Tech Hiring in 2024: Demand for IT Talent in the US

The United States has always been a hotspot for technological advancement and innovation. Last year’s economic recession had a global impact, even reaching the US. The downturn greatly impacted the job market, leading to layoffs in large technology companies and smaller startups.

How did this situation impact the job market and demand for IT talent in the US in 2023? What might be the impact of this situation in 2024?

This report examines the tech industry’s current status, focusing on talent needs and hiring approaches. It can help companies with tech hiring by advising on finding, attracting, and keeping the best IT employees.

We will explore trends in the US tech job market and discuss the demand for talent in the country. How does this demand compare state to state and city to city? What IT skills are in most demand? And how can companies meet the demand for IT talent in 2024?

Report Overview

1. Overview of Tech Hiring in the US in 2024
   • – Market Trends Overview
   • – How do companies meet the increasing hiring demands?
2. Demand For IT Hiring in the US
   • – Best States For Tech Jobs in 2023
   • – Best Cities For Tech Jobs in 2023
   • – Tech Skills in Demand in the US
   • – Type of Positions in High Demand in Software Development
3. State of Hiring in 2024
4. Challenges in Recruiting Tech Talent  in 2024
5. Conclusion: Outlook on Demand for IT Talent in the US

Overview of Tech Hiring in the US in 2024

The demand for IT professionals in the United States remains high with 55% of U.S. hiring managers planning to add to IT staff in the first quarter of 2024. Additionally, 66% of hiring managers surveyed by Experis, need help finding talent with the right skills.

IT hiring demands in the US for 2023 and projections for 2024 reveal significant insights into the evolving tech employment landscape. The data illustrates a steady demand for IT professionals and an escalating need as we move into 2024.

Market Trends Overview

According to CompTIA, the demand for IT staff by companies in the US is on an upward trajectory, rising from 52% in Q1 2023 to an expected 61% by Q4 2024, indicating a strong recovery and growth phase in the tech sector despite a minor dip in Q2 2023, possibly due to seasonal adjustments. This growth is fueled by ongoing technological advancements, digital transformation, and increasing reliance on tech across industries. This indicates that the growth in demand for IT talent is increasing and indeed very promising.

Key Takeaways

• – The rising demand in IT hiring trends emphasizes the importance for businesses to attract top tech talent for a competitive edge, requiring enhanced recruitment strategies. 
• – Companies must present themselves distinctively with attractive career development opportunities, flexible work settings, and competitive pay.
• – By adopting comprehensive talent management strategies such as developing and retaining existing employees, businesses can navigate the challenges posed by the competitive tech hiring landscape and capitalize on the opportunities it presents.

How do companies meet the increasing hiring demands?

As straightforward as that may sound, we all know that top IT talents are an elusive rarity on the job market, difficult to spot, and even harder to attract. So, where do they find them? According to Coderpad’s survey of 5500 recruiters from 143 countries, many companies are looking abroad for tech talent. In 2022, 40% of recruiters said that they hire internationally. That number has risen to 51% in 2024. 

Still, that begs the question: Where do you find international talent? Turns out, recruitment sites are rapidly gaining importance. In another survey, employers and job seekers alike say they utilize recruitment sites even more than company pages and employee referrals. 58% of hiring decision-makers use recruitment sites as the top sources for finding qualified talent and 48% of job seekers conduct in-depth research into new opportunities (MIT Sloan Review “Hiring Trends in 2024”). 

Key Takeaways

• – The pace of hiring in 2024 is slightly more ambitious than in previous years, with over half of hiring companies looking to source international talent. 
• – The availability of top local IT talent is increasingly limited compared to the rate of demand for them
• – Hiring managers and job seekers have found recruitment sites to be the most efficient way to find top global talent and job opportunities respectively. They are increasingly exploring this channel.

Demand for IT Talent in the US

Throughout 2023, the demand for IT talent across the US shows significant growth, with California, Texas, and New York leading in tech job markets. While California dominates in net tech employment and job additions, indicating its major tech hub status, states like Utah and Tennessee showcase rapid growth, signaling new tech hub developments. The broad expansion of tech opportunities across the US, including states and cities not traditionally considered tech-centric, offers diverse opportunities for job seekers. Major cities like New York City and San Francisco continue to lead in net tech employment and job additions, while Austin emerges with the highest city growth rate. The tech sector’s evolution is marked by a high demand for emerging tech skills. This shows the sector’s vital role in business transformation on the one hand and the need for professionals to continuously develop their skills on the other. The big question is – what are the best places to find IT Talent in the US? As we compare the demand for talent across the top 25 states and cities in the US, we will consider the following factors; net tech employment (consisting of the number of tech professionals employed across every industry sector in the US economy and business professionals employed in the tech sector), added jobs (indicated by new job posting by organizations due to expansion or to support emerging technologies), and growth rate (measured by the net new job gains in the state or city relative to the net tech employment in that state or city).

