Introduction
Throughout 2024, tech professionals have witnessed a turbulent market, with recurring tech layoffs in the headlines and decreasing roles in the overall job market. However, the reality of the situation is more nuanced. Colin Lernel, the data guru responsible for the Top Tech newsletter, did a deep dive into what is happening in the tech industry in April. In his analysis he asserts the following:
- This is not the worst job market the tech industry has seen.
- Tech professionals are thinking twice about changing roles in the current economy.
- We may be seeing the beginning of a recovery.
Time will tell, of course, but there is reason to see some positive movement in the tech sector. Not least because 80% of our survey respondents, the insiders currently facing the industry head on, express a positive outlook for the tech sector in the next 5 years. Positive long-term sentiments aside, however, this year has not been comfortable for tech professionals.
This year’s survey reveals a dual narrative: while tech professionals grapple with the reality of layoffs and job insecurity, their confidence in the long-term growth of the industry remains strong. On the other hand, HR professionals are cautiously optimistic, predicting a rebound in tech hiring despite current challenges. These findings underscore the delicate balance required in recruiting and retaining top tech talent in today’s volatile market. As we uncover the specifics of these insights, we’ll explore how HR leaders can navigate this landscape to source and hire the best in tech.
80% of tech professionals think the tech profession will grow in the next 5 years.
After Another Tough Year, Tech Professionals' Morale Has Taken a Hit
Both the current economic landscape and the shifting state of the tech job market have doubtlessly impacted the morale of tech professionals. Layoffs have been particularly severe this year, at least according to the headlines. Consistent with this, our survey results showed a marked increase in the number of tech professionals reporting job losses (16%) compared to last year (10%).
Those most affected by job loss this year were tech professionals who worked for a tech company (19%), compared to 11% of tech workers in other industries. Among those affected, an overwhelming 82% began searching for new employment immediately after being laid off. This urgency underscores the heightened uncertainty and anxiety within the tech workforce.
Additionally, a closer examination reveals a notable decrease in the proportion of full-time employees within the tech sector. In last year’s survey, nearly half (48%) of our respondents were employed full-time. This year that figure has dropped to 38%, pointing to a troubling trend of reduced job stability.
The proportion of our respondents who are unemployed but actively seeking work has risen sharply, from 34% in 2023 to 40% in 2024. Unemployed tech professionals may have more time to respond to a survey and their responses come from a different outlook than the group of employed tech professionals might hold. To minimize response bias like this, we exclude the responses of unemployed tech professionals from the primary analysis in this report. However we found the growing share of unemployed respondents compared to last year interesting; these increasing numbers highlight the challenge many tech professionals face in the 2024 tech job market.
60% more tech professionals lost their jobs in 2024 compared to 2023.
18% more unemployed tech professionals are actively job searching in 2024 compared to 2023.
Which of the following describes your employment and/or education status?
Which of the following describes your employment and/or education status?
Mixed Sentiments on the Future of Tech Growth
Despite the turbulence faced in 2024, 31% of tech professionals remain cautiously optimistic about the economic conditions over the next year, unchanged year-over-year. However, it is also notable that an almost equal percentage of tech professionals harbor pessimistic views, indicating a split in economic sentiment across the industry. Younger tech professionals, those aged 18 to 34, are the least likely to hold an optimistic view of the economy, at only 20%.
According to our open-ended responses, optimists among tech professionals attribute their positive outlook to a strong belief in technological progress, confidence in their personal capabilities, and the presence of favorable economic indicators. In an election year, it is not surprising to see that this optimism is often tempered by an awareness of potential challenges, including economic and political shifts that could influence what the next year brings.
On the other hand, pessimists express concerns centered on economic policy, job market volatility, inflation, and political instability. A prevailing sense of dissatisfaction with the current economic climate and uncertainty about the future drives this perspective.
Despite these mixed sentiments, the long-term outlook for the tech profession remains overwhelmingly positive. A significant majority (8 in 10 tech professionals) expect the tech industry to continue its growth trajectory over the next five years. This sustained confidence in the sector’s potential is a positive sign amidst the current uneasiness.
Thinking about next year, what is your overall confidence level surrounding economic conditions?
Shifting Focus in Tech Skill Development
In terms of skill development, the survey indicates an emphasis on artificial intelligence and machine learning (AI/ML). This trend aligns with tech professionals' expectations that AI/ML will be the most rapidly growing field over the next five years, with 8 in 10 professionals selecting it as the area of greatest opportunity, consistent with last year’s findings. The good news for tech professionals is that according to 76% of HR professionals, the opportunity to be trained or upskill in AI or ML skills is already offered. To read more about the state of tech sentiments regarding AI, you can read about it here.
Conversely, the focus specifically on cloud technologies has declined significantly this year. This shift may be partially explained by how much cloud has matured in recent years, driving the skillset to be more generalized, which has led fewer professionals to invest in upskilling in this area specifically.
In which of the following areas are you training/upskilling in anticipation of future growth?
Which of these areas do you expect will see the most growth in jobs/careers over the next five years?
HR Professionals Express a More Positive Outlook on the Tech Industry
A striking contrast exists between the economic outlook of tech professionals and that of HR professionals. While only 31% of tech professionals express optimism about the economy, a substantial 79% of HR professionals maintain a positive outlook. This disparity may be partly attributed to the higher incidence of layoffs among tech professionals – compared to tech professionals who report a job loss rate of 16%, only 4% of our HR respondents reported a layoff. While still a heavy impact on the industry, HR professionals were much less impacted by layoffs.
Also encouraging: 70% of HR professionals surveyed believe that tech hiring will increase for the remainder of 2024. This expectation suggests that, while the tech sector is facing uncomfortable shifts, there is confidence among the HR professionals tasked with filling open roles that the demand for tech talent will rebound soon.
79% of HR professionals maintain a positive outlook.
70% of HR professionals surveyed believe that tech hiring will increase for the remainder of 2024.
Comparing this year to last year, would you say tech professional hiring at your organization has…
Do you anticipate your organization’s hiring needs for tech professionals to increase, stay the same or decrease for the remainder of 2024?
The Bottom Line
Tech professionals feel the challenges the tech industry faces: Layoffs have increased significantly compared to last year, with a large portion of laid-off professionals immediately seeking new jobs. The number of full-time employees has also declined. Tech professionals at smaller companies (<500 employees) are more likely to express concerns over company stability/performance.
Compensation continues to be a key motivating factor for tech professionals: Increased compensation is still the main reason a tech professional might take a new job in the next year. Consistent with last year, four in 10 tech professionals have or had a side gig, most commonly citing supplemental income as the motivating factor.
Despite some concern, optimism persists: While overall optimism about the next year's economic conditions remains low, it hasn't changed compared to last year. The tech industry is still seen as a growth sector, with AI/ML being the most sought-after skill and expected to experience significant growth in the next five years. Cloud, on the other hand, is losing popularity.
Optimism gap between tech professionals and HR professionals: While tech professionals are overwhelmingly negative about the economy and their job prospects, HR professionals are overwhelmingly positive. Additionally, most HR professionals expect tech hiring to increase in the coming months.