The Competitive Landscape of the Software Development Job Market

Earlier this month, the United States Bureau of Labor Statistics released its monthly jobs report which revealed that software development job postings are down 28% from pre-pandemic levels, and this after the tech sector experienced massive layoffs in 2022 and 2023.

What used to be a cushy career path in development and IT is now changing, and other factors such as advancements in artificial intelligence (AI) are also making it harder for dev professionals to secure jobs and advance their careers.

Despite challenges, software developers remain resilient and are taking steps to improve their hireability — and their employers should take note.

The software development job crisis

Following an explosion of technology job hiring during the pandemic, 165,269 tech employees were laid off in 2022, followed by another 263,180 in 2023, according to job market watchdog Layoffs.fyi. And thus far in Q1 of 2024, there have been 50,158 layoffs, on pace to keep up with the last two years’ numbers.

What’s more, as other sectors begin to recover from the economic downturn of the past two years, the tech sector continues to struggle. The bureau’s report revealed that tech job postings are 25% below pre-pandemic levels, with software development harder hit at -28%.

In an interview with CNBC, ZipRecruiter’s Chief Economist Julia Pollak said the numbers “suggest that the ‘tech-session’ is still not behind us despite this huge rally in the stock market.”

Software and IT professionals are also worried by the existential threat that AI poses to their livelihoods, especially with the wide adoption of generative AI like ChatGPT after its much publicized launch in November of 2022, and the recent launch of Peter Thiel-backed Cognition Labs, which bills itself as “the first AI software engineer.”

A January survey from media company Motherboard and Blind, an anonymous platform for verified employees, found that 90% of software engineers found it more difficult to get a job, with 66% qualifying it as “much harder.” Additionally, 80% said the job market was more competitive, while only 6% were “extremely confident” in their job prospects, and 60% of surveyed engineers said they thought their companies would hire less developers due to AI.

“Of course the aftermath of the layoffs has created an atmosphere of job insecurity, prompting developers to focus on maintaining their current positions,” said Kirimgeray Kirimli, President of Flatiron Software, a full stack development firm. “Simultaneously, there is a pressing need to strategically advance their careers by acquiring new skills and staying abreast of new technologies.”

Software developers increasing their chances of getting hired

As pressure mounts, software professionals are looking for ways to keep them successful in a competitive job market.

Ironically, some job-seekers are turning to AI to help them game the resumé selection process. But there are other ways of standing out.

As in any job space, Kirimli recommends making connections to help open up job opportunities.

“Building a network is essential for every professional, not just people working in the field of technology. I have found many of my jobs through personal networks and I have seen a lot of executives move into new roles with the help of their networks,” he said.

One of the best ways to build connections is by helping others. Working on a GitHub project, reaching out to past colleagues or alumni from college to see if you can contribute to projects they’re working on can help.

Additionally, being active on social media, contributing valuable advice to conversations surrounding software development issues can also get you noticed by companies looking for workers.

What’s more, staying active as a developer, even when you’re out of work, can make you attractive to recruiters. John Macdonald, a long-time software development team leader, said he asks developers one simple question when hiring: What are you coding at the moment?

This type of question can separate those with a true passion for software development, from the rest. Although at times it may feel discouraging, out of work developers should keep coding on passion projects that interest them, or upskilling themselves through further education.

“As a software engineer specifically, you will always have to learn and improve yourself,” said Kirimli. “Emerging advancements in AI will change the software development space, but as long as engineers stay up to date, there will be work to be done … Whether this will be in the form of prompt engineering or something else, time will tell.”

How can managers best set up developers for success?

We mustn’t lay the full responsibility of landing a job on the developers. The tech industry, and society as a whole, must have a long discussion about the ramifications of companies using AI to replace human talent.

Labor unions are working to get tech workers a seat at the bargaining table with companies that are implementing AI, and last December, Microsoft agreed to union contract language governing its use of AI, although it applied to a small gaming studio within the company.

On a more personal scale, managers who are interested in the success of their employees can also do more to set them up for career advancement.

Kirimli, the former software engineer, said that fostering an environment that values continued learning is “crucial” for employees’ wellbeing. “This involves supporting educational initiatives, providing resources for skill development, and ensuring that our teams stay ahead in the ever-evolving tech landscape,” he said.

According to Sashank Purighalla, CEO of cloud management platform BOS Framework, “Companies should create a ‘safe space’ for experimentation within project boundaries when possible. This allows developers to test new tools, explore innovative approaches, and learn from experiences—including failures—in a controlled environment, fostering creativity and problem-solving skills.

Additionally, evolving the paradigm of how promotions and demotions dealt with in the tech space is also key.

“We recognize the significance of data-driven decision-making” in the promotion process, said Kirimli. Rather than relying on the sentiment of the manager, developers are encouraged to showcase their contributions through quantifiable results and measurable impact.

Kirimli said his company uses a proprietary tool, called Snapshot Reviews, to allow for a clear picture of a developer’s performance, their contributions, and how they compare to the rest of their team. The software uses AI to analyze Jira tickets and GitHub commits to provide feedback and render performance graphics for teams.

Additionally, hiring managers should ensure they’re setting new hires up for success. “The problem isn’t really the quantity of positions, it’s the number of quality positions with clear expectations and skill matching,” said Sajid Mohamedy, an Executive Vice President at technology consultancy Nisum. “A data science degree doesn’t make you a great software engineer. Some of the best engineers I’ve come across don’t have degrees at all. The challenge is to evaluate an engineer correctly—and this process can be quite demanding for both parties.”

He added, “I’m convinced that coding requires a special mindset, somewhat akin to math/logic. The better strategy is to find candidates with the right mentality and invest in new hire training periods to transfer their skills to the business use case.”

The so-called “tech-session” looks to be on track to continue into 2024, and with the uncertainty surrounding AI, unfortunately, the job market for developers will most likely remain competitive throughout the year. But developers can, and should, do what is necessary to keep advancing their careers and making themselves more hireable — and we should help them too!