IT job growth flattens as economic concerns persist

The number of new IT jobs created in calendar year 2023 flattened with just 700 positions added, which signals continued concern among hiring managers around economic uncertainty and growing demand for skills focused on emerging technologies. For comparison, 2022 saw 267,000 jobs added, with industry watchers attributing the dramatic difference to tech layoffs and other cost-cutting measures.

According to Janco Associates, despite companies adding some 21,300 jobs in the fourth quarter of 2023, the overall increase for the entire calendar year still comes to just 700 new positions. Using data from the U.S. Bureau of Labor Statistics analyzed by Janco, the unemployment rate for IT professionals dropped below the national unemployment rate (3.7%). According to data from CompTIA, tech occupations throughout the economy dropped by 210,00 in November 2023, and the unemployment rate for tech occupations fell to 1.7%, making it less than half the national rate. In December 2023, the unemployment rate for tech occupations increased to 2.3%, according to CompTIA reports, while the national unemployment rate stands at 3.7%. There are currently some 88,000 unfilled positions in the IT sector and 86,000 reported unemployed IT professionals, according to Janco.

“Based on our analysis, the IT job market and opportunities for IT professionals are poor at best. In the past 12 months, telecommunications lost 26,400 jobs, content providers lost 9,300 jobs, and other information services lost 10,300 jobs,” said M. Victor Janulaitis, CEO at Janco, in a statement. “Gainers in the same period were computer system designers gaining 32,300 jobs and hosting providers gaining 14,000.”

A few sets of circumstances have come together to create the current conditions that IT job seekers face. For one, many companies reported adding too much headcount during the pandemic, and 2023 saw many companies correcting what they considered a miscalculation when it came to hiring. Many businesses were said to believe pandemic-level growth would continue. Another circumstance directly affecting current hiring plans is the growing popularity of generative AI, machine learning, and other types of technology automation.

“CIOs in large enterprises, experienced Artificial Intelligence and Machine Learning IT Professionals remain in high demand. Salaries for those professionals are well into the low six figures. Salaries for management positions with AI skills are in the $150K to $250K range. Experienced managers and developers are getting offers in the $125K to $165K range,” Janco’s Janulaitis added.

Among large enterprises, positions such as CIO, Webmaster, internet developer, and system support specialist remain in demand, while network services administrator and data communications manager are less in demand, according to Janco’s most recent data. For midsize enterprises, there is high demand for CIOs, CSOs, network technicians, Wi-Fi LAN application support pros, and system support specialists. There is lower demand for project managers for network tech services and network control analysts among midsize enterprises.

AI is also impacting the growth of entry-level positions, according to Janco’s findings. The report reveals that entry-level positions in customer service, telecommunications, and hosting automation are flat, and that IT leaders are exploring how to automate processes using emerging technologies where possible.

“They are focusing on eliminating “non-essential” managers, staff, and services. Experienced coders and developers still have opportunities. The highest demand continues to be for AI, security professionals, programmers, and blockchain processing IT,” Janco reports.

Positive hiring plans in 2024

Separately, Robert Half reports that the job market will remain resilient heading into 2024. According to the talent solutions provider’s recent survey, more than half of U.S. companies plan to increase hiring in the first half of 2024. While the data is not limited to the IT sector, the research shows 57% plan to add new permanent positions in the first six months of the year while another 39% anticipate hiring for vacant positions and 67% will hire contract workers as a staffing strategy.

Specific to the technology sector, 69% of the more than 1,850 hiring managers surveyed reported they would be adding new permanent roles for those professions. Still, challenges will persist into the new year, according to Robert Half, which reported 90% of hiring managers have difficulty finding skilled professionals and 58% said it takes longer to hire for open roles compared to a year ago.

“Job openings continue to exceed the number of professionals looking for work,” said Dawn Fay, operational president of Robert Half, in a statement. “With hiring expected to increase early in the year, employers need to have a strategic hiring plan in order to land the talent they need.”