We Spent 3 Months Researching the 2024 Tech Job Market

Curious how the evolving tech landscape impacts your career trajectory? We've been on a mission to decode the future of tech jobs, spending the last 3 months laser-focused on:

• Market & Money Moves: We analyzed historical trends, dissected current compensation data, and explored the ever-shifting tech job market.

• Industry Insider Insights: We tapped into the minds of senior tech leaders, gleaning their expert perspectives.

• Real-World Candidate Chronicles: We walked alongside real job seekers, understanding their experiences in the trenches.

This post will dissect hiring trends, layoff realities, and compensation shifts, empowering you to craft a clear action plan for your career or job search by the end. Lets begin.

The tech industry thrives on future potential, reflected in stock valuations. But when interest rates rise, that future growth becomes less valuable. This is exactly what happened in early 2022.

Funding Freeze: With skyrocketing interest rates, borrowing money became expensive. This meant tech companies had to tighten their belts, leading to a slowdown in hiring and, in some cases, layoffs.

Domino Effect: The tech world watched in shock as Elon Musk's Twitter acquisition led to massive staff reductions. Soon after, Meta, the first of the FAANG giants (Facebook, Amazon, Apple, Netflix, Google) toppled like a domino, initiating a wave of layoffs across the industry, even reaching Google's doorstep.

The tech titans may seem invincible, but the truth is, they're facing a period of uncertainty. While another major growth spurt is certainly possible, there's also a chance they could morph into slow-growth giants, mirroring past industry cycles.

What does this mean for you as a tech worker? Be ready for both scenarios. Tech companies often go on hiring sprees when they discover new goldmines or feel threatened by emerging trends, even if it means layoffs in less profitable areas.

The Key to Survival? Strategic Positioning: Equip yourself with the skills most in demand and align yourself with the high-growth sectors of the industry. This won't guarantee you'll be immune to layoffs, but it will significantly increase your chances of a smooth recovery if impacted.

The past two years have witnessed a significant shift in the tech job market, leaving many wondering: what exactly has changed? The key developments that unfolded between 2022 and 2024.

A Cooling Climate: Early 2022 saw a turning point with rising interest rates, making access to capital more expensive for tech companies. This triggered a slowdown in hiring sprees, and in some cases, workforce reductions. Even the FAANG giants (Facebook, Amazon, Apple, Netflix, Google) felt the pinch – Meta's layoffs sparked a domino effect, culminating in significant staff cuts at Twitter under Elon Musk's leadership.

Startups Feeling the Squeeze: The once-booming startup scene wasn't immune either. In 2023, Carta, a leading startup equity platform, reported the first decline in startup employment in over five years, indicating a more cautious approach within the sector.

The tech industry, once known for its constant churn, is experiencing a period of flux. While overall employment levels haven't plummeted, the dynamics have undoubtedly shifted (2022-2024).

A Culture of Caution: Witnessing colleagues hired in 2022 leave within a year (a staggering 43% increase from the previous year) has instilled a sense of unease in the workforce. This fear of instability may make tech professionals hesitant to pursue new opportunities, even if they're dissatisfied in their current roles.

Extra Caution for New Entrants: The data paints a concerning picture for entry-level roles, with a 25% higher likelihood of layoffs. This underscores the importance of being indispensable, especially for those just starting their tech careers.

Prioritizing the Core: Engineering Takes Center Stage Our analysis reveals a crucial trend: during recent downsizing, non-engineering startup roles were the first to be cut. This prioritization makes perfect sense – engineering talent is the backbone of product development and maintenance, especially in cutting-edge "deep tech" sectors.

Fast forward to January 2024, and we saw another round of mass layoffs - about 60% lower than January 2023, but still significant.

Strategic Downsizing, Strategic Growth? In late 2023, our conversations with tech executives revealed a surprising trend: layoffs implemented to appease financial departments, potentially paving the way for future hiring sprees. This strategy seems to be holding true, with data showing a significant increase in open tech positions since the start of the year. While this falls short of the 2022 peak (down 55%), it's approaching pre-pandemic levels (nearing 2019 figures).

Shift #1: Leaders on the Frontlines: A Rise in Individual Contributors

One surprising trend is the surge in individual contributor (IC) hires. Compared to 2019, tech companies are filling 30% more new positions with ICs, suggesting a potential flattening of traditional management structures. However, it's important to note that startups still heavily favor leadership roles, with a staggering 40% of new hires being managers or above.

Shift #2: A Compensation Reset

After a period of significant growth leading up to 2022, overall tech compensation has seen a downward adjustment. While base salaries haven't taken a major hit (dipping only a couple of percent on average), the picture is bleaker for entry-level roles, which experienced a concerning decrease of up to 25% last year.

While data from Levels.fyi indicates a downtrend in total compensation and offer numbers for in-demand roles like Amazon SDE II engineers, a glimmer of hope emerges. Since Q4 2023, there's been a return of top-tier offers exceeding $350,000 for this position.

