Advice for Tech Workers to Navigate the Most Heated Job Market of All Time
Advice for Tech Workers to Navigate the Most Heated Job Market of All TimeThe job market is on fire across the globe. Here's advice on how to make the most out of it.This is a supplement to this week’s 🔒 subscriber-only-post 🔒 The Perfect Storm Causing an Insane Tech Hiring Market: Advice for Hiring Managers, which post covers:
Subscribe here to read the full post. Now onwards with context on the market and advice on how to make the most from the current environment, as someone working in tech. The Tech Job Market is On FireIf you are someone with a few years of industry experience in tech: the job market is heated across the globe, more so than during the Dotcom Boom. This is especially true for software engineers, but demand for other tech functions is also rapidly rising. I talked with dozens of hiring managers - from engineering managers to CTOs and CEOs - and they all shared the same perspective. Here is a typical quote from an executive at a global tech company:
This piece covers advice for tech workers to make the most out of this heated market: whether you want to make a job change or not. A market where demand for employees outstrips supply is one where employees can do well for themselves with less-than-usual effort. Differences to the Dotcom BoomThe most common comparison of today’s insane tech market is to that of the Dotcom Boom. This was a time when demand for software developers spiked, as a large amount of capital entered the market. However, I would argue that the Dotcom Boom was different in several ways. 1. Root cause. The Dotcom Boom was caused by excessive speculation from some groups on the growth and impact on the internet - and the bubble burst when it became clear that this growth was not there. In contrast, the demand curve is caused by all parts of the industry, because companies know they need to invest more in tech for the coming decade. The root cause of the Dotcom Boom was hype: the current demand curve is caused by global demand. This also means it’s unlikely we’ll see a bubble burst, similar to the Dotcom Boom. 2. Impact. The Dotcom Boom impacted the US much more heavily than most other countries. It also impacted a lot fewer people: simply because the tech industry was smaller. In comparison, today’s hiring situation impacts all regions across the globe - and will do so for the foreseeable future. 3. Juniors. Another important distinction was how juniors were hired in droves during the Dotcom Boom. People with no experience were snatched up on the market, thrown into teams where they learned on the job. This aspect is completely missing from today. People with no experience are struggling to find positions and remote is a root cause. Breaking into the industry with a non-traditional background is becoming increasingly more challenging. 4. Remote. The hiring frenzy of 2021 also goes beyond the demand for software engineers skyrocketing. It goes hand-in-hand with the rapid rise of remote work, which brings global competition to every company’s footsteps as many employees are a Zoom interview away from switching jobs. 5. Proven business models and sizeable revenue for most companies. Tech is no longer a vision hype phase with the exception of a few markets such as crypto. The majority of companies are scaling up rapidly, expecting their investment in tech to pay off with high certainty. During the Dotcom Boom, there was no such certainty. 6. More emphasis on total compensation packages over stock upsides. Candidates are evaluating compensation packages at current valuations for the first year. For example, Stripe, Lyft and Instacart have moved to one-year stock grants with a fixed value, over multi-year grants with potential upside. During the Dotcom Boom, most of the emphasis was on stock upsides after a rapid public market offering. Advice for Tech Workers with ExperienceWelcome to the best tech job market of probably all-time - assuming you have a few years of industry experience under your belt. Now is a perfect time to turn this employee’s market to your advantage. Optimize for your happiness. Write down what are “must-haves” in your next position. In the current market, there is a good chance you won’t need to compromise. Be clear on tradeoffs you are comfortable with. Whether it’s the mission, the compensation, the industry, or career growth that is more important for you: you’ll find more options that can match this, and are hiring, than before. Clarify things like working hours, availability expectations, holidays, meeting culture and things that can mean different things across companies. For some people, it may not be a good tradeoff to sacrifice personal life boundaries for higher compensation. You can still earn a lot without those compromises. If you’re unhappy with your current situation, now is a good time to do something about it. If the source of your unhappiness is non-financial: time to ask for changes. If things don’t change, you can always look around. If your source of unhappiness is financial: now is a good time to inquire if the company plans to make compensation adjustments - perhaps by showing them this report. If it’s not planned: it’s never been a better time to get a higher offer. If you’re unhappy with your compensation: raise this, but also look around on the market. If you’re happy with your current situation, keep in mind that there might be people around you who are not happy: and if they leave, this can impact you. Examples that can hit you could be a key member on the team leaving, or your manager quitting. I would suggest talking with your manager chain and confirm their plans on retaining people, and keep up with the market. People leaving around you can also open up more opportunities. However, do make sure that you get recognized for stepping up, and clarify what changes you should expect if successfully stepping up: from compensation increases to promotions. Negotiate hard if you have an offer: this is the best advice in this market. Depending on the type of offer you get, there are multiple things you can negotiate on:
Leverage is something that you’ll want to have to negotiate. In the past, this could have been another offer or your current compensation. In this heated market, it’s enough leverage to tell the company that you’re considering interviewing with other ones: but you’re ready to sign for an increase in the package. For more advice, see this video on negotiation advice for software engineers I recorded. The more senior you are - the more demand there is in the tech market for your skills as every company - from seed-stage startups through enterprises to Big Tech - is building out new teams, and scaling up their operations. The most difficult people to hire are always the senior engineering leaders. With more seniority, the risk of moving jobs also goes up. However, in the current - insanely hot - market, the upside can be higher than most people expect. It can be a good time to either take a risk, or to secure more of the upside at your current company. Advice for Junior Tech WorkersUnfortunately, it is not a hot market for everyone in tech. Juniors - people with little to no professional experience - are struggling to find positions. The compensation for juniors has not increased during this tech hiring frenzy across most of tech. This is confirmed through both anecdotal sources, and the compensation data from Djinni - the largest tech marketplace in Ukraine - shows the same: Remote work is the main root cause for juniors not experiencing a heated market. Companies want to hire seniors, because they don’t know how to onboard and train juniors in a fully remote setting. Working in the office this was less of a problem, as juniors had access to the team the whole day. They got mentorship and guidance most of the day, and picked up speed much quicker. Teams and companies will have to find ways to hire and onboard more juniors. If you’re a hiring manager, I suggest biting the bullet and starting to hire and onboard people with little experience. An engineering director at a full-remote startup shared:
More juniors on to the market is a secondary cause. More and more people are realizing how tech offers an attractive, and high-paying career. Bootcamps are signing up students, promising that with little time and money investment, anyone can become a highly paid engineer. At the same time, a large portion of new grads - both from universities and bootcamps - are struggling to get their first job. My advice for juniors on the market - people with less than a few years' industry experience - is this:
How Long Will This Employee's Market Last?The market is hot for tech workers with experience. But how long will it last? Most of the root causes for the heated hiring market are longer-term forces. However, with lockdowns easing and hybrid work becoming more of a norm, more companies are expected to hire juniors, removing the drive to overpay for senior talent. Also, the pent-up demand from 2020 is unlikely to repeat for 2022. I expect this heated market to last until early 2022, and things get slowly back to how they were before Covid-19. There will still be great career opportunities for senior engineers, but fewer overall positions and less crazy compensation packages. More juniors hired overall, though still competitive to get a job with no experience. By then, the market will have moved up for compensation ranges, and I don't expect salaries to go down as long as the demand for tech keeps growing, as software eats all industries. You’re on the free list for The Pragmatic Engineer. For the full experience, become a paying subscriber. You’ll receive weekly issues and have access to subsriber-only additional resources for engineering managers and engineers. Many readers expense this newsletter within their company’s education/learning and development budget. |
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