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David Malan
Account Manager
Techreviewer
Posted on 
December 26, 2024

IT Labor Market in 2024

Digital transformation has become an integral part of how businesses work. Thus, the IT market is gaining more traction than ever, and IT salaries have seen huge growth. The market has grown steadily in the past decade despite the continuing layoffs. In 2023 alone, 263,000 employees were laid off by over 1180 companies globally. 

Of these, more than two-thirds were in the United States. The reasons for this include the economic downturn, high inflation, higher interest rates, and supply chain disruptions. However, the IT market is expected to continue its upward growth trajectory. 

Tech employment in the US is predicted to exceed 7.1 million people by 2034. In 2024, the sector has around 6 million employees in the US. The industry's challenges include a shortage of skilled professionals, economic uncertainties, and gender diversity. 

Techreviewer's study provides an extensive analysis of the IT labor market. It provides an in-depth perspective of its various aspects, including recent trends and challenges. Companies looking to leverage IT services would find the research perspective invaluable. 

Techreviewer.co experts have meticulously gathered data and insights that can help businesses in their IT operations. The survey analysis will help businesses and IT services stay updated on the evolving IT sector and ecosystem and understand the future shift in tech.

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Company profiles and geographical focus

Respondents to this survey come from a diverse demographic encompassing small businesses with less than 10 employees and large corporates with more than 1000 employees. Techreviewer has recorded survey results from 21 respondents with varying roles in the IT industry. This diversification helps in deriving a comprehensive perspective of the industry's advantages, challenges, trends, and future scope.

Roles within IT services companies

Respondents to the survey ranged from general manager to CEO/president. Of the surveyed individuals, 57.14% held the role of President or CEO of the company, while 14.9% held the role of CMO. HR, CTO, Web researcher, and General Manager comprise 4.76% each. With such diversified roles, Techreviewer has been able to get different outlooks on the IT labor sector. This enables a better understanding of the industry's impact and its effective utilization.

Years of experience in the IT industry

In the IT sector, experience is paramount. It gives IT professionals the knowledge and expertise needed to complete projects successfully. Experience also allows for effective collaboration and the delivery of top-quality results. With an increase in experience, the salary also increases. A Stackflow survey indicates that the wages of IT professionals increase with an average experience of over 10 years. 

Company sizes

The companies surveyed ranged from small and medium-scale businesses to large and corporate companies. 9.5% of respondents belonged to companies with less than 10 employees. 

Companies with 10 to 49 employees made up a big chunk of the surveyed firms, with a percentage of 38.1%. 14.3% of companies had 50 to 99 employees, while 23.8% had 100 to 249 employees. 14.3% of companies had 250 to 999 employees. The distribution shows a significant portion of the surveyed firms belonged to the small and medium-level businesses.

Main office locations

The location of an IT firm has a direct influence over several key aspects. It can impact accessibility, cost, infrastructure availability, and related aspects. Choosing good locations can boost a company's long-term performance. A lousy location choice can cost a company enormously in terms of losing clients and talent. 

Firms surveyed are from a wider geographic area encompassing Asia, Europe, and the American continents. Of the companies reviewed, 23.81% were from India, while 14.29% were from the United States. 

Serbia and Germany contributed 9.52% each, while countries like the UK, Bangladesh, Estonia, Belgium, Warsaw, and Argentina had 4.76% each. The location information reveals that most firms were from India and the United States, making up nearly 38% of the surveyed participants.

Talent acquisition and assessment

One of the biggest challenges the IT sector faces is the critical talent pool gaps. The supply of qualified professionals does not meet the demand. According to Gartner, 73% of CIOs were worried about talent attrition in the sector, while 86% reported facing more competition for qualified candidates. In a survey by McKinsey Global, 58% of respondents stated that addressing skill gaps has become a top priority since the pandemic.

Techreviewer's study reveals that on a scale of 1 to 5, the majority of respondents (over 90%) show either satisfaction or high satisfaction, indicating a generally positive perception of the IT talent pool. However, a small percentage remains neutral, signaling potential room for improvement. 

