State of IT jobs: Mixed signals, changes ahead

When it comes to jobs and hiring, the IT industry today is in a state of flux, with 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.

The pandemic put organization’s digital transformation to the test, forcing many companies to modernize and adapt overnight to a global shift in remote work and an increasing emphasis on digital services and capabilities — a shift that pushed many organizations to escalate IT hiring plans.  

But in the adjustment to a post-pandemic workforce, employers have found themselves amid an AI skills gap that is once again pushing them to rethink how they can meet skills needs and develop talent — especially as an IT talent market mismatch arises.

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’ aspirations.  

The AI impact

AI has experienced a meteoric rise in the enterprise since generative AI burst onto the scene in late 2022. With AI pilots and proofs of concepts being launched across nearly every industry, companies are scrambling to get the necessary AI and ML skills to support their current and future AI strategies with hopes of not being left behind. 

“Our data shows that proficiency in AI and data remains the most highly sought out skill by tech and IT teams, in roles ranging from customer chatbots to predictive maintenance systems. As technology advances and businesses evolve, we’re also seeing a few emerging roles, including AI ethicists, AI product managers, and machine learning engineers,” says Ryan Sutton, executive director of the technology practice at Robert Half Technology.

And demand for AI skills is only increasing. Indeed’s Hiring Lab found that 22% of software development jobs on offer in February 2024 were AI-related, up from 19% in June 2023. And while AI-related jobs might still be a small segment of the market, they’re rising rapidly. In January of 2023, three in 100,000 job listings were for AI-related jobs; by February 2024 that number rose to 11 in 10,000 job listings — more than a 30-fold increase.

The rise of generative AI has also increased pressure on IT pros to upskill, with 44% saying they feel “high or very high pressure” to do so, while 35% say they feel “moderate pressure” to train up on AI, according to data from Indeed. In fact, according to a survey from Pluralsight, 74% of IT pros see AI making their skills obsolete.

Pressure to train up on AI, in turn, has job seekers looking for organizations that invest in upskilling, training, and professional development assistance. Nearly three in four IT pros who see AI as their greatest skill deficiency are confident they can learn the tech if given the chance, but for many, training just isn’t there at their current employer. As a result, organizations that can offer that opportunity will not only attract more tech talent; they’ll also be in the position to develop the skills they need internally to tackle AI projects.

“We’ve seen positive outcomes from organizations that hire both AI-ready candidates, in addition to high-potential professionals who may not have all the required skills but are able to learn quickly with provided training and upskilling opportunities,” says Sutton.

Relaxing job requirements to meet demand

The fast rise of AI — and subsequent skills gap — has also pushed IT organizations to ease off some of their requirements for job candidates. With such technologies being so new, finding candidates who have several years of experience, let alone any AI experience, is proving challenging.

To bridge the talent gap, companies are re-evaluating their hiring strategies, identifying areas where they can relax requirements and expectations, and ultimately open the door for more candidates who are willing, and often eager, to receive training in emerging skill sets. But for organizations to succeed, they must commit to investing in high-quality internal training and upskilling programs.

“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.

Investing in upskilling and training programs for employees not only helps organizations develop the skills they need, it can also improve retention and attract new talent to the organization.

“More than half of IT managers plan on implementing more employee upskilling opportunities to help bridge skills gaps. By offering targeted training, not only do you help build the right skills for the job, but you also strengthen relationships and trust with new hires and existing employees,” says Sutton.

Today’s tech pros want to work in “progressive environments,” says 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.

Companies are also showing signs of shifting away from degree requirements in favor of IT certifications, and many are embracing a shift to skills-based, or skills-first, hiring practices to shore up talent gaps.

Paying salary premiums for in-demand skills

While salaries have leveled out after a pandemic-era boom, certain skills can help tech candidates in salary negotiations. According to data from Robert Half, 45% of technology managers say they plan to increase starting salaries to attract talent — however, Sutton notes that “larger pay hikes are expected to be saved for the most highly skilled candidates who can best help with business needs.”

Of those surveyed, 44% said they would offer a higher salary for someone with AI and machine learning skills. Additionally, 37% of managers said they are willing to pay more for those with skills in cybersecurity, 37% said they would increase salary for cloud computing security and architecture skills, and 29% for software and applications development skills.

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.

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. According to data from Indeed, jobs that list compensation see 31% more apply rates, and competitive salaries are the most important driving factor for getting tech candidates to respond to recruiters, according to Indeed.

Beyond salaries, candidates are motivated by remote (38%) and hybrid (55%) work, with 31% saying they’re looking for in-person work — up 5% from 2023, and 13% saying they’re open to any working structure.

Even if your organization doesn’t offer fully remote work, it’s important to highlight any hybrid offerings, or flexibility around in-person work if you’re trying to draw in highly skilled talent. For employees who are interested in going in-person, they still want to know there’s general flexibility around their schedule, since remote work is still an option in today’s workforce.

And while the data shows tech candidates want remote and hybrid work, 78% of technology hiring managers say they are willing to pay higher salary premiums to candidates willing to go into the office full- or part-time. As organizations push return-to-office policies, candidates who are interested in going back into the office may have a leg up in salary negotiations.

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 Robert Half’s Sutton.

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.

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.

More on IT hiring:

• 4 hot hiring trends — and 4 going cold
• 24 mistakes that make hiring IT talent harder
• 10 most difficult-to-fill IT roles — and how to address the gap

This article was originally published on May 17, 2024, and has been updated to reflect recent trends.