- Job postings in tech are 36% below their 2019 levels, according to new data from Indeed, a major jobs site.
- Increased competition, low-priority hiring, and uncertainty over the pandemic are all factors, Indeed economist AnnElizabeth Konkel told Business Insider.
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The tech industry is feeling the economic effects of the coronavirus pandemic.
After the virus pushed workers to go remote in March, predictions abounded that tech jobs might help lead the recovery. Now that doesn’t seem to be the case. Even worse, although the work-from-home era signaled that more tech jobs might be available outside traditional hubs, that’s not turning out to be true, either.
Indeed economist AnnElizabeth Konkel reported that because competition for tech jobs is up, workers could lose bargaining power, as tech job postings have trended below overall job postings since mid-May and have remained about 36% below last year’s trend for a number of weeks.
As of July 24, Konkel said, tech postings were performing worse than job postings overall in 50% of tech hubs and 89% of non-tech hubs.
The increased demand for jobs in tech — where workers can get the job done remotely fairly easily compared to other industries — comes as the pandemic continues to impact the movement to work from home, with some companies like Google announcing work-from-home measures will continue through at least July 2021.
Though the demand is there, Konkel said tech jobs postings are performing worse now than the overall job market. Since the mid-May slowdown, tech postings have been behind the overall market, but the gap has grown significantly, as overall job postings fell to 21% below their 2019 level at the end of July, and tech jobs specifically fell to 36% below 2019 levels, with no comeback in sight.
Despite the industry’s overall job posting decline, some areas have weathered the setback better than others. While the trend in tech postings in Baltimore only declined by 20%, areas like Raleigh and Seattle saw harder hits, down 45% and 41%, respectively.
Konkel attributed the jobs decline in tech to the industry’s high cost of hiring and firing. “While a restaurant may take on workers based on demand experienced over the past two weeks, sectors like tech have much longer planning horizons,” her report said. “And with so much uncertainty, as highlighted in the Congressional Budget’s Office latest economic outlook, bringing on new employees may be a low priority now.”
“The virus is the key driver of tech jobs flatlining,” Konkel told Business Insider. “Coronavirus has unleashed tremendous uncertainty in the economy and will continue to do so as long as it remains largely unchecked. This uncertainty looms over businesses and makes it very difficult to predict what the future holds.”
Sectors like tech have high hiring and firing costs, she said, and “there seems to be a hold pattern on hiring right now. Tech companies also think of their budgets in the long term, and the current economic situation is likely causing them to be more conservative right now.”