Methods for assessing technical skills

Technical skill assessment helps companies gain better insight into candidates' specific competencies and skills. It allows firms to assign appropriate candidate roles, reduce bias, and enhance diversity. The process can also find skill gaps in existing teams.

Techreviewer surveyed the assessment methods used by firms to test the technical acumen of potential employees. Of the surveyed respondents, 90.5% indicated technical interviews were the major assessing method. 

About 57% used coding challenges or tests, while 43% of respondents said they used hands-on project assessments and reference checks. Around 29% indicated a certification review was done to assess their technical skills, while 10% said they used third-party assessments.

Prioritized soft skills in hiring

Alongside technical knowledge, firms are prioritizing soft skills for many reasons. Soft skills can improve collaboration and productivity, provide better customer service, and create a positive work environment. The dominance of problem-solving and team-oriented skills highlights the need for IT professionals who can integrate technical expertise with collaborative and analytical abilities.

The Techreviewer chart above reveals that 23.81% of respondents considered problem-solving the main soft skill used when hiring IT professionals. More than 60% of employers prioritize problem-solving skills when assessing candidates. At 19.05% each, communication, teamwork, and collaboration are the next most valued soft skills in the IT sector.  

14.29% stated that critical thinking is a priority during the hiring process. It is interesting to note that leadership skills, pegged at 4.76%, are not a top priority. Similarly, creativity, adaptability, and a combination of all the skills are given 4.76% weightage. The results corroborate those of other similar studies that reveal problem-solving as the key skill during hiring.

Importance of certifications

The dominance of the "Moderately important" response (38.1%) suggests that many companies view certifications as one of several factors in evaluating candidates. This may reflect an industry-wide shift towards prioritizing demonstrable skills over formal qualifications.

The 19% who value certifications for specific roles likely operate in fields where technical standards or regulatory compliance (e.g., cybersecurity or cloud architecture) necessitate certified expertise.

The 23.8% who consider certifications "Very important" may represent organizations focused on maintaining competitive edges through a highly qualified workforce.

However, the 14.3% viewing certifications as "Nice to have" and the 4.8% seeing them as "Not important" could signify a growing reliance on internal training and upskilling programs.

For individuals, the survey reflects the need to balance acquiring certifications with developing hands-on experience and soft skills, which are also highly valued.

Specialized certifications in high-demand areas may offer a competitive advantage, particularly in organizations that prioritize them for specific roles.

Overall, the findings highlight the nuanced role of certifications in the IT hiring landscape, emphasizing their value in specialized contexts while recognizing the importance of broader skills and adaptability.

Employee development and upskilling

To keep up with the changing dynamics in the tech world, IT professionals need to be suitably upskilled and take up reskilling programs. Upskilling is a process where employees enhance their expertise within their specific domain. Reskilling allows them to gain knowledge in aspects that are not under their current focus. 

A good example of these two phenomena is gaining knowledge in Artificial Intelligence. While AI is seen as a threat to jobs, knowledge in the sector can help improve employee and employer prospects.

The Techreviewer survey above reveals that 81% of respondents state that their company offers them upskilling or reskilling programs. The programs help them keep abreast with evolving technologies. Only 19% of the respondents said their company does not provide such programs. 

Some of the programs that companies offer include 

  • Staff Augmentation
  • Educational courses sponsored by the company
  • Mobile app development programs
  • Healthcare app development
  • Blockchain and AI development
  • Custom software and eCommerce
  • Salesforce development
  • Game development
  • IoT and Fintech

Additionally, companies offer training and certifications in AWS, Salesforce, HubSpot, Azure, and PMP, as well as paid cloud certifications and AI development training. The upskilling programs help employees learn new skills and keep up with changing industry trends. 

Some of the respondents stated that companies help build skills in Agile and Lean methodologies, which improve flexibility and team collaboration. Scrum, iterative development, and sprint planning are Agile methodologies that enhance the skills of project managers. The respondents stated that upskilling helps project managers handle challenging projects with accuracy and adaptability, which results in improved project outcomes.

Reskilling programs offered to IT professionals include training in programming languages like Python, Node.js, and React. Many firms also provide training in cloud computing platforms such as AWS. IT professionals can also use certifications in DevOps practices, automated testing and deployment, and continuous integration. 

