The tech talent market has thrown all kinds of mixed signals this year.
Layoffs this year have thus far outpaced 2022, according to layoff tracking site Layoffs.fyi, which began tracking job cuts in January of last year. Yet U.S. Bureau of Labor Statistics data shows tech employers increased headcount last month, and IT unemployment in tech remains far behind national averages.
While tech job market indicators typically oscillate month to month, the overriding trend this year has been uncertainty. However, the need for technology hires remains stable across industries.
"It has been a pattern almost every month this year, where you may see one facet of the tech workforce is up, one is down, and then it almost reverses the next month," said Tim Herbert, chief research officer at IT trade group CompTIA.
Tech layoffs in 2023 surpass 2022 levels
Employees hit by layoffs, data suggests, were quickly reabsorbed by talent hungry organizations, often from outside of the technology sector.
Though macroeconomic signals like stubborn inflation rates have led CIOs to retarget some IT spending, the thirst for tech talent has remained, according to Scott Bickley, practice lead and principal research director at Info-Tech Research Group.
"I don't think there's talented IT people sitting on the couch unable to find work," said Bickley.
The executive response
Massive turmoil in the tech industry didn't impact executive's need to carry out transformation.
The missing component to digital change, for the large majority of leaders, is people. More than two-thirds of leaders say they struggle to find the IT workers they need, according to data from the IT Executives Council.
Mel Heckman, an IT leadership veteran with C-suite experience at several organizations, describes the recruitment process as "brutal," leading organizations to consider what types of roles need to be in-house.
"We were trying to hire a head of networking, and it's just impossible to get people to move," Heckman said, speaking during a IT Executives Council webinar in June.
As organizations become more tech-driven, it continues to be a job-seekers market. Seven in 10 technologists would currently consider a new position, while more than 4 in 5 workers who were previously laid off say they're either passively open to new roles or actively seeking them, a Boston Consulting Group survey found.
One way executives have tried to meet their goals this year despite the roadblocks is to increase reliance on outsourcing, Bickley said.
"I see a pivot to increasing the usage of IT service providers, consultancies and managed services," said Bickley. "Because they can't find a lot of the core talent, they're trying to go ahead and outsource that."
Another part of the response has involved upskilling, which more than half of companies have turned to in order to backfill critical skills gaps in IT, NTT DATA research found.
Holding onto existing talent is also key, as preserving in-house experts ensures companies retain institutional knowledge.
"You need to understand what is your top talent and make it difficult for them to want to leave your organization, so make sure that they're appropriately compensated," Bickley said.