Dramatic shift in the hiring of IT Pros

IT job market shrank by 44,900 jobs in the first two months of 2023

Layoffs and economic uncertainty drove CIOs and CFOs to slow IT Hiring

(Park City UT – Janco Associates Inc. (https://e-janco.com)–   Janco reports that 2022 saw an increase of 267K new jobs added to the IT job Market. Those new jobs were in addition to the 213,000 jobs created in 2021. The tide has shifted with 44,900 IT jobs lost as major layoffs occurred and hiring new IT Pros ground to a halt.

The growth of the IT job market stopped with a decline of 10,000 jobs in January and 13,400 jobs in February. That was the first loss in the number of IT Pros employed in over 27 months. The three-month moving average of IT job market growth went negative with a trend line that shows a further decay in IT job market growth. At the same time, there is an excess of 145K unfilled jobs for IT Pros due to a lack of qualified candidates.

Moving average of IT job market growth

The CEO of Janco, M. Victor Janulaitis said, “Based on our analysis, the IT job market and opportunities for IT professionals are there but not in as broad in scope as in 2022. Layoffs, for the most part, did not hit developers. Rather they were focused on data center operations, administrative and HR roles related to recruiting, and DEI (diversity, equity, and inclusion). Some roles, especially in telecommunications and data center operations are being automated and eliminated. Driving this is, CIOs and CFOs who are looking to improve the productivity of IT by automating processes and reporting where possible. They are focusing on eliminating “non-essential” managers and staff. They will continue to hire coders and developers. The highest demand continues to be for security professionals, programmers, and blockchain processing IT Pros. Currently, there are over 109K unfilled jobs in the IT job market a drop from 216K in November.”

Job Openings for IT Professionals

IT Job Market Openings

Openings for IT Professionals

A major pullback of the number of excess jobs for IT Pros occurred in the 4th quarter of 2022 and continued through October of 2023 - economic slowing and resulting layoffs have impacted on number of unfilled jobs available for IT Professionals. In December the number of unfilled jobs for IT Professionals fell.

In January there were 156K unemployed IT Professionals

He said, “The possibility of the economic downturn is very likely and is impacting all decisions that increase technology-related expenditures. Work from home is being minimized as companies are requiring employees to be in the office at least 3 to 4 days a week. Mid-level managers are now having to justify most positions where the IT Pro is not working in the office. Companies that are forced to hire replacements, do so with the caveat that payroll costs remain flat. The 2023 IT budgets increased salaries for IT pros to address inflationary pressures faced by employees. Those are now being reviewed. Given these facts, we believe that median salaries for IT Pros in 2023 will be 3-4% salary above 2022 levels, not the 7%-8% that was budgeted.” 

The CEO added, “According to the latest BLS data analyzed, there are now just over 4.2 million jobs for IT Professionals in the US. Layoffs at big tech companies are having an adverse on overall IT hiring. More CIOs are looking at a troubling economic climate and are evaluating the need for increased headcounts based on the technological requirements of their specific business operations.”

With this as a background, Janco has just revised downward its forecast for the growth of the IT Job Market in 2023 to just over 160K from 174K new jobs. That will be less growth than in 2021 and 2022, but still at high levels. To assist in the recruiting process and address this growth, Janco has just released the 2023 editions of two products,  1) the 2023 edition of 324 full IT Job Descriptions (see https://e-janco.com/it-job-descriptions.htm)  and 2) the 2023 edition of the IT Hiring Kit (see https://e-janco.com/ithirepack.htm).

IT Job Market Growth Forecast
Latest YTD IT job market size - IT Job Market growth uncertain for CY 2024


Updated


Moving average of IT job market growth
Layoffs abound and there no longer is robust hiring trend for IT Professionals - the economy is slowing. 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. In our opinion, the IT Job Market is currently at no growth!
Unfilled IT Jobs

IT Job Market Openings

The number of unfilled jobs trend line is down as the economy softens and CIOs and CFOs look to control costs and eliminate requisitions for positions that cannot be filled. There was a major pullback of the number of excess jobs for IT Pros - layoffs have impact on number of unfilled jobs available for IT Professionals.

The CEO of Janco, M. Victor Janulaitis said, “Based on our analysis, the IT job market and opportunities for IT professionals are very limited. Layoffs, for the most part, did not hit developers. Rather they were focused on data center operations, administrative and HR roles related to recruiting, and DEI (diversity, equity, and inclusion). Some roles, especially in telecommunications and data center operations are being automated and eliminated. Driving this is, CIOs and CFOs who are looking to improve the productivity of IT by automating processes and reporting where possible. They are focusing on eliminating “non-essential” managers and staff. They will continue to hire coders and developers. The highest demand continues to be for security professionals, programmers, and blockchain processing IT Pros. Currently, there are over 145K unfilled jobs.”

He said, “The general belief there will be an economic downturn is high for many CIOs and CFOs. This is impacting all decisions around hiring new IP Pros and increasing technology-related expenditures. Working from home is no longer a priority. Mid-level managers now must justify positions where the IT Pro is not working in the office. Companies that are forced to hire replacements, do so with the caveat that payroll costs remain flat and FTE counts go down or at least remain flat. Many CIOs' 2023 IT budgets planned to increase salaries for IT pros to address the inflationary pressures faced by employees are now being reviewed. Given these facts, we believe that median salaries for IT Pros in 2023 will be 3-4% salary above 2022 levels, not the 7%-8% that was budgeted.” 

The CEO added, “According to the latest BLS data analyzed, there are now just over 4.18 million jobs for IT Professionals in the US. Layoffs at big tech companies are having an adverse on overall IT hiring. More CIOs are looking at a troubling economic climate and are evaluating the need for increased headcounts based on the technological requirements of their specific business operations.”


IT Job Market - January 2024

IT Job Market Forecast
There has been a major shift in the creation of new IT Jobs - AI and economic slowing are the drivers. The IT Job Market shrank by 57,400 jobs in FY 2023. This number is subject to change as the BLS can adjust the data for December.


With this as a background, Janco has just revised downward its forecast for the growth of the IT Job Market in 2023 to just over 60 to 70K new jobs. That will be less growth than in 2021 and 2022, but still with some growth in the latter half of this year. To assist in managing these troubled times, Janco has just released the 2023 edition CIO Management Tool Kit. See https://e-janco.com/it-management-toolkit.html. This tool kit has been updated to reflect changes to the IT Infrastructure caused by compliance mandates and the current economic environment - including WFH and Cloud processing. It meets all of the mandated security requirements and best practices.

Janulaitis said, “Many of the issues faced by the economy are due to supply chain problems. If China opens, overall supply chains should improve but will take several months. That should lessen the recessionary pressures that are driving companies to reduce staff.”

Janulaitis said, “Many of the issues faced by the economy are due to supply chain problems. If China opens, overall supply chains should improve but will take several months. That should lessen the recessionary pressures that are driving companies to reduce staff.”

Janco is an international consulting firm that follows issues that concern CIOs and CFOs. The firm publishes a series of IT and business Infrastructure HandiGuides® and Templates including IT Infrastructure Policies and Procedures, Disaster Recovery/Business Continuity Template, Security Template, IT Job Descriptions, and its semi-annual IT Salary Survey.

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