Software Development and the Pandemic

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Software Development and the Pandemic

Key Takeaways

  • In spite of Covid-19, the software developer market demanded pay rises in 2020 and 2021. However, the increases were lower than the pre-pandemic level of 3%.
  • There is a growing demand for software engineering specialists, machine learning engineers, and back-end developers across a range of industries.
  • Job growth for software developers is expected to grow by 22% during 2019-2029.

Introduction

Insights related to the impact of covid-19 on salaries, job position changes, and market challenges related to the software developer job market has been presented below.

Impact of Covid-19 on Software Developer Salaries

  • According to software solutions provider Number8, even for industries struggling through the pandemic, pay rises will be required to keep the best employees. It states that based on survey findings, employee raises in 2021 had been predicted to be around 2.8%, slightly higher than the increase of 2.5-2.7% in 2020. However, these figures are lower than pre-pandemmic levels, with average pay rises of 3%.
  • Infoworld confirms the above and states that while most estimates had predicted that tech salaries will remain flat in 2021, software developer salaries were expected to show a slightly higher growth in 2021. In the US, general developer roles had a forecasted average of $118,250-$138,000 in 2021, down slightly from the 2020 range of $120,750-$143,000. In the UK, developer salaries averaged £39,500-£55,000 in 2020, with a slight increase of £42,000-£57,000 in 2021.
  • While the pandemic caused volatility in most sectors, software developer jobs have fared well due to increased demand with the shift to remote working.

Changes in the Availability of Software Development Positions

  • Inforworld has reported that according to data from LinkedIn, in the US, the demand for software developer roles such as web developers, full-stack developers, and cloud engineers grew nearly 25% during 2019-2020. Demand for machine learning engineers and artificial intelligence specialists has risen by 32% over the same period.
  • A senior director at LinkedIn has noted that that technology roles have proven to be pandemic-proof and that there is a growing demand for software engineering specialists, machine learning engineers, and back-end developers across a range of industries.
  • While the demand for expertise with established languages like Java and JavaScript remains strong, the popularity of modern programming languages such as Go, Rust, and Dart has sharply risen during the past few years. Nevertheless, Java remains the second most in-demand skill for employers, behind SQL. Python is the third-most sought after skill, with experienced developers earning $91,000, compared to $75,000 for a Java developer.
  • On the back-end, containers and cloud are the most in-demand skills. The most attractive skill set is proficiency with the Amazon Web Services (AWS) cloud stack, ideally with Docker and Kubernetes expertise.

Market Challenges in the Software Development Industry

  • As of 2019, there were 500,000 software developer jobs available in the market in the US, with 500,000 expected to retire within the next few years. This would result in a shortage of 1 million jobs. It was estimated that by 2021, there would be a shortage of 1.4 million software developers and only 400,000 graduates in the field.
  • The market for software developers was projected to grow by 21% during 2018-2018, much faster than all other occupations. A shortage of software engineers worldwide means their average salaries will keep increasing and companies would be required to provide more lucrative offers to attract and retain talent. The market will continue to produce average workers who demand higher wages.
  • According to Daxx, "the overwhelming developer shortage has resulted in the growth of software developer salaries and transformed IT into the best-compensated sector. The median computer programmer salary in the US is more than $100K a year, which in some states is two times larger than the average regional pay."
  • It has been estimated that The US is at the risk of losing an output of $162 billion if the country's software developer shortage keeps growing at the same pace. New talent will be required for business development and technology transformation, further intensifying the supply demand gap.
  • In addition, staff turnover in the US IT industry is at 13.2%, the highest of all industries. A company may spend 8-12 weeks or longer when hiring a specialized team of software developers. This is an additional financial burden for the company, on top of internal delays.
  • Hiring managers are faced with other challenges when recruiting software developers. These include: the shortlisted software developers often don’t have enough experience, they don’t have all the technical skills needed for the job, they are lacking in soft skills, lack of formal education, and unreasonable salary demands.
RESEARCH STRATEGY

While we were able to find most of the requested information through IT industry sources, recruitment agency publications, and general media sources related to software developers, there was insufficient information to provide an in-depth overview of market pressures. Especially in identifying the force exerting pressure and the forecast for 2022. Hence, we pivoted to providing insights into challenges faced in the software development job market and their impact on firms and/or the economy. In addition, there was limited information on the expected job positions for 2022 and we provided the most recent data on the demand for different software developer skills as available.

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