Layoffs and salary plateaus in the wake of exuberant pandemic-era IT hiring has the IT talent market in flux. And while employers pay premiums for hard-to-find AI skills, IT pros seek the same for filling in-office openings.
IT is an ever-changing industry, a truism that 2023 underscored, thanks in large part to the meteoric rise of generative AI. The industry saw unprecedented growth in certain areas — such as AI and ML — alongside massive layoffs from tech vendors and cooling (or even contracting) salaries for a wide range of IT roles.
And in the adjustment to a post-pandemic workforce, employees and employers have found a new battleground, with IT pros continuing to seek remote and flexible work opportunities, while companies grapple with the cost of following through with return-to-office mandates.
Following is a look at some of the biggest trends in the IT talent market, from hiring practices to salary outlooks to emerging skills — and how they are impacting IT leaders’ talent strategies and IT pros’ career aspirations.
Hiring remains strong despite layoffs
After years of consistent job growth, IT has taken a hit of late, with massive layoffs across the industry, including at major companies such as Amazon, Meta, and Google.
“We sometimes call it the ‘tale of two cities,’ where you still have unemployment rates that are historically low, you have certain skill sets that have negative unemployment, meaning more jobs than candidates, but then you have some layoffs. So it’s just this really complicated complex job market,” says hiring and consulting expert Ryan Sutton, executive director of the technology practice at Robert Half Technology.
An unprecedented spike in tech hiring between 2019 and 2021 further complicates today’s market, as many tech companies “flush with cash” hired “beyond their needs solely to keep them from being hired by rivals,” according to the 2024 Dice Tech Salary Report. Recent layoffs have been cast in part as a corrective for that period, when the average tech salary increased nearly 9%.
“What we’re seeing today is a prioritization towards technology roles that add value, so companies are just more aligned today with their initiatives that will truly add the value,” says Sutton.
Still, data shows there are more IT job openings than job seekers today, making for a candidate-friendly market. In fact, 93% of managers say it’s difficult to find the skilled professionals they need, according to the Robert Half 2024 Salary Guide.
Moreover, 79% of CIOs plan on increasing headcounts in the coming year by as much as 5%, says Jose Ramirez, director analyst at Gartner. This is especially true for industries such as financial services, higher education, manufacturing, and the public sector, he adds.
But even as IT hiring remains relatively steady, it is not keeping pace with rising workloads for IT workers at many companies. Robert Half’s survey found that 48% of tech workers have experienced increased feelings of burnout caused by heavy workloads (57%), lack of support from management (32%), and not enough resources to perform duties adequately (31%).
The fallout of this may be a spike in turnover to come. According to a survey from Dice, 29% of IT pros are looking for a new job, and 60% said they will likely change employers within the next year, especially workers aged 25 to 35.
Tech salaries slow, but remain competitive
IT salaries have cooled since the pandemic boom, with the average salary dipping to $111,193 last year from $111,348 in 2022, according to Dice. Stagnation was especially noticeable for IT pros with five or fewer years of experience and those working in the biggest tech hubs, including Silicon Valley, Seattle, and Boston, according to its report.
For companies looking to hire new talent, salary transparency can help attract candidates. Research from Robert Half shows that 42% of workers say they expect to see a salary range in job listings and 57% said they would remove themselves from consideration if a potential employer doesn’t provide a salary range upon request.
Moreover, over half of the respondents to Dice’s survey said that pay equity was either “very” or “extremely” important to them, and that they would want their company to conduct a pay equity analysis. However, nearly two-thirds of respondents said their company has not communicated a pay equity analysis to them, despite 80% of HR professional reporting that their company had in fact conducted that analysis — a disconnect that could lead to additional turnover.
In terms of salary satisfaction, 43% of workers early in their careers reported the most dissatisfaction, while only 31% of those with 15 years of experience or more reported the same, according to Dice. Overall salary satisfaction has dropped since 2022, with 15% of IT pros saying they were very satisfied with their salary last year, down from 20% the year prior. That may in part be due to slowing salary increases, with 55% of IT pros reporting a salary increase in 2023, down from 66% in 2022. As a result, 54% of tech professionals view themselves as underpaid, up from 49% the prior year.
Also of note: Second to merit-based raises (41%), the most popular reason for a salary increase last year was changing employers (15%), according to Dice respondents.
