Unemployment is near historic lows – why’s it so hard to get an IT job?

Unemployment in IT fields has been dropping in recent months. Generative AI (genAI) is opening up new career opportunities. Inflation is deflating, and the US economy appears strong.

So, why is it so many people are still finding it hard to land a job in technology?

This year, large enterprises, including tech giants such as Alphabet (Google), Dell, Intel, Microsoft and Cisco, have announced significant layoffs. So far in 2024, 168 tech companies have laid off more than 42,000 employees. That’s still a vastly smaller number than the 262,682 staffers laid off by tech firms in 2023.

Multiple research firms reported that the unemployment rate for IT workers dropped sharply in October. One report cited a 37% slide — a marked shift from months of incremental increases and plateaus.

One reason for the trend: small to midsize companies that had been starving for workers were scooping up talent left in the wake of enterprise layoffs. According to management consultancy Janco Associates, the IT unemployment rate dropped from 6% in August to 3.8% in September, while some other industry sources estimated it as low as 2.4%.

Last month, according Janco, the number of unemployed IT professionals in the US dropped from 148,000 to 98,000. (Janco derived its findings from a US Bureau of Labor Statistics (BLS) report released at the beginning of November.)

More recently, however, hiring has slowed, in part because of a lack of qualified candidates and because the number of job openings shrank as IT positions were quickly filled earlier this year, according to Janco Associates CEO Victor Janulaitis.

“In the last three months the IT Job market shrank by 21,900 jobs,” Janulaitis said. “Overall, that is a flattening of the long-term growth rate pattern of the IT job market. Based on our data and forecast models, there will be no growth in the IT job market in [the remainder of] calendar year 2024.”

Janco Associates

A crisis of confidence for job-seekers?

ZipRecruiter just released its latest Job Seeker Confidence Index; it found that confidence has dropped to its lowest level since the index began in Q1 2022. Forty-one percent of job seekers reported it is now much harder to find a job, and almost half of job seekers (43%) said their job search is going poorly, according to the report. Only 13% of job seekers described their hunt as going well — the widest gap in nearly three years. More than half of job seekers (53%) said there are fewer opportunities compared to six months ago, and 34% said they had to look outside their usual field.

That “flattening” in job growth has led to a dour mood among IT workers. A new survey of more than 1,100 individuals in high-demand tech roles by online hiring platform Indeed found more than a third of tech talent is concerned about layoffs in the next year. Four in 10 believe if layoffs occur, they’ll be impacted, 70% said that they are likely to start looking for roles at other companies if their current company does layoffs, and 79% feel pressure to upskill because of the rise of genAI.

The dynamic of smaller companies hiring more employees also added to the shift in needed skills.

“The economy is slowing,” Janulaitis said. “However, there are a number of jobs unfilled by IT pros. The primary culprit is the lack of qualified individuals to fill the open positions.”

Savi Thethi, who leads tech transformation consulting for the Americas at Ernst & Young, agreed that despite low unemployment, many IT job seekers struggle due to a shortage of skills in crucial areas such as data analytics, artificial intelligence, and cloud computing. The rapid evolution of those technologies has outpaced the availability of qualified professionals, creating a gap between demand and supply, he said.

“In addition, companies are increasingly investing in reskilling and upskilling their current workforce, not only within their IT departments but across the entire organization, to increase digital fluency and better prepare their workforce for the future,” Thethi said.

One of the biggest changes in the IT job market is that companies are less interested in college degrees and more likely to be seeking specific hard and soft skills such as problem solving, critical thinking, communication, and change management. They also want employees who can simply get along with others.

Companies also want candidates who have a mix of business and tech skills, according to Thethi. “Generally speaking, what can IT workers in the hunt for a new job do to increase their odds of landing one? Obtaining certifications in key areas such as AI, data science, and cloud computing is quick in many cases. Additionally, leveraging social platforms to build and expand professional networks can lead to new opportunities and valuable connections.”

It’s also crucial for job seekers to highlight their business acumen, showcasing how their skills and contributions have driven value creation and business outcomes in previous roles, he said. “By combining technical expertise with strong business skills and a proactive networking approach, IT professionals can significantly enhance their job prospects,” Thethi said.

Uneven demand for IT pros, depending on skills

Allison Shrivastava, an economic research associate at the Indeed Hiring Lab, said that while the unemployment is low, some sectors are doing much better than others. For example, many in-person and service sectors have job postings well above their pre-pandemic baselines, while other sectors, including software development and IT, are below.

There are several reasons tech-related sectors aren’t doing as well as others. In particular, the sectors expanded during the post-pandemic boom, with job postings in software development reaching well above pre-pandemic levels, Shrivastava said. The declines in hiring for those jobs could be related to a market correction after several years of rapid growth.

“These sectors are also pretty costly to hire in, both in terms of time and money, so employers could be more cautious in expanding their employee base, favoring a wait-and-see approach while the labor market settles,” Shrivastava said.

Linsey Fagan, a senior talent strategy advisor at Indeed, called the tech job market “unique right now.” With tech job volume down and more talent looking, job seekers can take steps to improve their success.

“First, tech is advancing rapidly, underscoring the importance of upskilling to remain competitive,” Fagan said, adding that the future of work will increasingly be shaped by AI, forcing tech pros to continually adapt to stay relevant.