Impact on employee retention and competitiveness

Investing in employee upskilling and reskilling can help firms stay ahead of the competition. Increased salaries and better job satisfaction ensure employee retention. With the right upskilling programs, firms can bridge the gaps in IT talent. Introducing the programs is a win-win situation as they are beneficial to workers and businesses.

Recruitment trends and challenges

In the United States, the number of IT professionals employed in 2024 is around 4.166 million. According to the Janco report, the IT job market has increased by 6,200 in the past 12 months. However, the hiring of IT professionals faces hurdles in the form of a lack of skilled talent and the economic slowdown. 

The Techreviewer pie chart above reveals that 38.1% of respondents consider hiring trends to have remained stable. However, 23.8% state that the demand for IT professionals has increased slightly, and 14.3% have said that there has been a significant increase. 

19% of the respondents stated that demand has decreased slightly, while the remaining 4.8% said that hiring trends have markedly decreased. Overall, the trend is positive, as corroborated by the Janco report.  

Major recruitment challenges faced in 2024

The imbalance in job market demands and available skills has made talent shortage an issue of concern in 2024. Nearly 55% of employers find it challenging to hire skilled candidates. This has led to increased hiring costs and the time taken to fill vacancies. Some of the key challenges faced in recruitment are:

While there are many specialists, they may not be the right fit for a firm. The knowledge, experience, and tech stack required make it difficult to find a professional with an exact match.

Hiring professionals internationally can save costs and ensure a good match. However, it comes with issues like regional and cultural differences, language barriers, and differences in time zones.  Techreviewer has identified a few crucial challenges from its survey. Of the surveyed professionals, 33.3% state that high salary expectations of IT Pros are the main deterrent. 38.1% say that the difficulty in finding suitable candidates is the problem. 

28.6% of the respondents say that the shortage of qualified talent is a major challenge. Limited local talent is another challenge, as per 28.6% of the respondents. According to the survey, the lack of brand recognition (14.3%) and adapting to hybrid or remote work conditions (14.3%) are other challenges that companies face. Only 9.5% state that the long hiring process and retaining the hired talent are issues faced during recruiting.

Measures implemented to overcome recruitment challenges

From the responses to the Techreviewer survey, here are the main measures that firms implement to overcome the various challenges in hiring.

  • Expanding talent search to new regions (48%).
  • Increase in salary package, providing training and development programs, and upskilling current employees (38% each).
  • Remote work options, enhanced company culture and benefits, and investing in employee referral programs (29% each).
  • Offering signup bonuses (14%).
  • Partnering with recruitment agencies (10%).

The analysis of responses to the effectiveness of current strategies for retaining IT talent reveals:

  • Highly Effective (5): 43% of respondents rated their strategies as highly effective, suggesting significant success in retention practices.
  • Effective (4): 48% of respondents believe their strategies are effective, indicating confidence in their approach with room for improvement.
  • Moderately Effective (3): 10% of respondents view their strategies as moderately effective, reflecting potential challenges in achieving retention goals.

‍

The majority (over 90%) rate their strategies as effective or highly effective, showcasing general satisfaction with retention efforts. The small percentage of moderate effectiveness highlights areas where further focus and innovation may enhance employee retention outcomes.

Competitive advantages in attracting IT talent

When surveyed about a company's competitive advantage in attracting IT talent, 57% of respondents mentioned flexible work arrangements. This was followed by a strong company culture and access to advanced technology (52% each). 

Stability, long-term prospects, and involvement in exciting and innovative projects rank next, with 48% each. Increased career growth opportunities and investing in employee development score around 43% each.

The focus on flexible work models and career stability suggests a shift in priorities post-pandemic, with professionals valuing adaptability and security.

Companies that provide innovation and personal growth opportunities gain an edge in attracting dynamic, motivated IT talent.

Remote work and its impact

Remote and hybrid work models offer various advantages to employees and employers. They help employees improve their work-life balance and make them more productive. A Gallup survey shows that 53% of jobs in the US are hybrid and 27% exclusively remote. 

