As the leader of a company that tracks tech employment trends, I’ve seen firsthand the highs and lows of the industry over the past few decades. It’s literally my job to keep up with tech employment trends, and I can tell you one thing: It’s an interesting time for both workers and policymakers in the tech industry.
However, beware of news headlines that only show one side of the story. The U.S. tech economy is going through some unusual changes — and it’s not always easy to understand them.
Technician salaries are rising.A bit
Perhaps you’ve seen a recent article circulating in the Wall Street Journal that discusses $900,000 AI technology job. This is a great book, but salary trends are not that simple.
When it comes to tech salaries, the devil is in the details. Historically, three technology areas have been severely undersupplied: artificial intelligence (generative AI and machine learning), cybersecurity, and cloud engineering. Due to limited supply, these majors have seen higher salary increases than other technical positions, and have naturally become the focus of today’s tech media coverage.
There’s no doubt these hot spots exist in tech, but we should view any associated salary spikes in these roles as outliers.mine Annual Company Salary Survey The study found that average salaries for technology jobs will increase by about 7% in 2022. This is a huge jump for the industry and evidence of a surge in demand post-pandemic. But outside of certain hot spots, we expect wage pressures to return to normal, which means wages across the tech industry are not as favorable as they may seem.
Salaries are extremely sensitive to supply and demand, and demand for technical positions is down significantly compared to last year.exist CompTIA August Report, while three of the company’s four employment statistics were trending positively, job postings (arguably the most important statistic) were down. The total number of job postings in August was 204,400, the lowest in the past three years and less than one-third of the total number of job postings for the same period in 2022.
While overall unemployment has improved across the tech industry, tech experts have less bargaining power. Wages will rise in certain circumstances, but not universally.
The technology industry is in a league of its own
The U.S. tech economy works differently than other industries. In the first half of 2023, the United States lost nearly 100,000 technology jobs. This has only happened three times in the past two decades: the 2001 dot-com bubble, the 2008 financial crisis and the 2020 COVID-19 pandemic. Tech growth is usually reliable, rightward growth, so it’s shocking that we’ve lost so many tech jobs recently.
These trends show that technology is in decline. US GDP is growing, but some parts of our economy have shrunk significantly, including the tech industry. Regardless of the overall economy, employers are realizing that tech jobs pay well above average salaries. So while companies may still be able to hire after a rocky start (and a rough couple of years) in 2023, people are still wary of hiring tech employees.
The U.S. economy may be showing signs of better days ahead, but the U.S. tech economy has more work to do.
Salary is only part of the story
When we evaluate tech recruiting trends, focusing solely on salary is a bit short-sighted. We must consider other reasons for employees to stay in their current positions.
McKinsey’s latest research Salary and financial factors were found to rank fourth, behind factors such as career development, flexibility and meaningful connections. Work-life balance and culture are now influencing employee decision-making and loyalty. Tech workers want remote and hybrid work options, and they want to continue maintaining their current levels of flexibility.
The technical workspaces of the past no longer exist. We know that the old ways don’t increase productivity and today’s commutes are pointless. The leaders and teams I spoke to across the tech spectrum recognize that there has been a real shift in attitudes toward hybrid and remote work that we are unlikely to reverse.
While employers understand that tech workers expect flexibility, leadership teams are working to determine whether they have the negotiating power to demand working in the office without causing too many waves as we enter 2024. Only time will tell if they do.
No, artificial intelligence won’t come to do tech jobs
Another recent study from McKinsey The impact of artificial intelligence on the different work patterns of software developers working in programming is explored. The top improvement? Documentation. When developers write a line of code, they should document what that line of code does. While documentation is an important step, it’s tedious and not very exciting. As a result, workers make as little or no time to do this as they should, if ever.
AI can support this type of document work, but that is where AI applications end up in many technical roles for now. Beyond simple support tasks, AI is unlikely to change the role of technologists over the next five to 10 years, and it won’t take away jobs or lower average tech wages. Coding is about solving problems, and artificial intelligence is not ready yet.
There is an assumption in some circles that companies will start paying less to their tech workers because they will do less work when AI steps in to support them. but it is not the truth. Instead, technologist salaries are likely to increase as employers ask those who hold these positions to take on more diverse responsibilities.
Technology over the past few decades has proven that as technicians acquire new tools, they use them every day, become proficient, and then establish secondary output levels as the new norm. We expect the same to happen with artificial intelligence.
In an industry that’s moving as fast as technology, it’s important to do your homework. Research, talk to your peers, and don’t take trending headlines at face value. What you see on the surface may only be part of the story.
Art Zeile is dice.
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