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Experts agree: Demand for software engineers remains high in 2023

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From the outside, the landscape of technical hiring today can look bleak. Layoffs at big tech firms have garnered significant media attention, and many other companies have slowed their hiring in response to an uncertain economic climate. We were surprised, then, to hear from business leaders across the US that demand—even competition—for technical talent remains high for many employers.

In January 2023, we surveyed industry leaders to learn more about pain points in technical recruiting today. What we found were challenges on both the supply and demand sides of the job market. In this article we’ll dig into four major engineer recruiting challenges and how to overcome them.

1. Finding qualified candidates (especially for specialized roles)

Nearly every expert we surveyed cited the small supply of truly qualified candidates as technical hiring’s primary challenge. By their very nature, technical roles require foundational knowledge and skills in computer programming that most people do not have. With companies often looking to hire for specialized positions, sometimes even technical generalists don’t make the cut. According to one senior leader at NOVOPATH, Dayna Carlin, “Data scientists, DevOps professionals, and cybersecurity experts are just a few of the crucial tech talents that are in short supply.”

Even companies that manage to identify a reliable pipeline of candidates encounter challenges in vetting prospective hires. Darren Shafae, Founder of ResumeBlaze, said, “Technical roles vary significantly, which means employers must be clear about the skill sets and qualifications they are looking for in their employees. Employers should be sure to go beyond job titles, exploring the specific technologies and capabilities their teams need to succeed.”

After defining a clear scope for a job, companies also need to assess whether a candidate is a fit. Sunil Bhuyan, Founder and CEO of Techieinsider, shared, “Accurately determining a person’s skills when it comes to tech recruiting is a major issue today. Many candidates are given tests and evaluations that are not relevant to the field at all.” Poorly designed technical interviews and assessments waste both employers’ and candidates’ time without providing the signal employers need to make an informed hiring decision.

2. Adapting to continuously changing technologies

“Technology changes so rapidly that it’s difficult to keep up with what’s new in the industry,” said Logan Young of allthedifferences.com. As far as recruiting goes, new technologies often create entirely new technical roles. Titles like ML Engineer or iOS Developer were non-existent not too long ago, and now they’re integral to many companies.

Simon Bacher, CEO and Co-Founder of Simya Solutions, said, “There are no fixed requirements for hiring technical talent, as technology is being updated every day. It’s difficult for companies to predict what kind of technological disruption awaits them on the other end.” The qualifications a company seeks out will likely change over time as a company’s needs shift. Maybe a company doesn’t need virtual reality developers today, but if VR suddenly booms in popularity, building out a team when other companies are trying to do the same isn’t easy. Ideally, existing employees are highly adaptable to the latest technological trends.

Moreover, decision makers in the hiring process need to be technically literate and up to date, or else changing technology puts firms at risk of making bad hires. Hilda Wong, Founder of Content Dog, said, “When judging developers, having technical expertise is crucial, and lacking it frequently results in lower standards. Even major firms’ HR departments might not have the necessary technical knowledge to assess developers—they frequently fall back on simple keyword matching.” 

3. Competing for top technical talent

High demand further contributes to a challenging job market for companies. Jeff Romero, Founder of Octiv Digital, pointed to the rise in remote work as a driving force, since companies from around the world can access many of the same candidates. Another founder, Ninh Tran, identified yet another source of competition: “As modern technology spreads to other organizations, technical skills are becoming so sought-out outside of the technology industry—this has created competition with big tech companies.”

The demand for technical hires pushes companies to compete with enticing compensation packages and other benefits. Megan Young, of MCS Rental Software, said, “Getting known as an attractive place to work is crucial. A part of this includes emphasizing the value of pursuing higher positions of responsibility, working with cutting-edge technology, and taking advantage of ongoing educational opportunities. Candidates’ final decisions might also be influenced by perks like flexible scheduling, higher superannuation contributions, and performance-based incentives.” Paying well isn’t sufficient to attract employees; the most desirable workplaces offer a range of other reasons to join.

Several experts commented on diversity as a key factor in establishing a strong company brand. CEO of Plumbing Navigator, Nathan Sanders, shared, “The best candidates want to work for companies that are known for their conducive work environments and vibrant work cultures. They also want to work for brands where diversity is embraced and prioritized.” On the flip side, companies that fail to promote diversity and inclusion are likely to suffer in hiring. Arthur Worsley, Founder of The Art of Living, said, “Employers with a lack of ethnic and gender diversity will continue to be shunned by talented tech candidates this year. A majority of the top tech talent are millennials and Gen Z professionals who want to work in companies that celebrate and protect diversity.”

4. Retaining great employees

Hiring takes up a lot of resources, so it’s costly and  damaging if companies fail to retain talent after investing so much in employees. John Willis, founder of Convertfree, explained, “Candidates keep switching between companies and jobs in order to get a higher salary… Regular shifts in employment reduce overall performance.” Unfortunately for tech companies, it’s often the default for employees to move every few years.

As Willis alluded to, employee churn has a cascading effect on company performance. Christen Costa, CEO of Gadget Review, said, “Companies are struggling to recruit and vet candidates fast enough to cover the gaps in their teams, which puts stress on current employees. That stress can sometimes lead to high employee dissatisfaction, which can then lead to more vacancies.” The negative feedback loop of employee departures makes early investments in employee retention crucial to a firm’s long-term health.

Related to the issue of poor retention, candidates reneging on job offers is a similar waste of company resources. Travis Lindemoen, Managing Director of Nexus IT Group, used the phrase “valley of death” to describe “the time between when a tech candidate accepts your offer and actually starts.” Between retention packages from an existing employer or competing offers from other companies, there are all kinds of ways that onboarding a new hire might be disrupted.

CodeSignal addresses many of today’s engineer hiring challenges

Companies that fail to hire engineers and developers efficiently or worse yet, make bad hires, end up wasting lots of resources trying to grow their team. As one co-founder, Christian Velitchkov, shared with us, recruiting can put a strain on a company’s bandwidth to the point that product development suffers.

The demand for technical talent is likely to continue increasing, and it seems that the supply of qualified candidates will be playing catch up for the foreseeable future. Given these market conditions, employers need to do everything they can to overcome hiring challenges that are under their control. This includes prioritizing diversity, clearly defining job scopes, accurately assessing candidates’ skills, and staying up to date with the latest technologies.

CodeSignal offers several technical recruiting solutions that can help companies achieve these objectives. With resources like expert-backed Skills Evaluation Frameworks and an industry-leading development environment, CodeSignal enables hiring according to job-relevant standards and reduces bias in the hiring process. With support for a number of technical roles, including software engineering, data science, and more, CodeSignal customers can grow their specialized technical teams. To learn more, request a discovery call today.

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