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IT Job Market: Thousands of Jobs Lost but Unfilled Positions Still Available as Salaries Remain Flat

Two takes on IT jobs.

First, Janco and Associates report that in the last two months, forty-four thousand nine hundred jobs have been lost.    That said, there are over one hundred forty-five thousand unfilled jobs for IT Pros.   According to Janco, companies that have to hire replacements do so with the caveat that payroll costs remain flat and full-time equivalent (FTE) counts go down or at least stay flat. Many CIOs’ 2023 IT budgets planned to increase salaries for IT pros to address the inflationary pressures employees face. They’re now reviewing those plans. With that in mind, median salaries for IT pros in 2023 will be 3%-4% salary above 2022 levels, not the 7-8% budgeted.   Janco has revised downward its forecast for IT job market growth in 2023 to just over 60,000-70,000 new jobs.

And second, CompTIA‘s latest analysis shows a relatively modest pullback in tech employment and employer job postings for future hiring. The data includes several mixed messages. Tech sector employment declined in February. However, companies added new jobs in PC, semiconductor, and components manufacturing for the fifth straight month.  The unemployment rate for technologists rose to 2.2%, up from 1.5% in January, according to the IT industry trade group’s report. That’s still over a point below the 3.6% rate for all workers nationally.

With that, I want to add some more data to the mix.

Voluntary turnover (people willingly leaving their jobs) declined to 22% in 2022 from 36% a year earlier, according to a survey of more than 4,900 companies worldwide, detailed in Payscale’s 2023 Compensation Best Practices Report

In the technology industry, the voluntary turnover rate declined even further, to about 19% in 2022, according to the 14th annual report from the Seattle-based compensation software and data company.

63% of tech workers report they have started their own company post-layoff, according to a recent survey of 1,000 professionals laid off during the pandemic years, published by Clarify Capital. Most of these new ventures, 83%, were in the technology industry.   93% report they are now competing with the company that let them go. 

And, how about this from AxiosPost-layoffs, the employees who didn’t lose their jobs often see a decline in performance and feel less engaged at work, especially in research-intensive industries, one study found.   Layoffs also can lead to more turnover, as folks — typically the top performers — jump from a sinking ship. Lately, there’s been talk of people “rage-applying” for other jobs.

Why do we care?

Mass layoffs may look good on paper… but it’s not that clear cut.     One of the statistics I both keep checking and find consistent is that more IT providers are created during down times.      It’s easy to think that those dismissed from these IT jobs are the “bottom tier,”… but they were hired at world-class organizations.  They’re competent individuals.     They’re finding new roles quickly, too… and some are becoming entrepreneurs and coming for their previous employers.

In a tight job market.     IT providers… some of those will be your new competitors, unbound by a legacy history.   

May you live in interesting times.    

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