In Techreviewer's survey, the respondents were asked about their company's current preferred work model. On a scale of 1 to 5, with 1 indicating fully remote work and 5 indicating on-site work, equal preference was seen for both work conditions. However, around 14.3% of the respondents indicated a scale of 3, revealing a hybrid work preference. The survey results show that employees now prefer a flexible work environment.

Percentage of workforce working remotely

The tech sector in the US has around 67.8% of people working remotely. A Buffer study reveals that 98% of respondents prefer remote working, and 91% report a positive experience with the remote work model.  One of the main benefits of remote working is an increase in productivity. 

Techreviewer's chart above shows that 29% of respondents indicate a significant increase in the company's productivity due to remote work. However, 43% state that it does not have any impact. An equal percentage, 14%, said that there is a slight increase and decrease in productivity. 

When asked about anticipated changes in remote work policies in 2025, 57% of respondents said that they expect no change in the current situation. 19% are hopeful that the situation will become more flexible. Meanwhile, 10% expect the policies to become more restrictive. 14% anticipate a shift to a fully remote working model. 

The role of AI and automation

Artificial Intelligence and Automation are having a massive impact on business operations. While there is contention that these technologies result in job cuts, they also create new opportunities. 

New careers are opening up in sectors like machine learning, data analysis, system management, etc. IT professionals need to collaborate with AI technologies to develop, manage, and enhance effectiveness. An IBM report reveals that 42% of enterprise-level companies have actively used AI in their operations, while 40% are considering using the technology.

Techreviewer's chart above shows that 43% of respondents believe that AI and automation can increase productivity, it’s clear that organizations see these technologies as key enablers for efficiency and streamlined workflows. Around 14% consider that technology will create new job types, while 19% believe that technology will augment current roles. 

Implications for IT companies:

  • Companies should invest in AI-driven tools and training to maximize productivity and enhance existing roles.
  • To attract top talent, organizations must emphasize their forward-looking strategies, such as creating opportunities in emerging AI-driven job markets.
  • Bridging awareness gaps with education and strategic communication about AI’s impact can align all stakeholders with future objectives.
  • Balancing cost efficiency with innovation ensures competitiveness while maintaining employee satisfaction.

Impact on required IT skill sets

The Techreviewer survey had some interesting responses when asked about the impact on the required IT skillset for automation and AI. A majority (57.1%) state that the technologies will have a moderate impact, while 19% say they will have a high impact. 9.5% say there will be minimal impact on the IT skill sets needed. 

Meanwhile, 14.3% think there will be a significant impact on the IT skill sets needed. The responses reveal that most respondents consider the new technologies to impact the IT skill set required in the coming year. 

Projected demand for IT professionals in the coming year

Given the evolving nature of the tech industry, a higher demand for IT professionals will continue. According to the Bureau of Labor Statistics, IT jobs are projected to grow at a faster rate from 2023 to 2033. On average, around 356,700 openings are expected every year. Techreviewer's research results, presented below, confirm this prediction.

Nearly half (47.6%) of respondents anticipate a moderate increase in demand for IT professionals. This indicates steady growth in the sector as organizations continue to require skilled talent to address evolving technological needs. Companies anticipating growth should plan proactive recruitment strategies and strengthen their employer brand to compete for top talent.

14.3% predict a significant increase in demand, which may reflect growth in specific areas like AI, cloud computing, or cybersecurity where the need for expertise is surging.

33.3% expect demand to stay the same, suggesting that some companies may have reached a level of stability in their hiring or are focusing on optimizing existing talent.

A small portion (4.8%) foresees a moderate decrease, possibly due to economic challenges, restructuring, or shifts toward automation reducing the need for certain roles.

Employee retention strategies

According to the Bureau of Labor Statistics report, in December 2024, the total number of separations was 5.3 million, with 3.3 million quits and 1.6 million discharges and layoffs. According to a Gallup study, 51% of US employees are watching or actively searching for a new job. Many organizations are facing the big challenge of retaining talent crucial to business success. 

