Home Business For the first time in recent years, average tech salaries decreased in 2023, according to Dice. The CEO says not to worry

For the first time in recent years, average tech salaries decreased in 2023, according to Dice. The CEO says not to worry

0
For the first time in recent years, average tech salaries decreased in 2023, according to Dice. The CEO says not to worry

[ad_1]

In the years that Dice has been collecting tech salary data, average tech salaries have increased virtually every year. Until 2023.

Dice’s annual Tech Salary Trends report released Tuesday found that in 2023, tech salaries stagnated and even slightly dipped by $155 to an average of $111,193. For comparison, from 2021 to 2022, average tech salaries grew by 2.3%.

Some of the occupations with the biggest statistically valid declines include among cloud architects/engineers (-15.8%), and product managers (-6.7%). On the flip side, other occupations saw significant salary growth, such as systems administrators (+11.2%), software developer (+6.5%), and program analyst/manager (+6.1%). 

Despite the historical decline, Dice CEO Art Zeile sees the changes as more of a normalization of the market the likes of inflation. Dice’s report released in early 2022, which reflected survey data from the third quarter of 2021, found an average tech compensation growth of nearly 7%, he says—adding that 2023 brought a lot of uncertainty to the market.

“In the course of the year, we saw a diminishment of the tech job postings,” Zeile tells Fortune.  “So, the demand for technology workers receded compared to 2022. Again, it was a settling effect, from what we saw as a surge in 2022.”

Zeile added that despite the tech unemployment rate hovering around 2%, there were still a lot of layoffs in the field. 

According to Layoffs.fyi, 262,595 people from 1,188 tech companies lost their jobs in 2023. In 2022, those numbers were 164,969 people from 1,064 companies.

Yet, Zeile says these findings are not a reason to panic and that the demands and growth will continue in the years to come.

“There’s nothing fundamentally wrong with the tech employment market, that ultimately, tech workers are one of the most important drivers of the United States economy, and projected to be so for the next decade,” he says.

‘Migration from the coasts’

Tech workers are also increasingly dissatisfied with their salary. As compared to 2022, 6% less tech professionals are happy with their compensation in 2023. 

This underlying resentment can be seen in the geographical and locational changes when it comes to salaries. For example, Silicon Valley lost some ground (-3.3% for California) whereas states where cost of living is less of a burden, the likes of Wisconsin (+16.9%), Tennessee (+13.6%), and Utah (+11.1%) saw significant growth.

Zeile calls these changes a “migration from the coasts,” as more and more workers and companies are deciding to move to the interior US where there may be a better quality of life and more business-friendly atmosphere.

This migration is something that may even be exacerbated this year because based on the report data, 93% of tech employees are either looking or would be open to hearing about a new job opportunity.

“As a result, we predict that 2024 will be a year of significant turnover as tech professionals act on their dissatisfaction and jump to new roles, possibly in new industries,” the report states.

Zeiler’s advice for those seeking to either get started or find a new role? Look in your own backdoor; many opportunities inside and outside the tech industry are popping up every day in small towns and big cities.

2024’s in-demand skills? AI and data analytics

In an era of an increasingly data-reliant society, having AI and data skills are paying off. There has been a 10x spike in the number of job postings related to AI since 2022, Zeile says. A rise, he adds, exceeds the trends for other growing areas like cybersecurity and cloud engineering.

“The biggest opportunity areas are going to be AI,” Zeile tells Fortune. “There’s no question about it.”

Jobs specifically relating to AI and/or requiring specialized AI skills exceed 10% of all tech job postings, according to CompTIA

There’s no sign the necessity for AI skills is going to slow down anytime soon. In fact, 85% of business leaders plan to boost their spending on AI technology this year.

Because of the rapid growth, many companies are also removing or reducing degree or years of experience requirements on job postings. Instead, companies are leaning more on skills-based hiring in order to find talent as well as to be more inclusive. 

But gaining these skills can be complicated because there are so many different learning pathways like certifications and bootcamps. There’s not necessarily a “gold standard” on what’s the best way to success, Zeile says. 

Around 51% of tech professionals have a technological certification, according to the new Dice report.

“I personally think that the industry is very, very fragmented,” he says. “Nobody has really decided that one set of skills tests or one duration of skills test really works. So, everybody’s kind of experimenting with that right now.”

Regardless, AI is going to be a major factor for businesses and the workforce because of its trajectory to affect essentially all parts of society.

“I think the more astute business leaders understand that this is one of those transformative technologies,” Zeile says. “It’s like the early days of the internet; it’s like the early days of the smartphone, it’s going to change the way that we do business.”

[ad_2]

Source link