Shift #3: Specialization Reigns Supreme

While software-heavy industries like edtech and gaming experienced significant hiring slowdowns, the story is different for AI and deep tech sectors. These specialized fields maintained a more steady hiring pace. This highlights the growing importance of specialization in the tech job market.

Based on the LinkedIn Workforce Confidence Index survey, the industries poised to see the most employee turnover in 2024 are:

Retail: Leading the pack at 54% of employees reporting they plan to look for a new job.

Technology, Information & Media: 47% of employees are planning a job search, possibly due to lower than average pay raises (55% received a raise in 2023 compared to the US average of 59%).

Possible reasons for employee turnover:

Low pay raises: In industries like Tech, Information & Media, where raises haven't kept pace with the national average, employees might be seeking opportunities for better compensation elsewhere.

Desire for new opportunities: A significant portion of the workforce might simply be looking for new challenges and growth opportunities outside their current roles.

What can employers do to retain employees?

• Competitive compensation: Offering competitive salaries and benefits packages is crucial to retain top talent.

• Growth opportunities: Providing clear paths for career advancement and skill development can incentivize employees to stay.

• Positive work environment: Fostering a positive work culture that values employee well-being and work-life balance can significantly improve retention rates.

Popular Roles in the Booming US IT Job Market (2024)

The US IT job market is a powerhouse, offering a plethora of exciting and well-paying career paths. Here's a breakdown of some of the most sought-after roles, based on industry trends:

High Demand, High Reward:

• Software Developers & Engineers: The backbone of the tech industry, responsible for designing, building, and testing software applications. (High Employment, High Wages)

• Cloud Architects & Engineers: Experts in designing, developing, and managing cloud-based infrastructure and solutions. (High Demand, High Wages)

• Data Scientists & Analysts: Masters of data analysis, responsible for extracting insights and knowledge from vast datasets. (High Demand, High Wages)

• Cybersecurity Analysts & Specialists: Defenders of the digital world, protecting systems and data from cyber threats. (High Demand, High Wages)

• Network Architects & Administrators: The architects and engineers keeping computer networks running smoothly and securely. (High Employment, Good Wages)

Other Important Roles:

• IT Project Managers: Orchestrators of IT projects, ensuring they are delivered on time, within budget, and meet project goals. (Good Employment, Good Wages)

• Database Administrators: Guardians of data, responsible for managing and maintaining databases. (Good Employment, Good Wages)

• Systems Administrators: The IT troubleshooters, keeping computer systems operational and resolving technical issues. (Good Employment, Good Wages)

• Help Desk Analysts: The frontline of IT support, assisting users with technical problems. (Good Employment, Moderate Wages)

Top States for IT Jobs in the US (2024): A Niche Approach

The US IT job market is a vast and vibrant landscape. While states like Texas, California, and Illinois boast a significant share (32%) of the national IT workforce, a niche approach is key for successful recruitment. Here's why location is crucial:

• Talent Pool: Certain states may have a higher concentration of IT professionals with specialized skills relevant to your niche.

• Cost of Living: Compensation packages need to be adjusted based on the cost of living in a particular state.

• Industry Hubs: Specific states may be hubs for certain technology sectors, attracting talent with relevant experience.

Rising Stars in the US IT Job Market (2024)

The US IT job market is constantly evolving, with new trends shaping the landscape. Based on the information provided, here are two key trends to watch:

Trend #1: Cloud Computing Takes Center Stage

• Surge in Cloud Adoption: Businesses are increasingly relying on cloud-based solutions for storage, application hosting, security, and various other functionalities. This trend is fueled by the internet's growing capabilities and the cost-effectiveness of cloud services.

• Cloud Specialists in High Demand: As cloud adoption grows, the need for cloud architects, engineers, and specialists to design, develop, and manage these solutions rises.

Actionable Insights:

• If you're an IT professional, consider upskilling in cloud computing to stay relevant and competitive.

• For companies, assess your cloud adoption strategy and identify areas where cloud specialists can add value.

Trend #2: The Cybersecurity Imperative

• Evolving Threats: As businesses become more reliant on the internet, the risk of cyberattacks escalates. This necessitates robust cybersecurity measures to protect data and systems.

• Increased Demand for Outsourced Security: Managing in-house cybersecurity teams can be expensive. Many organizations are turning to outsourced cybersecurity services for cost-effective solutions.

Actionable Insights:

• If you're an IT professional, consider specializing in cybersecurity to meet the growing demand.

• Organizations should evaluate their cybersecurity posture and explore the potential benefits of outsourced security services.

In-Demand Roles for 2024

The US IT job market thrives on innovation, and with trends like cloud integration, AI, and automation taking center stage, the talent needs are shifting. Here's a breakdown of some of the most sought-after roles in 2024:

• Software Developers: Leading the Charge (25% Growth Projected by 2033): Software developers are the backbone of the tech industry, responsible for designing, building, and testing software applications. The US Bureau of Labor Statistics (BLS) reports nearly 1.8 million employed in 2022, with New York, California, and Washington leading in job concentration. With a projected 25% growth by 2033, the demand for skilled developers is only going to rise.

