"The hiring slow down across Big Tech presents a massive opportunity for other sectors of the economy to attract top-tier technical talent that has often eluded them and is desperately needed. We're already seeing a number of companies across a wide range of industries catch on and increase their entry-level technical job openings. We expect this trend to continue as the Class of 2023 starts its job search in earnest in the months ahead."
Garrett Lord, CEO & Founder, Handshake
2022 was a difficult year for workers in tech, as the industry was hit hard by hiring freezes and layoffs. Despite an overall slowdown in tech sector hiring, there are several bright spots in the technical labor market that should give early talent reason for optimism.
- Tech industry is still investing in (tech) talent: Despite job cuts and layoffs, the tech industry is still investing in entry-level technical talent, suggesting they understand it’s a must for maintaining a long term competitive advantage. Job postings are down significantly for non-technical talent while technical talent within the tech industry is showing an increase in demand.
- Software and computer tech jobs outside of tech industry: While overall demand for entry-level technical talent associated with software and computer engineering softened in 2022, demand for these roles increased in many non-tech sector industries. These industries are poised to capitalize on the recent availability of tech talent that may have historically been difficult to attract. Job postings are already up in some industries, with the largest increases in government (up 36%), construction (up 28%) and finance/professional services (up 3%).
- Tech, but not in software: Across industries, job postings for technical talent outside of roles traditionally associated with software engineering roles were up 24% in 2022 compared to a year earlier. The tech industry accounted for a lot of this increased demand with job postings up 46% for roles necessary for innovation related to semiconductors, clean energy, and artificial intelligence.
Demand for Tech Roles within the Tech Industry
The tech industry continues to invest in entry-level technical hiring, demonstrating an understanding of its importance to maintaining a long term competitive advantage. Although overall job postings within the tech industry were down for entry-level roles, demand for technical roles was much higher compared to non-technical roles, especially when considering both roles associated with traditional software engineering and other technical roles in cross-disciplinary specialties that rely on other STEM fields. Job postings for technical roles were up 4.2%, while other functions posted drops in job postings in 2022 compared to a year earlier: general office roles had a decline of 18%, sales roles had a drop of 20% and marketing job postings dropped 24%.
Demand for Tech Roles outside of the Tech Industry
When only looking at the subset of technical talent that is typically associated with software engineering roles, we observe large variations across each industry. While the tech industry exhibited softened demand for this traditional entry-level technical talent in 2022, with job postings down 14% compared to 2021, demand for full-time technical roles outside the tech industry was down by only 3.7% with some industries posting more job postings in 2022. As a result, several industries are poised to capitalize on the recent availability of tech talent that may have historically been difficult to attract. Job postings are already up, with the largest increases in industries including government (up 36%), construction (up 28%), and finance/professional services (up 3%).
Strong demand for other technical roles
Despite decreased demand for traditional tech roles associated with software and computers in 2022 compared to 2021, demand for technical talent outside of those roles is increasing. Across all industries, hiring for roles such as robotics engineers, energy engineers and manufacturing was 24% higher in 2022 compared to 2021.
Companies in the tech industry led the way in hiring for non-software engineering technical talent, demonstrating a 46% increase in job postings in 2022 compared to a year prior. There is also strong demand for non-software or computer technical talent in construction (up 37%), government (up 33%), and manufacturing (up 21%).
These trends may be driven in part by increased investments in sectors such as semiconductors and clean energy spurred by new federal funding. Our data showed an increase in job postings for roles needed for the growing semiconductor industry, such as Photonics Engineers or Nanosystems Engineers. Similarly, increased clean energy investments create the need for technical talent that is complementary to software engineering roles such as Materials Engineers or Wind Energy Engineers. According to Pitchbook, US VC funding for climate tech reached $16 Billion in 2021, which was more than double the funding from the prior year. The Inflation Reduction Act of 2022, the largest single investment in climate and energy in US history is also expected to provide additional capital to innovation in clean tech in the coming year.
A rise in technical hiring for roles complementary to software engineering may also reflect how technological advancements in a wide variety of scientific disciplines have opened the door to new solutions that rely on cross-disciplinary teams. Improvements in AI, robotics, and computer vision have allowed new frontiers in technology to be explored which necessitates complementary skills in addition to software skills. Crunchbase has indicated that global VC funding to AI startups has held at close to 10% in recent years with robotics, autonomous vehicles, and enterprise software leading the way with other sectors including biotechnology, computer vision, semiconductors, logistics, and agtech following.