and Tesla. Hiring freezes at Meta and Twitter. Rescinded job offers at Coinbase. If you’re a tech worker, you aren’t the only one freaking out about your job prospects right now. Is this the end of the boom for coders? Are we headed for a repeat of the dot-com bust?
To get a read on where things stand in tech, and how worried everyone should be, I took a look at the data and spoke with a bunch of tech recruiters. To my surprise, I came away bearing good news: The job market in tech is still going strong.
Some of the recruiters I talked to don’t see even the smallest hint of a slowdown. Others say the industry’s recent hiring frenzy has started to cool off — but only a little. And even those slightly more pessimistic experts agree tech workers have no reason to panic.
“It’s still a really, really healthy job market,” Chris Bakke, the CEO of the tech recruiting platform Laskie, told me. “It’s still very competitive. It’s still very aggressive in terms of what companies are willing to do for the right candidates.”
To understand where the job market in the tech industry stands today, let’s start with just how fierce the war for talent has been over the past year. For all the talk of the labor shortage in restaurants and hotels during the Great Resignation, it’s really tech workers who have been in the scarcest supply. Last quarter, the unemployment rate for all workers stood at 3.9%. For software developers, unemployment was only 0.6%; for database administrators and architects, 0.5%; and for network and computer systems administrators, a basically nonexistent 0.1%.
And no wonder — as the coronavirus pandemic fueled a rapid shift to e-commerce and remote work, everybody needed tech professionals with the skills to make that shift possible. Since February 2020, the number of job postings for software developers on Indeed has soared by 120%. Among the 51 occupational categories that Indeed tracks, only real-estate jobs have seen a bigger increase, and by only a tiny amount.
That surge in demand has given tech workers the leverage to command outsize salaries, signing bonuses, remote-work privileges, and all kinds of perks and benefits that would have been unthinkable before the pandemic. “In 23 years, I have never experienced a market like the one we’ve been in in the last six to nine months,” Megan Slabinski, who oversees tech recruiting in the Pacific Northwest and Northern California for Robert Half, told me. “Candidates are absolutely in the driver’s seat.”
Of all the recruiters I spoke with, Slabinski is the most optimistic about the state of tech jobs. She’s heard all the news about layoffs and hiring freezes over the past few weeks, but she’s seen no sign of it in her recruiting work at Robert Half. “We have not seen any fluctuation in demand for IT hiring,” she says. “There’s so many open positions and so few talented candidates.”
Indeed’s data backs up her view. Openings for software developers leveled off at the beginning of the year — but they’re not declining, even as announcements of hiring freezes have come to dominate the headlines over the past few weeks. “There’s still plenty of demand for software-development workers,” AnnElizabeth Konkel, an economist at Indeed, told me. “Looking at the data, it doesn’t look like there’s a fire in the tech space.”
Stock Market ‘Companies are continuing to hire’
Of course, software developers aren’t the only people who work at tech companies. Everyone from venture-backed startups to publicly traded tech giants also needs product managers, marketers, accountants, sales representatives, and human-resources professionals. And that’s where many of the layoffs seem to be happening. Goldman Sachs, which looked at data from the website Layoffs.fyi, recently concluded that the current round of tech layoffs was largely concentrated in support roles, not engineering.
To be sure, more than 25,000 people have lost their jobs in the tech industry this quarter — the most since the early months of the pandemic. And the pool of Silicon Valley mainstays announcing hiring slowdowns seems to grow by the day. But the hiring freezes aren’t as widespread as the news might lead you to believe. The recruiting platform Laskie matches job seekers to a broad array of roles in tech. If Indeed’s data on software developers tracks the job market for the occupation most associated with tech, Laskie’s data is a good proxy for jobs for the entire industry. About a third of the employers on Laskie have recently paused hiring, either in specific roles or across the board — resulting in a 20% decline in job openings since April. Coupled with the increase in laid-off workers, that’s led to a 25% jump in the number of candidates applying for each job on the platform. “The candidate experience is getting noticeably harder,” says Bakke, the CEO of Laskie. Hiring, he adds, is “less crazy, less chaotic than before.”
Those sound like big numbers. But even with the slowdown, Bakke said, there’s no reason for tech workers to be nervous. If a third of employers have paused or slowed hiring, another two-thirds are still looking to fill roles at a frenzied clip. The market has been so good, in fact, that even if things are slightly slower than they were a few months ago, it’s still favorable to job seekers. Think of it as going from unbelievably once-in-a-generation amazing to just plain old great.
“If you look at the total number of job openings relative to the number of qualified individuals for those positions, there’s still a massive imbalance,” Bakke told me. “You’re not applying into a 2001 or 2009 environment where there are just no jobs available. There’s still a ton of great jobs with lots of great companies — and companies are continuing to hire through this.”
Another tech recruiter told me candidates were still getting job offers — just fewer than they were before. “In the first half of this year, we’d see people with five job offers,” Gregg Salkovitch, the founder of Right Choice Resources, which places sales representatives into tech companies, told me. “Now things are coming back to reality, where maybe they only have one or two job offers.” What’s more, he said, salaries are still good: “Companies are still paying high salaries. But it’s less of a bidding war. They don’t have to outbid five companies now. They might only have to outbid one or two.”
And as some tech companies hit pause, others are seizing the moment to go on a major hiring spree. On Laskie, a handful of smaller employers have actually accelerated their hiring plans. “This is the window of opportunity that a lot of companies have been waiting for,” Bakke told me. “They can get the top engineers or marketers or salespeople who would otherwise go to the
companies or the really hot decacorns.”
Some employers outside the tech sector — those without the cash or
of a Facebook, Uber, or Coinbase — are also looking to take advantage of the slowdown to hire the engineers they desperately need. Just last week, Citigroup announced it was hiring 4,000 tech workers to modernize its technology. “We’re trying to digitalize as much of our client experience as possible,” the bank’s head of markets and enterprise risk technology told Bloomberg. “We’ve always seen the tech market to be competitive. But particularly at the moment, coming out of the pandemic, we’ve seen a digital explosion across industries.”
So what does all this mean if you’re a tech worker trying to decide whether to join the Great Resignation? To be on the safe side, Bakke suggests you hold on to your current job until you have another one lined up. He also advises candidates to start a new job right away, rather than taking time off between jobs, to avoid the risk of the offer being rescinded.
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Most important of all, he says, job seekers should ask prospective employers plenty of questions about their financial health. “How much runway do you have? What does your burn look like? What was your last round raised at? Who are your investors? A lot of these things get overlooked in an environment where every company is the next unicorn,” he says. If the hiring manager struggles to answer, he adds, that should be a red flag: “Then you might want to stay in your current job a little longer or continue to search.”
Staying a little longer isn’t an option, unfortunately, for those who lost their jobs at companies like PayPal, Robinhood, or Bolt in recent weeks. So what are those workers to do? The overwhelming advice I heard from every expert I spoke with was: Don’t worry. The job market in tech is still so good that most people who are laid off should not only be able to find a new job but maybe even end up with a raise.
“Find a company or an industry that excites you,” says Slabinski, the Robert Half executive. “And chances are, you’re going to experience a compensation increase as a result.”
Aki Ito is a senior correspondent at Insider.
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