• Database Specialists: A Foundation for Growth (8% Growth Projected by 2033): Database administrators and architects play a critical role in managing and maintaining the vast amount of data organizations generate. Washington holds the top spot for employment according to the BLS (with nearly 6,000 employees in 2022), and the overall US picture reflects an 8% projected growth by 2033. As the data landscape continues to evolve, database specialists will remain highly sought-after.

• Computer Scientists: Innovators for the Future (23% Growth Projected by 2033): If you're a problem-solver who thrives in a fast-paced, tech-driven environment, computer science might be the perfect fit. The BLS reports over 36,500 computer scientists employed in the US in 2022, with cities like Washington, San Francisco, and San Jose boasting high concentrations. With a projected growth of 23% by 2033, computer scientists will be instrumental in shaping the future of technology.

High Demand Across Unexpected Industries (2024)

The landscape for AI talent is shifting! While you might expect tech giants to dominate the AI hiring scene, a surprising trend is emerging. Here's a key takeaway for IT recruiters:

• Non-Tech Industries Lead the Charge: According to LinkedIn's Talent Insights (as of Nov 2023), non-traditional sectors like non-profit organizations (48%), law (40%), online media (38%), retail (38%), and renewable energy (37%) are experiencing the fastest-growing demand for AI talent.

Why the Shift?

These industries are increasingly recognizing the potential of AI to:

• Boost Efficiency: Automate tasks, streamline processes, and optimize operations.

• Gain New Insights: Analyze data to uncover valuable customer and market trends.

• Enhance Decision-Making: Leverage AI-powered analytics for data-driven decision support.

In-Demand AI Jobs (2024):

Here are some of the most sought-after AI jobs across industries, along with their average salaries (according to Glassdoor):

• Machine Learning Engineer: $125,000 - $201,000 per year

• Robotics Scientist: $116,000 - $188,000 per year

• AI Quality Assurance Manager: $95,000 - $151,000 per year

• AI Ethics Officer: $95,000 - $166,000 per year

So here are 5 lessons all tech employees should learn through all of this:

#1: Embrace the Long Game: Resilience is Key

The tech industry has a history of dramatic cycles. Remember Ethan, who bounced back from a layoff to become a VP at Amazon? This story exemplifies the industry's resilience. Even with AI disrupting the scene, adaptability and a willingness to learn will unlock future opportunities.

Make Smart Career Choices: Focus on companies that offer long-term value, fostering skill development and experiences that benefit your entire career, even if the specific role or business experiences a downturn.

#2: Be AI-Ready, Not Just AI-Focused

AI's influence will permeate most tech roles. Instead of solely chasing AI-specific jobs, cultivate the skills and mindset to collaborate effectively with AI when it integrates with your domain.

A Simple Rule of Thumb: Stay close to either deep tech or the revenue stream.

Technical Professionals:

• Deepen your knowledge in AI and other deep tech areas.

• Develop the ability to communicate effectively with product and business teams.

#3: Hustle Smart in Your Job Search

The market remains competitive, with open positions significantly reduced (down 66%) and startup hiring halved in 2023. Stand out by being proactive.

• Apply strategically: Increase your application volume, tailor your resumes for each position, and leverage your network for referrals.

• Invest in preparation: Put in the extra effort to ensure your application materials are polished and highlight your unique value proposition.

#4: Don't Be Blinded by Startup Sizzle

The recent downturn saw many startup employees lose out on equity value. Only 7% of later-stage startups offer significant equity payouts to employees. Be cautious about inflated equity offers and factor in the possibility of future funding rounds impacting valuation.

#5: Beyond the Hype: Choose Wisely

Jumping ship to a startup might seem tempting, but remember, equity can be volatile, and recent layoffs indicate startups are no safer than established tech companies. Assess potential employers holistically, considering growth opportunities, learning potential, and culture fit, not just hype or prestige.

The Future of Jobs: A Balanced View

AI is poised to augment tech workers' productivity, as evidenced by internal AI coding and automation tools being developed by companies like Meta and Google. Recent layoffs weren't primarily driven by AI, but rather its impact will be felt in long-term hiring growth.

AI's Double-Edged Sword:

• Growth Accelerator: AI will propel the tech industry's economic and societal impact, generating more jobs and industry expansion.

• Efficiency Enhancer: AI will also streamline operations, potentially reducing workforce needs to maintain current output levels.

The net effect will likely be substantial tech industry growth. While some roles (customer support, analytical, QA, and basic coding) may be automated, new roles will emerge to bridge the gap between human and AI capabilities.

Stay adaptable! Your career success is measured in decades, not years.

Ready for more job search tips in this dynamic market? Stay tuned in the Clarusway newsletter!

Join outstanding companies with rewarding salaries. We offer the highest-demand IT skills YOU need for success!