entirely in-person operations, most companies are adopting some form of hybrid work. These findings suggest that remote work is not only desirable for workers but also a viable option for companies looking to attract and retain talent in the modern workforce.
Inflation and New Employment Models Present Challenges
- Inflation: The current economic landscape presents several challenges that may make hiring more difficult for companies. One of the biggest challenges is the impact of inflation on pricing for consultants and new hires. While it is still too early to predict the extent of inflation this year, it is likely to remain elevated for at least the next quarter.
- Talent Hoarding: Another challenge is the trend towards talent hoarding, which limits the candidate pool of available resources as large companies keep more skilled workers than are strictly needed. In this environment, upskilling and reskilling are more important than ever before, as skills development is a deciding factor in what jobs candidates desire.
- Freelancing: The rise of freelancing platforms such as Fiverr and Upwork is drawing professionals towards freelancing over traditional employment and contracting. This trend is particularly prevalent among younger workers who have greater confidence in improving their financial situation through freelancing.
- Pay Transparency: 82% of American workers are more likely to apply for a job if that job has a listed salary. Additionally, more states and cities are requiring pay transparency, so companies need to prepare for a time when it is required nationally.
Impact of AI on Market Conditions
Skill requirements in the market are rapidly evolving, with autonomic technologies maturing as machine learning advances. This includes technologies such as Deep Learning, Computer Vision, and Natural Language Processing.
One technology that has broken through to the mainstream is AI, with programs like ChatGPT and Midjourney making their debut. However, the use of AI in hiring presents difficulties, as AI learns from the humans who program it, resulting in an inclusion of their unconscious biases. AI trained on biased data will replicate biased hiring practices, resulting in a less diverse workforce. Despite these challenges, certain skills are growing in relevance in the market. Apex’s market knowledge comes from a broad client base, with over 1,200 clients supported in 2022 alone, including 225 Fortune 500 companies. Key takeaways our teams are watching include:
- Cloud - Cloud skills, particularly AWS, continue to be relevant, but less common skills like Kubernetes, Terraform, and Snowflake are also rapidly growing in use.
- Software Development - Continuous Integration and Continuous Deployment (CI/CD) have become incredibly important for the top-performing firms in the tech world.
- Data Engineering - Data skillsets like Python, R, and SQL continue dominating the market.
The tech industry is experiencing a period of significant change in the job market, with remote work becoming a necessity and the demand for certain skills rapidly evolving. Despite the challenges presented by the current economic landscape, job seekers remain confident in the job market and are willing to leave their current positions in search of better opportunities. Companies that adapt to these changes and prioritize the needs of their employees will be better positioned to attract and retain top talent. As the industry continues to evolve, staying up to date with trends and emerging technologies will be crucial for companies looking to remain competitive in the hiring market.