2020 has proven to be a momentous year for many reasons and not in a good way. COVID-19 has wreaked havoc across the global commercial landscape. Hospitality, automotive, and many service-based industries have borne the greatest brunt of the ensuing economic fallout.
However, all industries haven’t experienced the effects of the recession in the same way. The software engineering and development workforce spans across industries and has been affected uniquely by the ongoing pandemic.
In this blog post, we will shed light on how COVID-19 has impacted the software engineering workforce globally and within the US market by answering some critical questions.
Among the survey respondents, software engineers experienced a 5% job loss. Also, 48% of all the surveyed professionals showed concern about job security. On the other hand, only 31% of software engineers highlighted the issue of job security.
It is important to highlight here that the above software engineering job respondent data is taken from across the industrial spectrum. Engineers and developers working in different sectors may likely face contrasting situations. For instance, software engineers and developers working in the hospitality industry have to experience pay cuts and layoffs.
On the other hand, engineers and developers working on the security side have experienced growth. Their services and products have been in more demand in the last couple of months as workspaces worldwide have become more dependent on technology. In the US alone, the demand for cybersecurity professionals has surged by 65% since April.
All those who keep a finger on the industry’s pulse are sensing that remote working will become a norm in software engineering and various other service-based work spheres. Contrary to what many people were initially expecting, most software engineering talent has effectively adapted to the work-from-home routine. Some tech industries have even experienced a productivity hike with their teams working remotely.
These unexpected positive trends have pushed many software companies to continue with remote working regimen until a vaccine is fully available (that could still take up to a year). Some big tech companies like Facebook, Twitter, and Square are even thinking to go beyond and make it a permanent element of their work culture.
Experts believe that the prevalence of high-speed internet, easy availability of video conferencing tools, and digital project and task boards have ruled out most reasons for software engineers and developers to not work from home or any remote location.
Instead of geographical regions, we would like to discuss the software engineering market and talent demand in large private and public sectors they serve. The global market survey in this regard draws an interesting picture.
● 1 out of 4 decision-makers from the education sector indicates that they have increased their software outlays during the pandemic.
● More companies are spending less on software in the financial services and accounting landscape than those that have raised this expenditure.
● Most IT companies have not changed their software expenses.
● The marketing and advertising sector is also spending less on software assets.
● Most of the medical and healthcare industry is also keeping up with its existing software outlays and overheads.
Overall, this spending trend highlights one crucial thing: more businesses across the spectrum, regardless of their geographical location, will bank more on third-party software development expertise instead of building their in-house teams.
While software engineers and development experts are facing a lesser risk of layoffs, the hiring trend of these professionals hasn’t been encouraging for the last six months. This might be because companies are looking at more flexible staffing models and more inclined to use nearshore and offshore human resources. Indeed is one of the largest job hunting portals worldwide. It has mined the data on its listings to determine how different sectors and talent pools have been faring since the onset of COVID-19. Its report suggests that software development job listings have experienced over one-third decline in the last six months.
We think how tech giants have fared in the mainland US reflect the software engineers’ hiring trends in nearshore and overseas markets as well. The big five tech companies Facebook, Amazon, Apple, Google, and Netflix, have cut down their new software engineer postings. These companies have registered a 21%, 29%, 19%, 35%, and 33% decline respectively.
From the above figures, one can easily deduce that the hiring of the global engineering talent pool has been hit quite hard by the pandemic. However, some industries are still increasing their expenditure on software and development amid the cross-industry hiring decline. Instead of hiring full-time engineers, they are relying on third-party nearshore and overseas development teams.
COVID-19 has made it pretty challenging to devise an outlook and forecast what the future holds.However, the ongoing trends suggest that companies across the spectrum will remain cautious in hiring new developer talent moving into 2021. There will be exceptions. For instance, software developers working on security and communication products, ed-tech, and industries that support the digital transformation related to the increased work from home trends will continue to enjoy more demand from the collective talent pool.
Another trend that will keep on growing through the next year is outsourcing. NTT has published a global managed service report for the year 2020. It also talks about the trends for the next 18 months related to IT in general and software development in particular. The report includes an important survey conducted among over 1,200 executives across 29 countries. As per that survey, nearly 45% of companies will outsource software development work instead of taking on in-house IT challenges amid the uncertain times caused by the pandemic.
In short, less hiring and more outsourcing will remain the mantra for the global software engineering market in the next year. People who have just entered the software engineering talent pool have better prospects of getting a job in enterprises that offer third-party software development services to businesses in every industry and sector.