2023 tech hiring trends: What you need to know

2023 is a year of uncertainty and confusion, and the IT industry is no exception. From record-setting layoffs to skills shortages, technology professionals, recruiters, and organizations face conflicting data around the talent market. However, this year also presents businesses with incredible opportunities to improve skills, innovate emerging technologies, and change work dynamics. 

Let’s explore some of the key tech hiring trends in 2023 and how recruiters and organizations can equip themselves to navigate a dynamic talent market.

Embarking on a journey through the dynamic talent market, organizations must be equipped with an understanding of the key tech hiring trends that lie ahead.

Tech companies currently find themselves in a challenging position as they had to lay off nearly 200,000 employees. These layoffs were mainly driven by overhiring during the pandemic and rising interest rates. The latter factor impacted many tech companies because they tend to rely more heavily on investment funding than other industries. 

While it may seem that the tech job market is shrinking, the future still looks bright for highly-skilled IT professionals. Experienced tech workers are still in high demand – 79% land a new job within three months.

The need for skilled software developers extends beyond the tech industry, as businesses across various sectors recognize the importance of digital transformation and technology-driven processes. Since today’s customers expect a digital-first organization that provides seamless online experiences, innovative products, and efficient services, companies are impelled to invest in flexible IT infrastructure and skilled tech workforce.

Considering that enterprises outside the tech industry increasingly depend on technology to drive their operations, improve efficiency, and meet customer expectations, tech workers will continue to be in high demand. The most sought-after tech competencies are software development, data analytics, cybersecurity, cloud computing, and artificial intelligence. IT professionals with expertise in these domains are especially in demand in the finance, healthcare, retail, and manufacturing sectors. 

Tech companies can turn the current situation in the tech talent market to their own advantage and improve their overall operations. They can streamline processes, optimize workflows, and invest in automation and digitalization efforts. This way they can create an attractive environment for IT professionals, demonstrating their commitment to continuously improving and embracing technology.

IT firms can also leverage recent layoffs to drive digital transformation and build a highly skilled workforce. They can do that by reevaluating their talent acquisition strategies, identifying skills gaps, and focusing on hiring talent that aligns with their long-term goals.

While the tech job market generally remains strong, two sectors will see even more growth: cloud and IT infrastructure.

With an emphasis on hybrid work and the incredible amounts of data needed to remain competitive, companies from all sectors will rely on cloud and infrastructure experts to help them meet the modern world of business. In fact, over half of the enterprise IT spending will shift to the cloud by 2025. This transformation means infrastructure will see job growth and company investment. Gartner experts estimate that infrastructure as a service (IaaS) spending will increase to $150.2 billion in 2023.

The Great Resignation of tech workers left companies with serious knowledge and skills gaps and decreased productivity. 71% of IT managers say the high attrition rates resulted in organizations experiencing knowledge loss and their current employees struggling to access important information. 

Due to a talent shortage, high attrition, raising wages, and the need for skilled workers, tech leaders are increasingly searching for candidates with a wide range of skills rather than specializations. Many organizations will mitigate the high compensation and challenges of the tech market by sourcing well-rounded talent and expanding the skill set of their existing workforce.

A lot of companies are investing in education and tools to upskill their ambitious employees. It not only fills critical gaps but is an important part of the employee retention strategy. LinkedIn’s 2022 Workplace Learning Report shows it’s one of the top ways to keep employees engaged: 94% of workers claimed they would stay at a company if their employer invested in their learning. 

This desire for more skills has also prompted business executives to focus on skills-based hiring more than qualifications. Because they need to fill vacancies quickly, they’re less interested in candidates’ education or background but are rather keen on the value new hires can bring to the organization. 

With the increasing demand and a shrinking tech labor pool, many companies are turning to the world of freelance to close talent gaps in their organizations. 91% of technology managers stated they face challenges finding skilled IT specialists, and 72% said they plan to hire more contract professionals in 2023. 

In today’s fast-paced environment, companies need IT resources that can adapt to changing demands. IT workers are a costly investment for organizations with fluctuating needs. Contract employees offer them the flexibility to scale up or down based on project requirements and enable companies to allocate their resources. It can be a more economical option that allows them to avoid the costs of full-time employment, such as insurance, benefits, and long-term commitments. 

In addition to cost savings, contract workers can bring the specialized skills and expertise that full-time employees cannot have because of the nature of their roles. Contracted employees can tackle specific projects or challenges that an organization’s in-house team can’t do.

The surge of interest in contract work is also influencing career choices and skill development strategies among IT professionals. Since this model offers a valuable opportunity for diversification and career advancement, contractors can gain practical experience and build versatile skill sets by working on different projects with various organizations. 

While some companies are returning to in-office work, remote work continues to be popular in 2023. It has contributed to the formation of global teams, enabling organizations to expand their tech talent pool beyond geographical boundaries, making it one of the top IT staffing trends in the post-pandemic world. 

