Technology Trends and Employment 2020
Kane Partners is engaged in exploring short-term technology and employment trends, reflecting on the volatile and erratic realities fomented by the coronavirus pandemic gripping the nation. Since March, we have seen unemployment rates soar from 3.5% to 11.1% with a real rate of 18%. According to the Conference Board, “the virus’ recent proliferation threatens recent gains and puts the US Labor market’s future in an even more precarious position”.
Attempting to explore impact on Technology Employment requires exploring market sectors across industries. IT is integral to all businesses technology jobs reflecting the broader industry realities.
Some technologies were trending coming into 2020 and continue to be of interest, perhaps heightened, in our “new reality.” Artificial Intelligence, Robotic Process Automation, Machine Learning and Edge Computing were the “hot” areas of investment coming into the year. Perhaps prescient, but these advancements are particularly relevant.
Affected Industries Employment Rates
According to Business Insider, 10 industries suffered the most direct hits.
Hotels lost 42.3% of jobs. While reservation systems and eCommerce are critical, the Hotel Industry is not particularly technology-intensive. The Covid-19 effects on this industry are likely to be long term but not reflect heavily on Technology hiring.
Sport and Performing Arts are another sector that should not have a major impact on the tech market.
Furniture and Home Furnishing stores, losing 46.3% of jobs, not a large employer of high-tech employees
This trend continues with Restaurants and Bars, Motion Picture, Dental Offices, Laundry and Personal Services, Clothing Stores, Amusement Parks and Scenic Travel.
Why the slow rebound in technology industry employment?
According to CompTIA, overall in June, the sector continued to see a decline, losing 5,600 net jobs. Monthly job postings have fallen to 200,000 from 350,000 in February and March and even higher numbers in Q4 2019.
Some industries have notably been busy as a result of the pandemic. Amazon and other eCommerce companies are thriving. Manufacturing companies (led by Northrup Grumman and Stanley Black and Decker), Banks (Bank of America), and Health Insurers (the Blues) saw some of the largest jumps.
What we at Kane Partners have observed is a pull-back on long term and capital investment projects. With a volatile stock market and uncertain economy, larger companies who have been investing for several years can afford to pull back and wait. Smaller companies are struggling to maintain. Start-up ventures, VC and PR backed endeavors in the SaaS and similar spaces have put projects on hold or folded entirely. There seems to be a consensus that these types of jobs will be slow to come back, likely to trail virus trends by several quarters. As wary investors and executives await employment numbers, consumer confidence and spending will rebound.
Impact and Spread of Remote IT Workers
Interesting technology and employment trends to observe is the large number of remote IT workers at firms that typically eschew remote work. In my survey of companies and their quite varied views on the continuation of this trend, some firms have vowed to return to their older culture of little to no remote work. Other firms are seeing that they can broaden their pool for talent, hiring anywhere in the US or the world. Some employees are fleeing the large metropolitan areas either to avoid coronavirus hotspots or work and earn New York or San Francisco wages while living in much more affordable locales. It will be difficult for companies opposed to remote work to buck this trend.
As customer spending returns, we will see the employment numbers in this sector return. Look to Finance, Manufacturing, Insurance and Scientific industries to lead the way and predict the trend elsewhere.
Kane Partners: A Helping Hand
Kane Partners has more than 30 years of Information Technology staffing experience. With clients ranging from the Fortune 10 to bootstrap start-ups, our hallmark has been partnering our clients with a well informed technical recruitment staff who understand nuanced technology requirements, cultural differences amongst hiring companies and a developed affinity and passion for identifying, recruiting, screening and introducing targeted, on point employees for hire. We have always had flexible recruitment models to accommodate varied needs — Contract, Contract-to-Hire, Retained, Contingent and outsourced recruitment models. Having weathered a 1982 recession with 10.8% unemployment, the 2000 downturn and the 2009 10% rate, we know that there are hiring challenges in robust and constricted environments. We are a smaller firm, nimble and agile and adjust to market and hiring firm’s fluid realities.
Technology hiring has been a challenge for several years and we do not see that changing. Talented engineers in traditional development stacks are in high demand. We have been building a network of passive and talented individuals who are career minded and can be presented when a compelling opportunity arises. Branding your company culture is key, and we have advised countless firms on ways to attract the best talent.
Technologies are evolving at a rapid pace. The above-mentioned Artificial Intelligence and Machine Learning knowledge as well as open source and other “hot” skills are in high demand and require a proactive recruitment partner. We have been networking for years with emerging technologists, attending and sponsoring events, mentoring students entering the market and maintaining relationships as their careers progress to ensure our ability to meet growing demand in these arenas.
Finally, with 30+ years in the field, I have an extensive C-Level network. I have sponsored many educational and networking events allowing executives to confer and share their strategies for IT and IT staffing, as well as other competitive moves for their businesses. I am currently surveying Senior executives across a broad spectrum of industries, geographies, and public and private sectors to hear what they are seeing and share this information amongst them. We are hopeful for an improved 3rd quarter for staffing and a banner 4th quarter as companies emerge from the current financial conservatism and begin again to invest in their futures.
Companies looking forward to hiring for replacement, growth, investment or upgrading as 2020 progresses and into 2021 will find an equally challenging experience as before the pandemic started. Intuitively, many hiring authorities assume that with so many people unemployed that they will find a shortened cycle and better pool of talent. Our research does not bear this out.
A variety of reasons create this reality:
- IT professionals have seen less impact than the broader population, with the most heavily impacted businesses not being technology intensive.
- Many professionals have been reluctant to make career moves during a period of economic uncertainty. Tenured employees at stable companies are increasingly wary of taking the perceived risk of a career move.
- The challenges that the pandemic impose on the hiring process are not insignificant.
- People do not wish to travel. Whether it is a relocation situation or even with local hiring, the work-from-home employee may not wish to travel to your locale for interview purposes.
- Video interviews are less persuasive and personal than being in-person. Most prospective employees AND hiring managers prefer in-person interviews that enable people to better sense personality and cultural fit. Videos also inhibit true group/team interactions.
Understanding that as an employer potential new hires need a compelling reason to join your team during this time, it is imperative to begin the process early and to engage with an experienced recruiter to help manage the process and bring passive talent to the table. As you look at your growth and anticipated workload for the coming 3, 6 and 12 month period, embrace that now is the time to act. Technology and employment trends continue to evolve, but we have an early glimpse at what the next several months may bring.