Top factors contributing to employee retention in 2025

The prevailing data on employee retention reveal that firms' current retention strategies are not working. Techreviewer's chart shown below reveals the responses to the top factors that help in employee retention. 

As per the above chart, competitive salary, benefits, and work-life balance are prominently endorsed by 62% each. Job stability and security are another important factor endorsed by 43% of respondents. This is followed closely by factors like opportunities for career growth and flexible work arrangements (33% each). Factors like flexible work arrangements, positive company culture, and ability to work with cutting-edge tech have a moderate influence.

Overlap Between Attraction and Retention:

  • Competitive salary and benefits: While less critical for attraction (29%), it dominates as a retention factor (62%).
  • Work-life balance and flexible arrangements: Strongly valued in both categories, reflecting the ongoing importance of workplace flexibility.
  • Positive company culture: Significant for both attracting (52%) and retaining (43%) talent, underscoring its dual role.
  • Innovative and exciting projects (48%): A key draw for new hires, but less emphasized for retention.
  • Job stability and security (43%): A major retention factor but not strongly highlighted as an attraction advantage.

Additional benefits and perks offered to attract and retain talent

Some of the added benefits that companies use to attract and retain talent, as per the respondents, are:

  • Flexible work model, continuous learning, and innovation-driven culture.
  • The absence of micromanagement and perks offered to help members flourish and create a positive impact.
  • Competitive pay packages and performance bonuses.
  • Professional development opportunities.
  • Collaborative work culture.
  • Opportunity to use cutting-edge tools and technology.
  • Employee benefits include health and wellness programs, recognizing employee achievements, paid leave, and helping in career growth and advancement.
  • Providing stock options and profit-sharing
  • Flexible work hours and paid sabbaticals.
  • Educational budget and student loan assistance.

Future outlook

The US IT labor market is predicted to grow rapidly from 2023 to 2033, with 356,7000 job openings available annually. According to a McKinsey report, emerging tech like generative AI and automation can help boost productivity. Generative AI can increase US labor productivity to 0.9% by 2030 from the present 0.5% if the average adoption rate is maintained. Integration of automation can help increase productivity in the US by 3 to 4 %. 

While these predictions look positive, the IDC report on the growing IT skills shortage raises concern. According to the report, by 2026, over 90% of businesses globally will lose about $5.5 trillion due to delays in product delivery, business loss, and impaired competitiveness. Upskilling and reskilling are vital for achieving the full benefits of technological advances. According to the HBR report, the average half-life of tech skills is less than five or as low as 2.5 years. 

Emerging trends and their potential impact

As noted earlier, technology is an evolving space. Technologies emerge as a solution for some specific problem. However, emerging trends indicate that the integration of technologies can help in rapid and sustained growth.  

For instance, edge computing and 5G networks together form 5G edge while machine learning and quantum computing integrate to boost workplace efficiency. Integrating AI in robotics helps in efficient automation, enhancing productivity, accuracy, and greater ROI. 

To fully capitalize on the advantages offered by emerging technologies, businesses need to consider fostering expertise in multiple knowledge areas. Encouraging IT professionals to reskill and upskill can help them adapt to the changing digital landscape. 

Conclusion

The IT labor market is an evolving sector that changes with the introduction of newer technologies. While existing jobs are redefined, newer jobs are created. In Techreviewer's analysis of the IT labor market, key areas such as talent acquisition, upskilling, challenges in recruitment, and the impact of remote work have been studied. The impact of emerging tech like AI and strategies for employee retention have been analyzed. Findings from the survey provide a candid perspective of the current IT labor market trends. They also help businesses looking to hire IT services understand the prevailing trends. Leveraging the findings can be useful both for firms providing IT services and businesses using the services.

This survey underscores the importance of creating a balanced approach to talent management, integrating modern workplace trends with traditional stability and development priorities to thrive in the competitive IT labor market of 2024 and beyond.

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WRITTEN BY
David Malan
Account Manager
Techreviewer
A specialist in the field of market analysis in such areas as software development, web applications, mobile applications and the selection of potential vendors. Creator of analytical articles that have been praised by their readers. Highly qualified author and compiler of companies ratings.
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IT Labor Market in 2024