Best States for Tech Jobs in 2023

Unsurprisingly, California leads in both net tech employment (1,529,698) and the number of added jobs (41,834) in 2023, underscoring its position as a major tech hub in the US. Texas follows with significant growth, highlighting its rising prominence in the tech industry. New York and Florida also show strong tech employment figures, contributing to the diverse geographical distribution of tech jobs across the country. States like Utah, Tennessee, and Oregon demonstrate notable job additions relative to their overall tech employment numbers, indicating rapid growth in these areas.

However, Wyoming leads the chart with the highest growth rate at 5.1%, followed closely by Utah at 4.9% and Tennessee and Nevada at 4.8%. Texas and California take the backseat when it comes to growth rate, with New York not even making the top 25.

Key Takeaways

• – While California remains a tech powerhouse, significant employment and job growth are spread across the US, indicating a broadening of the tech landscape. The data suggests that job seekers in the tech industry have increasing opportunities in states that may not have been previously considered tech-centric, offering a wider range of living and working environments. For example, states like Texas, North Carolina, and Colorado are emerging as significant tech employment centers, suggesting a shift towards a more nationally dispersed tech sector.
• – The distribution of growth rates shows a broad-based expansion of the tech sector across the US, with states from every region contributing to the growth, for example, states traditionally not recognized as tech hubs, like Wyoming and South Dakota, are showing significant growth, indicating the expansion of tech jobs beyond the coastal tech centers. Rapid job additions in states like Utah and Tennessee could signal the development of new tech hubs, driven by favorable business climates, investment in education, and quality of life factors.
• – Despite the emergence of new tech hubs, established centers like Texas, Washington, and Georgia continue to see strong growth, reinforcing their positions in the tech landscape.

Best Cities for Tech Jobs in 2023

In contrast to its state taking third place among the best states for tech jobs in 2023, New York City leads with the highest net tech employment at 571,520. San Francisco records the highest number of added jobs (14,587) in 2023, highlighting rapid growth despite having a lower tech employment number than New York City and Los Angeles. San Jose, known as Silicon Valley’s heart, continues its tech growth with 9,551 new jobs, underscoring its role as a global innovation center. Dallas and Seattle also show strong job additions, with 12,680 and 10,431 new jobs, respectively, indicating their emerging prominence in the tech landscape. Chicago, despite being a large city, shows a relatively modest increase of 2,128 jobs, suggesting slower growth compared to other major cities.

The chart below highlights the growth rates for tech jobs in US cities in 2023 with Austin leading the pack with the highest growth rate at 5.6%, underscoring its reputation as a booming tech hub. Salt Lake City, Nashville, and Las Vegas share the second spot with a 4.5% growth rate, indicating significant tech sector expansions in these cities. Despite the high cost of living and operation, San Francisco remains a strong contender in the tech industry with a 4.2% growth rate. Charleston and Denver show robust growth rates of 4% and 3.9%, respectively, highlighting their emerging status as attractive destinations for tech companies and professionals. Major tech centers like Dallas, Seattle, and San Jose also feature on the list, showcasing continued growth and investment in these established markets. New York City, despite its massive base of tech employment, has a growth rate of 2.3%, reflecting a slower pace compared to smaller, emerging tech cities.

Key Takeaways

• – Beyond the traditional strongholds (Silicon Valley and NYC), cities like Dallas, Seattle, and Austin are rapidly growing their tech workforce, suggesting the rise of new tech hubs. The presence of cities like Denver, Charlotte, and Indianapolis suggests that tech job opportunities are increasingly available outside the traditional coastal tech hubs.
• – San Francisco and San Jose’s high job addition numbers reflect the ongoing innovation and investment in these areas, maintaining their status as leading tech employment centers.
• – The differences in these cities indicate the varying growth rates and potential market dynamics that affect these cities, such as local economic policies, cost of living, and availability of skilled professionals. Cities like Austin, Nashville, and Salt Lake City are gaining prominence, likely due to factors such as favorable business climates, lower cost of living, and growing tech ecosystems.
• – Larger cities like New York and Houston show slower growth rates, possibly due to saturation and high costs, but they continue to add tech jobs due to their vast economies and diverse industries.

