2023: The Year That Was the Aftermath of the COVID Tech Boom

As I prepare to head off for my holidays and decompress from the year, I thought I’d get my thoughts down to share what we’ve seen on the ground, on what was a year to remember.

I’ll touch on salaries, return to office (trigger warning, for the remote workers), the struggle of jobseekers, and my experience as a software engineering recruiter in 2023, as well as some general trends and changes within the market for tech hiring.

Job seekers 

2023 was a humbling year for anyone looking for a job. Proactivity has become everything in a job search. Gone are the days when an engineer could just wait for their phone to ring with offers of interviews (and the inevitable pay rise). This year, highly skilled people became baffled when they didn't hear back from applications, soon learning it’s about proactive reach-out, both on and offline - old colleagues, hiring managers (via LinkedIn ads) or with Talent Acquisition teams - successful job seekers, had to hustle their way through. 

The biggest challenge any job seeker faced was the sheer noise in the market. A CV application has become a needle in a haystack. This doesn't mean there is a heap of people suitable for the role, but the challenge has been getting seen or heard amongst all this noise.

This gave companies more time to make decisions and less FOMO in their recruitment process. 

That said, highly skilled technical people bucked the trend, those at the top of their game, could still afford to be selective. Especially those with a strong network of connections would frequently find themselves able to snap up multiple offers without compromising on pay.  

Leadership and the Rise of the Staff Engineer

2023 was a tough year for engineering leaders. Throughout the growth of 2020 - 2022, companies needed more of their people to lead teams and support the growth of new products. In the return to delivery, there became a glut of engineering leaders in a market that was no longer growing, and many companies, unfortunately, laid off some highly talented people. Those who were in the earlier stages of management often reintroduced their technical skills into their facet of skills.

Engineering leaders turned to delivery, and interestingly, we saw a similar trend in the Product space, with Product Managers & Owners, starting to look at delivery-focused roles.

Throughout the past 5 or so years, there has been a rather unhelpful trend, which accentuates the demand to hire those with more experienced skillsets over hiring those with great potential. This year, as companies consolidated and grappled with architecture and platform challenges, we saw a rise & in demand of the Staff Engineer. Management teams wanted people who could deliver, but also take technical ownership and accountability.

Salaries

This year I have empathy for managers and leaders at rem review time.

You see, here's the thing, the cost of living has soared, combine that with the normalisation of two years of salary growth (running at 20%), and it becomes reasonable for engineers to expect a pay bump.

But the fact on the ground is;

1. Companies' profit margins have been shrinking, and
2. Simply put, the supply/demand for technical skills has rapidly shifted, it's become a hirers market. This won't last forever, but we live in a capitalist economy, so for now salaries have stopped growing, and in some areas gone into negative growth.

Remote working

Whether you like it or not, there is a trend.

But, here's the thing, Australia is different...

It is still rare for me to hear about anything more than 3 days a week in the office being asked of people, that said, companies are trying...

Australia is a country that has wholeheartedly embraced the idea of work-life balance, it is ingrained within our work culture. Any company that opens an office here and tries to adopt a New York, or London work style approach, has significant challenge hiring, no matter how much they're prepared to pay.

Furthermore, the fundamental difference in Australia is that our Tech hiring is largely driven by Atlassian and Canva, (my estimates would say 7/10 engineering hires in Sydney are into either of these two companies), and whilst these two companies embrace a "work from anywhere" approach, there will still be a market for remote, and hybrid workers.

Last week, I asked a tech company CEO about his predictions for remote working in 2024. His answer was both simple and intriguing:

"It depends on whether their CEOs are millennials."

This perspective was new to me, but it aligns with the idea that human psychology shapes our decision-making based on past experiences. Hypothetically, it is reasonable to understand why a CEO who has spent decades in an office is likely to equate professional success and productivity with a traditional office setting.

This notion also explains a KPMG study, where 66% of CEOs anticipated a full return to the office by 2026. Interestingly, the study involved CEOs from companies with annual revenues over $500 million, including a third with revenues exceeding $10 billion. Given these figures, it's plausible to assume that the majority of these CEOs are not millennials.

Oh, and in 2023, AI became every conversation.

So what’s in store for 2024?

Looking on a macroeconomic level, it's probably safe to assume that the worst is behind us, though a return to growth could still take us some time. Persistent inflation means interest rates are likely to stay high.

The positive signs are, that most big restructures seem to be behind us. If you look at the data, tech layoffs are solidly trending downwards, so it’s probably fair to say the correction has happened, and now we need to get used to this new normal.

My prediction is, that at least in the first half of the year we will see more of the same, but let’s settle in, we can use this as a valuable opportunity. It's a time to improve, be better, and develop our skills to become more capable than before.

Bring on 2024!

Thoughts, opinions, questions? Let me know in the comments below.