In recent months, there have been a number of tech companies putting on the brakes when it comes to hiring. Amazon initially stopped hiring new tech workers and will initiate layoffs. Meta/Facebook and Twitter have been more aggressive in this regard, letting thousands of employees go. But these developments don’t mean the outlook for technology employees is necessarily bad. In fact, even with Big Tech cutting back, the demand for skilled technology workers continues to grow. And it’s in several industries not usually considered the most popular for this particular workforce.
As the use of data analytics and artificial intelligence expands, a number of business sectors are shifting their perspectives. Industries that rarely pursued tech workers in the past are now actively recruiting them. At the same time, they’re also enjoying the current labor market in this regard. Not only is the supply of technology employees increasing because of Big Tech cutbacks. But these same workers are starting to show a preference for a diversity of fields beyond Silicon Valley. As a result, it looks as if 2023 is going to be a major year of change for the technology labor market.
“Nearly every company is going through this [search of tech workers] — they need tech talent.” – Lori Beer, Global Chief Information Officer, JPMorgan
A Growing Need Across the Board
For the last two decades, technology firms have enjoyed tremendous growth. Since the dot.com crisis, there has been a steady increase in growth that has fueled a strong pipeline for tech workers. In the post-pandemic world, the tech industry is seeing an unusual reset with falling stock prices and declining revenues. As a result, even the most skilled technology employees are having trouble finding jobs in the sector. But as one industry cuts back on technology needs, others are just now ramping up. These include a variety of sectors including not only healthcare and banking but also retail and manufacturing.
When it comes to these other industries, their approach to tech workers has been quite different from Big Tech. You might say they have been more the tortoise while technology companies represent the hare. Non-tech firms have invested in technology employees over the years, but they have been more methodical and gradual in nature. In contrast, Big Tech increased their workforce tremendously during the pandemic. Companies like Amazon, Alphabet and Meta invested heavily in staff. So, did other tech-heavy firms like Lyft, Netflix, Doordash and Snap. But shifts in consumer preferences have made them change course. And non-tech industries are reaping the benefits.
“If this transition redeploys skilled tech workers to other sectors of the economy, that may very well be a healthy development.” – Tim Herbert, Chief Research Officer, CompTIA
Evidence Supporting New Tech Labor Trends
As mentioned, healthcare, banking and retail are among some of the most notable companies in search of tech workers. Each of these sectors are increasingly in search of skilled workers in cloud computing, data analytics, and artificial intelligence. They are also seeking expertise in data sciences and cybersecurity. At first, this may seem surprising. But as it turns out, each of these industries enjoy massive amounts of data that can be strategically leveraged. This is especially true in healthcare, which is in dire need of quality and cost-containment improvements. They key, however, is acquiring the right technology employees for these tasks. And as of late, these pursuits have been much easier.
The same is true for retail giants like Walmart as well as financial institutions such as JP Morgan Chase. These companies also have large datasets that can be used to drive positive consumer experiences. And with the many data breaches reported in these sectors, cybersecurity protections are also notably needed. Understanding this, it’s perhaps not surprising that Walmart has added over 5,000 tech workers this year to its force. JP Morgan Chase now employs around 55,000 technology employees. And United Health increased its technology labor force by 10,000 over the last decade. These statistics demonstrate how the technology labor market is shifting before our eyes.
“[Non-tech firms] might have been interesting to some people in the past, but in this environment they’re interesting to [every tech worker].” – Sherveen Mashayekhi, Chief Executive, Free Agency
Changing Needs of Tech Workers
Changes in attitudes among non-tech companies are not the only driving force of these employment shifts. Interestingly, many tech workers are seeking job opportunities beyond traditional technology businesses. In part, this has been driven by the employment cutbacks in the technology sector. But it has similarly been encouraged by other factors as well. Unlike startups and other tech companies, many non-tech firms offer greater job security and stability. They also now have sizable number of technology employees that promotes a stimulating work culture for tech workers. These are attractive aspects that have not necessarily been present in these sectors in past years.
The other intriguing aspect of recent preferences among tech workers involves a need for inspiring change. It’s not that working in Big Tech has become stale or boring. However, making a difference in other industries using technology expertise also has appeal. This is especially relevant in healthcare, which has greater altruistic motivations. But it is also true in banking, retail and manufacturing. Because technology employees have not been as involved in these industries previously, opportunities for innovation are abundant. This is also a factor that is encouraging a shift in technology talent destinations.
A Lasting Trend Despite Sector Shifts
With the success of Big Tech in the last few decades, tech workers have enjoyed a strong labor market. In fact, the average unemployment rate among technology employees is routinely about half of the national average. Interestingly, this has not changed as of late. This past year, the national unemployment rate was 3.7% while unemployed tech workers were around 2%. In addition, even amidst tech firm cutbacks, the year-on-year growth in tech employment expanded 12% in 2022. Thus, despite sector shifts, technology skills continue to grow in demand from a global perspective. Migrations are occurring in where these workers find jobs. But at the end of the day, the need for advanced technology skills continue to expand.