Skills development wanted
To advance their careers, today’s tech pros want to work in “progressive environments,” says Robert Half’s Sutton, noting that workers are “very aware and cognizant of what skills they need to progress,” and want to work in environments that support that skills progression.
“[Tech] employees want to be in that progressive technology environment, because they’re just naturally inquisitive — so they’re looking for companies that can help them gain exposure to emerging skills and emerging trends,” he says.
Skills currently fueling increased pay include cybersecurity (55%), cloud (51%), AI and ML (46%), software development (44%), and data science and database management (33%), according to data from Robert Half.
Gartner’s Ramirez says that 69% of CIOs are looking to upskill and reskill current employees, compared to 47% last year, to help address gaps and prepare the enterprise for the future. Nearly half (45%) of CIOs also report they will also “use AI to automate tasks or augment people resources” to help close those skills gaps, Ramirez says.
In terms of emerging skillsets, companies are increasingly open to candidates with less experience. With technologies such as AI and ML, finding candidates with several years of experience is challenging. Instead, CIOs are looking to identify current employees or new candidates who have foundational knowledge and are willing to learn.
“There are just not enough people with AI experience to be able to go out and put that as a job description ‘must have.’ A minimum of three years progressive AI experience? That skill set doesn’t exist. So, if you’re trying to evolve your AI strategy, if you’re trying to beef up your data science initiatives, you’re going to have to pick candidates and employees that have the right core skill set but can be developed,” says Sutton.
Remote work in the crosshairs
Since the pandemic, remote work and flexible work schedules have become increasingly desired perks, with 63% and 77% of IT pros seeking such arrangements respectively, according to Robert Half.
That is not to say that in-office work is necessarily a deal-breaker; it’s just that 80% of IT workers would be willing to go into an office full-time if offered a salary premium, Robert Half’s data reveals.
On the hiring side, 43% of hiring managers said they offer remote or hybrid work models to attract top performers, while return-to-office hard-liners are losing out: Half of managers who do not offer remote work report losing out on a preferred candidate, while 42% say they have lost a tenured employee for the same reason. Additionally, 46% of hiring managers say they have struggled to meet the salary expectations of candidates willing to work on site.
But for candidates willing to come to the office, this can be a “little silver lining,” Robert Half’s Sutton says. “Candidates really can separate themselves and get more opportunity,” thanks to less competition from other candidates, he adds.
Additional sought-after benefits include health insurance (82%), paid time off (73%), a retirement savings plan (55%), dental insurance (26%), company-paid meals and snacks (21%), paid parental leave (20%), and paid time off for volunteering (19%), according to Robert Half.
Dice reports that IT workers also seek stock programs (29%), training and education (24%), gym or fitness reimbursement (21%), and college tuition reimbursement (18%), among other perks.
AI changes the equation
Generative AI, and AI in general, has been the most talked about technology in the past year, with questions arising as to how it will impact the workforce. Sutton points to increasing use of AI to alleviate some of the administrative burden of work and predicts more companies will employ AI to analyze data and to drive more business decisions.
But while no one knows for sure the extent that AI will be able to replace human jobs, in the interim, the rise of AI is having significant impact on hiring practices and salaries. According to data from Dice, 14% of all tech postings in February 2024 referenced AI- or ML-related skill sets, up from 9% in January 2023. The professional, scientific, and technical services industries have posted the largest share of AI-related job openings, with consulting firms ramping up AI hiring, as well as manufacturing, healthcare, and retail.
While some businesses have gone forward with full adoption of AI, others have struggled to figure out how AI fits into their overall strategy. The key for IT leaders is understanding how to support AI initiatives with the right teams and resources. CIOs should also be considering what skills and responsibilities AI will supplement or replace, as well as the new skills employees will need to use AI in the workplace. An inevitable shift awaits organizations implementing AI, and it’s important for CIOs to look ahead at how they’re going to “redesign rather than replace” certain roles, says Ramirez.
Ramirez also notes that an oft overlooked aspect of AI is its potential impact at the management level. Managers will also need to embrace AI as more tools and services emerge to help manage teams, especially those working with AI.
“It’s not just individual contributors, managers should develop AI skills as well, and start to think about — and even anticipate — the IT management augmentation with AI. Future IT managers are going to lead people with the help of AI,” says Ramirez.
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