Tech Skills in Demand in the US

Based on CompTIA’s State of Tech Workforce 2023 report, tech jobs were estimated in 2023 to reach 5.8 million workers. Since 2017, more than 680,000 new tech occupation jobs have been added, with an annual growth rate of 3.4%, a function of the demand for tech talent across every industry sector in the economy. The question is, what IT skills are in demand? According to the report, the IT services/custom software services sector has been the growth engine for the greatest number of states in the US over the past year. Software roles lead with the highest number of positions at 2,189,319, underscoring the critical role of software development and maintenance in the tech industry. Other skills in demand for IT include IT support specialists, Cybersecurity and Systems engineers, Network engineers, Emerging tech and others, Database and Data scientists, and CIOs and IT managers. 

Key Takeaways

• – The high number of software-related jobs reflects the ongoing demand for new applications, systems, and software solutions across all industries.
• – The substantial numbers in IT support and cybersecurity jobs underscore the increasing focus on digital security and the need for continuous support and maintenance.
• – The “Emerging Tech and Other” category suggests that industries are investing in new technologies like AI, blockchain, and IoT, which could reshape the tech job market in the coming years.

Types of Positions in High Demand in Software Development

With the demand for software engineers taking the lead, Coderpad’s 2024 survey provides a more detailed view of the most sought-after competencies. Their report revealed that full-stack developers/engineers are in increasing demand, followed by back-end developers/engineers, which is no news as both areas of software development have always been in the highest demand. The demand for AI/Machine learning specialists is also rising due to the need to build emerging tech. The report also noted that recruiters are looking for mid-level and junior developers, with less demand for senior developers. This could be due to fewer open senior positions because they have already been filled, or be related to budget constraints, or even because tech is becoming less complex and less seniority is required.

Key Takeaways

• – This trend reflects the critical role of technology in business transformation and the increasing importance of digital security, data management, and emerging technologies. 
• – The data underscores a growing opportunity for professionals in the IT sector, emphasizing the need for up-to-date skills and continuous learning.

State Of Hiring In 2024

So, what is the state of hiring in 2024? How do we feel about the prospects of fulfilling the increasing demand? Based on the MIT Sloan Review on “Hiring Trends in 2024”, their insights drawn from a survey of 300 hiring decision-makers and 1000 job seekers in the US, 48% of the decision-makers were optimistic about the state of hiring in 2024 in their companies and 39% plan to increase their hiring budget in 2024. On the other hand, 70% of job seekers were very or somewhat confident about their job prospects. 

Key Takeaways

• – The job market landscape is not as bleak as might be perceived. The responses suggest a robust job market, encouraging mobility, and highlighting a competitive landscape that values skills and adaptability.
• – There is a positive economic outlook and readiness to invest in new talent.
• – Companies signal intentions for expansion and innovation, highlighting the importance of investing in human capital.

Challenges in Recruiting Tech Talent in 2024

Despite the impact of layoffs on the job market, organizations continue to struggle to hire qualified tech talent, with 75% of organizations indicating that tech recruiting is extremely challenging. This is due to the difficulty in finding talent with the required skills particularly talent that can meet the skills needed for building future technologies. This was listed in Robert Haf’s 2024 Market Outlook as the top challenge faced in hiring where 55% of employers surveyed by Robert Haf were noted to have difficulty “finding talent with the required skills” and was further corroborated by Coderpad’s 2024 survey which reported “finding qualified candidates” as the top challenge faced by recruiters followed by identifying potential, matching candidate with the right job, and evaluating soft skills.

Key Takeaways

• – The market is competitive and candidate-driven, requiring more skilled candidates due to rapid technology development.
• – There is a need to broaden the search by opening the doors to remote talent and revamping the recruitment process for maximum efficiency.
• – Organizations that provide the most attractive perks and benefits might attract top talent.

Conclusion: Outlook on Demand For IT Talent in the US

In conclusion, the outlook for tech hiring in 2024 is both challenging and promising. Despite the economic headwinds and the residual effects of layoffs from previous years, the demand for IT talent in the US continues to grow. This report has delved into various aspects of the tech job market, offering a comprehensive overview from the demand for specific tech skills to the geographical distribution of tech jobs across states and cities. 

As companies grapple with the need to innovate and stay competitive, the search for skilled IT professionals is more critical than ever. Organizations must adopt flexible, dynamic recruitment strategies and focus on nurturing talent to bridge the gap between the available workforce and the skills required for the future. The landscape of tech hiring is evolving, with a marked shift towards remote hiring and international talent pools, underscoring the global nature of the tech industry. 

As we move into 2024, companies that prioritize talent development and adapt to the changing recruitment landscape will be better positioned to attract and retain the IT professionals essential for their growth and success. 

Tunga is skilled at finding top IT talent. We excel at working with remote teams and selecting from international talent pools. Tunga can help you find the right candidates if you are open to these options. With our talent pools based exclusively in Africa, we have domain expertise in selecting and matching you with some of the best talents in the market.