Employers are currently struggling with the question of how to future-proof their job descriptions, since they are not 100% sure on what skills will be essential, according to Amy Loomis, a vice president analyst with research firm IDC.

“Job seekers need to show experience with current IT required skills as well as those that will be valuable for the future to drive AI-enabled business. Increasingly, enterprises require that job candidates verify their skills in real-world scenarios, like labs,” Loomis said. “Employers take significant stock in badging as a marker of proficiency, but some certifications can only be achieved by being employed somewhere that offers the training to get the badge, so it’s a Catch 22.”

A key difference between last year and this year is the speed with which skills are becoming outdated and the need for employees to undertake continuous learning to stay current, Loomis added.

James Stanger, chief technology evangelist with IT industry group CompTIA, said hiring managers are looking for more specialized knowledge in potential hires in areas such as automation, cloud computing, data security, and incident response. Hands-on knowledge is essential for demonstrating true skill capabilities.

Remote work is less of an option worldwide than it was last year, according to Stanger, which has led to an increase in security and privacy regulations, such as NIS2 in the European Union, SEC regulations in the United States, and the Cybersecurity Act in Malaysia.

“Hundreds of regulations have appeared, mandating the use of things such as Software Bill of Materials (SBOM) and imposing secure by design requirements,” Stanger said. “They are having an effect on hiring, because they drive hiring managers to look for people with an understanding of these regulations and best practices.”

AI skills are beginning to “creep slowly into serious job role descriptions,” he said.

“Automation is also increasingly important. That’s significant change. Data analytics knowledge and the ability to manage data has also increased in demand,” Stanger added.

According to Indeed’s AI at Work report, AI is expected to impact jobs that require highly technical skills. For IT professionals, staying on top of the evolving needs of the market, especially in areas like AI, machine learning (AI/ML), and cloud computing, will be critical. “At Indeed, we like to say AI won’t replace jobs, but people who can use AI well will,” Fagan said.

Stanger added that job seekers need to learn how to evaluate data as it comes in from AI programs. In other words, AI doesn’t yet create “information,” just just creates the data; it takes a human to interpret that data so that it can be applied to a business use case. If you can demonstrate you know how to do that, Stanger said, “that’ll get you some great interview opportunities.”

“Leaders of organizations in literally every sector have realized that wise use of technology is critical for any organization to stay on mission, or serve its constituencies, or remain profitable,” Stanger said. “As a result, hiring managers are reacting to significant pressure from the challenge to make sure their workers can map technology to business needs.”

In addition to AI skills, technologies like the programming languages Rust and Go, knowledge of Google Cloud Platform, AWS, and cloud management platforms such as Terraform, are all experiencing a surge in demand — with relatively few job seekers to fill those open roles. One place to acquire those skills: IT certifications.

The top IT certifications listed in tech Job postings for Q3 2023 vs. Q3 2024, measured in the percentage of each based on total tech job listings. Despite some certifications growing in demand and others shrinking, there hasn’t been a significant change in demand for certifications overall.Indeed

According to Indeed, the top 10 certifications ranked by highest salary in job listings are:

CISSP

PMP

IAT Level II

DoD 8570

IAT

Certified Information Systems Auditor

CompTIA Security+

CCNA

CompTIA Network+

CompTIA A+

Certifications directly related to the role someone is being hired for are essential and should be called out in the job description, according to Tamara Larsen, Indeed’s director of IT Infrastructure & Platforms. These typically include certifications from recognized third-party providers such as AWS Cloud, Azure Cloud, Azure Active Directory, PMI Project Management, or CSM Scrum Master, among others.

In addition, certifications that help develop complementary skills, such as Leadership Development, Professional Writing, Toastmasters, or other technical certifications not explicitly required, can be helpful, too. “However, too many certifications that are not relevant can be considered a negative,” said Larsen.

“Learning those skills, and others related to AI, can give candidates a significant advantage in securing roles in what can only be described as a ‘dynamic landscape,’” said Indeed’s Fagan.

The good news for those currently working in IT: training is nearly always free.

“Our research found that 89% of tech professionals use company-provided training opportunities to keep their skills fresh. And with gen AI gaining momentum, 79% of tech professionals feel pressure to upskill,” Fagan said. “Most employers offer tuition reimbursement or upskilling opportunities, so it would be a missed opportunity not to take advantage.

“Additionally, adapting and integrating AI into workflows is becoming essential,” he added.

Flexibility is a priority for many job seekers, with tech professionals favoring remote roles over in-office ones. However, staying open to hybrid or on-site work can help job seekers find jobs faster.

“Our research found that professionals who work on-site about four days per week tend to want to stay with their employers, likely due to the collaboration and sense of community fostered by in-person interactions,” Fagan said. “By staying open to upskilling, particularly in high-demand areas and in AI integration, and considering flexibility in work location, tech job seekers can better navigate today’s tech job market.”

If hiring managers are looking for more evidence of your experience, then find clever ways to get experienced people to vouch for you. And, find ways to lead hiring managers into feeling confident in you.

“That’s more than just tech skill; you need to be a business tech problem solver. The way to prove that is to have a trusted third party do that for you,” CompTIA’s Stanger said. “That’s more than just tech skill; you need to be a business tech problem solver. The way to prove that is to have a trusted third party do that for you.”