Given the number of constituencies looking to hire programmers and developers, it may not come as a surprise at just how difficult it is to hire and retain tech professionals who can actually write code. In fact, a new survey of 200 IT leaders and hiring managers conducted by TEKsystems, a systems integrator, found that programmers and developers are once again the hardest tech pros to hire; software engineers came in fourth on the list, just after security professionals.
One of the primary reasons that programmers, developers and software engineers are always at (or near) the top of this list is the level of competition for developer skills among vendors, IT services providers, and organizations. That level of competition makes organizations less inclined to hire developers as full-time employees, rather than freelancers.
Case in point is Rick Castro, CIO for Par Pacific Holding, who frames out why his company relies on third parties for application development. “There’s a lot of talent available offshore so it’s not really that difficult to find developers,” he said. “It really only make sense to hire a developer full-time when the application is really core to the business.”
As Castro notes, most organizations tend to hire full-time devs to create core backend services, while contracting out to build front-end applications.
A separate survey of 1,200 CIOs and senior IT leaders, conducted by Deloitte Consulting, found that only 16 percent of IT budgets are actually allocated to business innovation, with another 27 percent devoted to “enhancement”; the vast majority (57 percent) is reserved for IT operations. Unless CIOs find a way to cut operations spending, they tend to have little left over to invest in innovative projects that would require them to hire more developers.
Matt Nachtrab, COO for ConnectWise, a provider of professional service automation (PSA) software, believes most small integrators, who use his company’s software to run their business, also generally wind up contracting rather than hiring developers.
“Hiring technical staff is always the biggest financial challenge for these organizations,” he said. “Developers are simply out of reach for most of the smaller IT services providers.”
Jason Hayman, research manager for TEKsystems, thinks that many of the same economic issues that affect decisions to hire developers are also starting to raise their head in realm of Big Data. In theory, an explosion of Big Data applications should be driving a major spike in developer hiring; in fact, Hayman noted, positions associated with Big Data cracked the top-four list of most difficult positions to fill.
A full 65 percent of the IT leaders and hiring managers surveyed by TEKsystems identified Big Data architects as the most difficult role to fill. Data scientists (48 percent), data modelers (43 percent) and Big Data developers (40 percent) ranked second, third and fourth in terms of difficult Big Data positions to fill.
“A lot of those Big Data positions tend to work closely with developers,” Hayman said. “But just like developers, it might not always make financial sense to hire people with those skills even if you could find them.”
Put it all together and it becomes apparent that the biggest drivers of developer hiring are vendors, followed by high-end IT services providers (located both on-shore and off) and IT organizations that have a lot of internal talent dedicated to applications that actually drive revenue. For example, massive-scale companies such as Google tend to hire thousands of developers, while the number of developers who are hired as full-time employees by the average Fortune 1000 company is usually much less.
The rest of the technology industry seems content to rely on application-development services provided by third-party vendors. By their very nature, those service providers tend to maximize the business value of a limited pool of developers, while at the same time acting as a governor on programmer and developer salaries by making resources available almost anywhere in the world.
Not every IT services provider can afford to invest in hiring developers; but those that do, such as Accenture and Tata Consulting, tend to do so at a level of scale around the globe that make it difficult for other companies to cost-justify hiring developers as full-time employees.
Not every developer may appreciate the role those firms play in tamping down application developer salaries. At the same time, however, many developers appreciate being able to trade off a potential higher salary in favor of being employed by an IT services firm, where the projects are large and (often) significantly more varied.
There’s no doubt that the unemployment rate for developers will remain fairly low for years to come. But that unemployment rate may not directly result in developers commanding any salary they desire; application development, by definition, is a global marketplace full of freelancers and contractors in addition to staffers.