Watching the LinkedIn feed full of dramatic pleas for job in the last 4 months made me wonder whether a crisis like a virus leaves the strongest (most skilled) ones in the workforce and slaughters the weak ones? Is the IT job market better than others? Does it behave like a Free Market?
Below are my thoughts as not an economist, but a participant of the IT job market for 20+ years.
Is the IT job market a Free Market?
In economics, a Free Market is a system in which the prices for goods and services are self-regulated by the open market and by consumers. It’s driven by concepts of Perfect competition and Supply and demand.
Initially, a ”Free Market” for the economists was like a Spherical Cow for the theoretical physicists – something what doesn’t exist but is convenient to use in academical papers to skip over pesky details. But later brave economists started loosening up the term, applying it to markets that are almost free.
And at first glance, the job market for the IT professionals is the perfect candidate for labelling as a Free Market. Arguably, it has signs of an open market – we are the lucky ones who don’t need a license to operate, who can find a job anywhere in the world, work remotely and often no need in a formal qualification. If the Perfect Competition plays its role then the strongest specialist would get the job and the Supply and Demand would define the remuneration.
Simply, during a crisis, a top-notch IT specialist wouldn’t be fired and even so then would quickly find another job. The worry would be about salary adjustment, but not about unemployment.
Are we there yet in IT?
Not yet. Perhaps, even far away.
There are plenty of objective reasons for a struggling business to lay off valuable IT professionals. Such is life. Don’t question that.
But why IT professionals can’t get another job?
Consider a Spherical Cow example of a shrinking job market in the Free Market conditions:
- The number of unemployed people is growing due to businesses closure.
- Unemployed professionals would lower their salary expectations till own professional value becomes very lucrative for potential employers (ones who stay afloat).
- Those employers realise cost benefits of cheaper professionals on the market and replace the existing employees with more cost-effective counterparts.
- The new unemployed ones repeat the circle with lowering their salary expectations till the whole market comes to the equilibrium.
As the economics teaches us, everyone would benefit – people get jobs and market salaries, the employers become more cost efficient to grow businesses further. As the result, quick recovery of the economy and overall happiness.
But this magical circle is not happening. Even in countries where firing people is not a big deal (like the US and to some degree Australia). Why is that?
Problem 1. Tribalism
Tribalism makes people loyal to their social group above all else. And the tribal elders never think of replacing the existing staff with more skilled or cheaper workers. It’s during the good times. Then enduring a financial hardship, the elders would rather ask the employees to make a sacrifice (e.g. take a pay cut). The employees in their turn, being bummed by the committed sacrifice that lowed their self-esteem, don’t dare to look around for better opportunities.
In the modern society such behaviour is presented as caring of the company’s values and culture. Well, it can be justified for enclosed job markets where hiring is like marriage – a lifetime commitment… But the IT job market is (almost) open market. It’s as good as it gets. Is there a reason to expect that level of commitment from both sides nowadays? I mean working relationships, not marriage.
Problem 2. Inability to see the right candidate
The pandemic didn’t hit everyone equally. There are still companies that thrive and get new people aboard. They hire during the most favourable time with ample choice of unemployed, eager to work professionals… And they don’t feel any joy. Why?
It’s the employers’ fault
There are two felonies from the employers’ side:
- Inability to process a high volume of job applications.
- Notoriously bad interview process.
The later one is covered in millions of tweets and blog posts. But before even getting to the interview stage, the employer has to plough through all the submitted applications. How they’re doing it?
They delegate that tedious work to an HR person without much of technical expertise, whose duty is deciphering the position description and find matching words in the CVs. One match one score. Regardless of their meaning or context (can be ”Jira” or ”Angular”). If any uncertainty, then use the mythical ”years of experience”. Regardless that it can be the same experience repeated every year for 20 years.
That approach may work for hiring a technician (or a junior) but it becomes way less reasonable for more senior positions where problem solving skills and an ability to figure things out are paramount.
It’s the applicants’ fault
Though, the blame is not entirely on the employers. The applicants aren’t saint either.
Usually, IT professionals aren’t good at selling themselves, so wordings in the resumes is clunky and not informative. I would say that the traditional format of the resume is quite redundant for IT professionals, but it’s a separate topic.
Apart from the wording, there are other options for the CV to stand out. To name a few:
- StackOverflow profile. It gives examples of technical challenges the person has overcome.
- A list of recently learnt things (e.g. technologies or techniques). It can be a Pluralsight course or a conference. Curiosity is always encouraged.
- GitHub repos. It’s more time consuming, but contribution to OSS is always highly appreciated. Or one may maintain an own library of useful stuff.
- Own pet project. It can be a simple project with zero audience, but it shows that you can get things done.
Unfortunately, not many spend own leisure time on professional activities. But the ones who do, rarely publicise that.
Problem 3. Lack of performance metrics
Well, the hiring process of senior IT candidates is suboptimal. But what makes it a bigger issue for the IT market:
- IT guys are expensive.
- Their performance metrics are opaque. In other words, it’s hard to tell whether we’re doing a good job or not.
These two factors lead to expensive losses on hiring “a wrong guy”. If you don’t know how to measure performance of the IT professionals, you’ll never know how much you gain or lose.
Sadly, lack of performance metrics leads to a broken remuneration system. One doesn’t get paid for the skills/effort, neither for the value the person brings to the marketplace. It’s determined by subjective thinking of the manager on how valuable the person is to the organization. Simply, if the company has got money, they will happily pay high wages to an underperformer.
Sure, there are other problems, but arguably, those three are the biggest obstacle preventing the IT job market becoming a Free Market.
How to make a difference?
If you are an employer, who’s passively hiring, then dedicate 2-3% of your time looking for the candidates. If hiring actively then take the process in your own hands. Always have deep understanding of the skillset you need and how to measure/evaluate it.
If you are a job seeker, then find a way to stand out. You have to market yourself. Anyone who can’t, will fail sooner or later. If you already have “features” like a SO profile or an interesting GitHub repo, then do you own research to find companies you want to work for and reach them out marketing the “features”. The old-school employers will eventually retire. Be ready. But for the time being, the “old school” recommendations aren’t going anywhere - master your resume and networking.
There is too much of the human factor preventing the IT job market to become a Free Market. But the Economic globalisation will keep increasing pressure on businesses to work at scale. High adaptiveness of Free Markets is precious in a rapidly changing world. All the market participants will learn and adapt. It will get better, but slowly.
That’s it. Let the job be with you.
If this post sparks a curiosity of the IT market participants or even Subject-matter experts, then it was worthwhile spending my time writing it.