Remote work offers companies access to a diverse talent pool that spans the globe, enabling them to hire top tech talent from anywhere in the world by removing location constraints. It opens up opportunities to bring in professionals with different cultural backgrounds, perspectives, and skill sets, enhancing creativity, innovation, and problem-solving within teams.

Not only does global talent provide a critical advantage to companies, but it is also helping them overcome talent shortages. Many regions face talent shortages in specific technology areas, which hamper organizational growth and innovation. For example, Israel is currently experiencing a considerable shortage of cyber experts compelling companies to leverage global talent to prevent and mitigate cyberattacks. 

Automating repetitive and tedious tasks improves productivity and employee experience. With economic uncertainty, productivity and outcomes-based progress become corner-stone issues for most companies. Automation streamlines remote onboarding, workflows, and operations, helping IT professionals focus on outcomes rather than stressing about processes. It also facilitates employee engagement and experience, driving other critical outcomes, such as customer satisfaction. 

Companies can also leverage automation in recruitment, employing AI-driven technologies. It streamlines the hiring process and widens the talent pool as it reduces bias. 

Robotic process automation (RPA) is growing in popularity because it automates many of the recruiting tasks that were previously time intensive. It can execute operations at a bulk scale without too much human intervention. For example, RPA can extract relevant information from resumes and populate it into a structured format. It can analyze CVs for contact information, work experience, education, and skills to eliminate the need for manual data entry and significantly speed up the initial screening process. 

By outsourcing the hiring process to AI, tech companies can automate candidates’ sourcing, screening, categorization, and prioritization to create a pool of qualified IT professionals well-suited for open positions. By using RPA to perform repetitive manual tasks, recruiters can drastically reduce the most time-consuming parts of the hiring process from hours or days to mere minutes.

Developing business applications is a crucial yet slow process. However, companies that are trying to find more ways to leverage the talented people that already work for them, are actively introducing the concept of citizen development. This business initiative allows enterprises to bring non-technical employees into the app delivery ecosystem, where they could use their expertise and insights to speed up and improve the development process.

Citizen developers leverage low-code or no-code development platforms to create software applications and automate business processes without extensive coding knowledge or formal IT training. They play a vital role in digital transformation initiatives. Because they possess domain expertise and firsthand knowledge of business processes, they quickly identify critical opportunities for automation and tailor applications to meet their specific needs. As a result, organizations gain a competitive edge in the market by harnessing this agility and speed during app development.

Since Gen Z, who are true digital natives, and other tech-savvy employees continue to populate the workforce, citizen development will gain more traction. In fact, Gartner’s research found that 41% of employees in low-tech industries, like the government, can be described as business technologists. In technology-intensive sectors, such as energy, that number is closer to 50%.

The increase in tech-savvy employees provides a valuable opportunity for companies to upskill and reskill their human resources. IT teams can create training programs to enhance citizen developers’ technical skills and provide them with fundamental programming concepts, best practices, and security considerations. Improved collaboration between tech professionals and the rest of the employees will help promote a culture of continuous learning, knowledge sharing, and skill development.

Diversity, equity, and inclusion (DEI) are critical to organizational success. These initiatives are transforming how companies and employees approach an equitable work environment. They also create an advantage when attracting IT talent: three in four job seekers said they value workplace diversity when considering working for a company. Organizations that prioritize DEI are seen as progressive, socially responsible, and attractive employers. This positive reputation enhances the company’s appeal to IT professionals, allowing them to attract top talent and strengthen their position in the competitive tech talent market.

Emphasizing DEI is a critical way to attract top talent from underrepresented groups. This broader talent pool allows organizations to tap into a wider range of perspectives, experiences, and skills, fostering innovation and creativity. Research shows that companies that establish inclusive policies and business cultures experience a 59.1% increase in innovation and creativity. 

DEI efforts aim to mitigate the biases in the tech talent market. Organizations are implementing strategies such as blind hiring, structured interviews, and diverse interview panels to reduce unconscious bias and ensure fair evaluation of candidates. Companies can create a more inclusive and equitable hiring process by focusing on merit and skills rather than demographic factors. It will also help them attract diverse talent, enhance innovation, and improve their brand reputation and market position.

Organizations must understand and navigate the IT hiring trends to secure top tech talent and remain competitive. The demand for specific IT skills, the rise of a global workforce, and an emphasis on diversity are just some of the factors that are now shaping talent acquisition strategies. 

As digital transformation continues accelerating, organizations must remain agile, prioritize continuous learning, and create inclusive environments to position themselves as leaders in the competitive IT talent market. Adapting to these trends is essential for attracting and retaining skilled professionals, building a high-quality workforce, driving innovation, and thriving in the rapidly changing technology landscape of 2023

If you’re looking for ways to improve innovation, cut costs, and streamline processes with technology, you don’t have to figure it out alone. Grid Dynamics can facilitate your digital transformation and help you navigate the new world of digitally-native business. Contact us today to discover how our team can help your organization.