2023 was a bumpy ride for many in the tech sector. Even in the midst of massive layoffs across the industry, the demand for tech talent remained high. Many companies struggled to attract and retain skilled tech professionals, adjusting their hiring practices and salaries to fill open roles.
According to experts, the coming year promises much of the same: a candidates’ job market, a rapidly evolving tech landscape, and continued global economic transformation. Companies will need to evolve and refine their hiring practices to meet their hiring objectives. In preparation for 2024, it’s critical that companies consider predicted trends and proactively reshape their approach to talent acquisition.
Re-evaluation of Traditional Job Requirements
The burgeoning trend toward scrapping degree requirements in favour of proven skills and experience is expected to gain momentum in 2024. The continued labor shortages, which have remained marked even in this era of mass tech layoffs, mean that employers need to re-think how they evaluate candidates.
As pointed out in a piece by Greg Lewis at LinkedIn, focusing on skills rather than experience has several benefits: “… skills-first hiring practices can help boost quality of hire, expand your talent pool, and reduce bias while increasing diversity.” Further, a piece by Jodie Cherry Roth at Recruitics posits that, “skills are 5x more predictive of job performance than hiring for education.”
The traditionally low unemployment rate in the tech sector is not expected to ease any time soon – perhaps not ever. Roth points out in their piece that even in the overall job market, the number of baby boomers retiring coupled with slowing population growth means that the United States is likely facing a “Forever Labor Shortage.” And tech, which has historically struggled to find skilled STEM workers, may see this issue become exacerbated as new technologies emerge and tech becomes ever-more important in our daily lives, requiring more skilled workers.
Particularly in tech, where skills can be learned and honed through online courses, boot camps, and certifications – not to mention hands-on learning – many jobs do not actually require a post-secondary degree.
If your company is currently using a college degree as a job requirement, it’s time to revisit your job descriptions and consider whether a degree is truly needed to excel in the position and contribute to your company’s success. Moving toward, skills-first hiring will likely benefit your company in unexpected ways.
Elevated Emphasis On Soft Skills
Employers have recognized the need to be more strategic in the race to attract and retain talent. A key facet of retention is company culture. There has been an increasing focus on building company culture in recent years and in finding candidates who fit into and contribute to that culture. When cultural fit is good, employees are more apt to feel comfortable and valued in the workplace and, as a result, are more likely to stay.
When hiring in tech, employers prioritize technical skills, even requiring candidates to go through technical interviews or coding challenges to demonstrate their expertise. This is understandable because technical knowledge is critical to getting the job done. However, soft skills are also critical to employee success across every industry. Employees need to be able to work as a team, communicate and collaborate effectively, prioritize tasks, manage their time wisely, and think critically.
While retention strategies are moving increasingly into the spotlight, and soft skills play a critical role in overall retention, soft skills are also gaining prominence because of a shift in the way tech work is done. Teamwork is becoming more important as technologies become more sophisticated and businesses rely on methodologies like agile to get projects done.
As we move into 2024, and significant shifts continue both in how candidates are evaluated and in how tech work is done, the emphasis on soft skills will continue to gain momentum.
Increased Demand for AI and Machine Learning Expertise
To no one’s surprise, experts are predicting that there will be an increase in demand for AI and machine learning expertise in 2024.
Launched in late 2022, ChatGPT and similar technologies have demonstrated the early capabilities and potential of AI – and companies are eager to tap into that technology for business solutions. Experts predict that this is just the beginning. It’s likely that 2024 will witness significant breakthroughs in AI technologies. As AI becomes increasingly prevalent in the world, it will be critical to have AI specialists on your team.
However, because this technology is growing so rapidly, there is a significant skills gap. The low unemployment rate across the tech sector, coupled with the fact that AI is an emerging technology, points to an extremely narrow talent pool for AI specialists.
