Even with the US economy doing well by most measures, technology job seekers often find it difficult to get hired. It’s a conundrum.
The unemployment rate remains at near historic lows (from 2.5% to 3.8%, depending on the data source), but corporate layoffs have continued in earnest and some traditional IT skills are often no longer in demand. Online hiring platform Indeed recently found that tech jobs including software development remain 30% below 2020 levels, and that 79% tech workers feel pressure to upskill because of the rise of generative AI.
Those kinds of changes have prompted more workers to cast about for new jobs; this year, 34% of survey respondents said they are actively looking for work, up 11% from 2023. (The same percentage said they’re worried about layoffs in the next year, and four in 10 said if their company makes job cuts, they expect to be affected.)
Job data over the past two years have been a mixed bag of good times and bad; 260,000 tech workers were laid off in 2023, with another 142,000 getting pink slips so far this year, according to Layoffs.fyi. At the same time, US unemployment data released last month showed unexpected growth overall for tech job listings and hiring, along with a marked shift in the kind of workers organizations need — AI talent is no longer at the top of the list.
So what’s going on?
“While the labor market overall is performing well and unemployment is low, some sectors are doing much better than others,” said Allison Shrivastava, an economic research associate at Indeed’s Hiring Lab.
IT and tech-related sectors expanded during the post-pandemic boom, with job postings in software development reaching well above pre-pandemic levels, according to Shrivastava. Some of the decline in hiring now could be a correction to that rapid expansion.
“These sectors are also pretty costly to hire in, both in terms of time and money, so employers could be more cautious in expanding their employee base, favoring a wait-and-see approach while the labor market settles,” she said.
Janco Associates
ZipRecruiter’s latest Job Seeker Confidence Index has dropped to its lowest level since the index began in early 2022, with job seekers’ confidence in the labor market and their own financial wellbeing down sharply. Fully 41% of job hunters said it’s now much harder to find a job and slightly more, 43%, said their search is going poorly, ZipRecruiter found. Only 13% described their job hunt as going well.
Fewer opportunities for some, more for others
More than half of job seekers (53%) said there are fewer opportunities than just six months ago, and 34% have had to expand their search outside their usual field, ZipRecruiter said. Part of those frustrations could be because the mix of companies that are hiring has changed.
Industry observers say smaller organizations have been scooping up talent left in the wake of more than two-years’ worth of layoffs by bigger corporations. That could explain why the number of unemployed IT professionals in the US dropped last month from 148,000 to 98,000, according to IT industry consultancy Janco Associates, which drew its findings from a US Bureau of Labor Statistics (BLS) data for Septermber.)
Highest in demand technology platform skills and % change in demand year over year (Aug 2023 vs Aug 2024)
Indeed
By Janco’s tally, more than 78,000 IT pros were hired in September, cutting into unemployment. “IT pros who were unemployed last month found jobs more quickly than was anticipated, as CIOs rushed to fill open positions,” said Janco CEO Victor Janulaitis. “Our analysis predicts the same will be the case for the next several months.”
Janco pegged the September unemployment rate for IT workers at 3.8%, down from 6% in August and now below the overall national unemployment rate of 4.1%.
“The moving average of the number of unfilled jobs for IT professionals peaked in January, and has steadily declined to 45,000 in September,” Janulaitis said. “Most of those positions are for new technologies. IT pros having a legacy application focus are finding few opportunities.”
How to get hired
Of the tech workers open to new opportunities, nearly 80% say they would consider relocation, a 10% increase from 2023. Tech talent is also taking control of their hiring journey, with 61% in 2024 finding roles on their own compared to 55% who did so in 2023. This indicates a shift away from reliance on recruiters and personal networks, according to Indeed.
Linsey Fagan, a senior talent strategy advisor at Indeed, noted that the tech job market is currently seeing decreased job volume and an influx of talent, making it a unique challenge for job seekers to find suitable roles.
But there are a few key steps job seekers can take to improve their chances of success, according to Fagan — beginning with upskilling.
Indeed
“Technologies like Rust, Go, Google Cloud Platform, Terraform, and AWS are experiencing a surge in demand, but have relatively few job seekers compared to open roles,” Fagan said. “Learning these skills can give candidates a significant advantage in securing roles in this dynamic landscape.”
According to Indeed, the fastest-growing areas in tech at the moment are software development, generative AI, and cybersecurity, where despite high demand, there remains a shortage of experts.
Freelance employment platform Upwork found similar trends in a recently released study of freelance worker earnings for all of 2023; it found “unprecedented” growth in importance for genAI and data science and analytics skills.
Indeed
The genAI factor
In the US and Europe, as many as 300 million jobs could be threatened by some form of AI over the next few years, according to a March research note by investment bank Goldman Sachs. Fully two-thirds of US jobs could be partially automated through AI, and up to one in four current work tasks could be completely automated by AI, Goldman Sachs said.
Indeed
In particular, roles that require repetitive data entry, legal administration, careers involving math skills — even healthcare jobs — will all be impacted by AI’s adoption. Amid that backdrop, job seekers should ask a potential employer if they offer upskilling opportunities, as 89% of tech professionals use company-provided training opportunities to keep their skills up to date, according to Fagan.
“…With genAI gaining momentum, tech professionals feel pressure to upskill,” she said. “Most employers offer tuition reimbursement or upskilling opportunities, so it would be a missed opportunity not to take advantage. Additionally, adapting and integrating AI into workflows is becoming essential. By staying open to upskilling, particularly in high-demand areas and in AI integration, and considering flexibility in work location, tech job seekers can better navigate today’s tech job market.”
Tech professionals with five to 10 years of experience are more likely to apply for internal roles rather than outside their current company, underlining the need for companies to invest in upskilling. Sixty-six percent of employees say they are likely to remain at a company with mentorship programs, according to Indeed’s survey.
While work flexibility remains a top priority for many job seekers, it’s important for tech job seekers to be open-minded about hybrid or on-site work if they are looking to find a job quickly. “Our research found that professionals who work on-site about four days per week tend to want to stay with their employers, likely due to the collaboration and sense of community fostered by in-person interactions,” Fagan said.