This skills shortage translates to skyrocketing salaries for AI specialists, as companies adopt a no-holds-barred approach to attracting top AI talent. A comprehensive piece at Vox by Rani Molla outlines the hiring and salary trends for AI talent as of mid-2023:
People with AI skills are paid on average 27 percent more than typical tech workers, according to data furnished by the compensation software company Payscale. The median annual salary for an AI engineer was $243,500 in May, according to data by the tech career comparison site Levels.fyi, compared with $166,750 for non-AI engineers. And their pay is growing at a faster rate. Comprehensive.io, which tracks compensation across more than 3,000 tech companies, found that pay for senior software engineers who specialize in AI and machine learning grew 4 percent since the beginning of the year, while pay for senior software engineers overall stayed flat. A.Team, a firm that connects groups of tech talent with companies looking to hire their services, said 30 percent of their new pipeline over the last month was AI-related, a fivefold jump over the previous three months.
Companies looking to pursue AI-driven solutions in 2024 will need to be extremely competitive to attract AI specialists.
Prioritization of DEI Objectives
The tech sector has long recognized the need to adopt DEI objectives, but the push to achieve those objectives began gaining traction in 2020. There were a number of circumstances during the pandemic years that spurred this shift, including:
- The social justice movements that were triggered by the murders of George Floyd, Breonna Taylor, and Ahmaud Arbery;
- Workers’ re-evaluation of the importance of work/life balance;
- The shift to remote work, which allowed companies to easily integrate workers from other countries as well as those who had disability-related limitations; and
- The introduction of Gen Z into the workforce.
Additionally, as companies remove degree requirements from their job postings to expand the candidate pool, they open up opportunities to traditionally marginalized groups, many of which would benefit from stronger DEI initiatives.
While disparate factors have been coming together to drive the trend towards more inclusive workplaces, companies have discovered that diverse teams make good business sense. As pointed out in a piece at the Harvard Business Review, “DEI advocates have long argued that their efforts strengthen innovation and connectivity within organizations. We now understand that these efforts are also powerfully linked to the structural ability of an organization to change.” And that is powerful – because if the last few years have taught us anything, it’s that companies have to remain agile with the ability to quickly pivot and change in order to survive.
Provision of Remote/Hybrid Work Opportunities
Yes, remote and hybrid work is still a hot and contentious topic. Consider the language used in a recent piece at Forbes: “The return-to-office (RTO) war continues to rage—employers cracking down with in-office mandates and employees quitting.”
Big tech, including AT&T, Meta, Amazon, Google, and of course, famously, Tesla, have instituted RTO mandates. However, some experts caution against doing so, arguing that it can negatively impact recruitment, retention, and worker satisfaction in addition to the company’s overall progress and growth.
As companies continue to compete with each other to attract candidates from tech’s limited talent pool, they will need to provide employees with what they truly want. And they want to work from home. A piece posted by Pew Research earlier this year offers these compelling statistics:
Many hybrid workers would prefer to spend more time working from home than they currently do. About a third (34%) of those who are currently working from home most of the time say, if they had the choice, they’d like to work from home all the time. And among those who are working from home some of the time, half say they’d like to do so all (18%) or most (32%) of the time.
While it may be tempting to follow the RTO trend set by big tech, companies can benefit greatly by tapping into employee trends on this topic and addressing their wishes to work remotely and/or in hybrid work arrangements.
Growing Reliance On Contract Workers
Like many of the other trends that experts have predicted for 2024, the growing reliance on contract workers isn’t exactly new – but it is gaining traction. And it offers some terrific opportunities for businesses – particularly those that need to rely on tech’s limited talent pool.
Some companies might be resistant to the idea of hiring contract workers, reluctant to embrace a culture where employees come and go, wondering if those workers will ever be truly invested in the success of the company. But there are several advantages to hiring contract workers, including:
- The ability to tap into specialized expertise for specific projects;
- Improved flexibility, scalability, and agility;
- The reduction of various costs, including overhead costs, training costs, and administrative costs;
- Increased diversity, leading to improved innovation; and
- The ability to adjust your staffing levels to your production needs.
Contract work is highly attractive to workers as well. It provides them with the opportunity to work on projects that they are truly passionate about and skilled on, as well as the ability to refine their work/life balance to their personal preferences. It’s quite likely that contract work will continue to grow more appealing to talent, and businesses looking for top tech talent would do well to tap into it.