IT Salary Outlook Grim as Economic Turbulence, Generative AI Impact Tech Pros

Economic turbulence and persistent high inflation contributed to a less than rosy outlook for IT worker salaries, while adoption of generative AI negatively impacted IT professionals just entering the workforce, according to Hired's annual "State of Tech Salaries" report.

These factors are fueling tension and misalignment between recruiter and job candidate expectations, the report concluded, noting local U.S. salaries plummeted to their lowest point in the past five years, falling nearly 10% to $129,000 from $141,000 between 2022 and mid-2023.

Hired CEO Josh Brenner said he was most surprised by the survey findings regarding employers' sentiment on remote workers' performance compared to their in-office peers.

When asked, "Are fully remote workers as productive as in-office employees?" 49% of employers answered yes, compared to 81% of jobseekers.

"These perceptions also have repercussions on opportunities for advancement, our survey also revealed," Brenner explained.

When asked about the likelihood of in-office employees being promoted, included in high-profile projects, and given opportunities for growth, employers were nearly evenly split: with 41% agreeing, compared to 40% who disagreed.

"This perspective risks perpetuating disadvantages for underrepresented workers, such as working mothers and disabled individuals, who have greatly benefited from remote work," Brenner added.

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This is especially notable, since 85% of surveyed women expressed a preference for fully remote roles, compared to 78% of men, he pointed out.

"As companies call their workplaces back to the office, they must be mindful that these mandates can further impose barriers to opportunities for women who statistically bear a greater share of caregiving and household responsibilities," he said.

Wanted: Experienced Engineers

Experienced engineers with the ability to resolve issues efficiently are in high demand, with employers on Hired's marketplace indicating a higher demand for specialized engineers, especially for AI applications such as machine learning (ML), cybersecurity, data, and back-end engineers.

Year over year, engineering managers have consistently held the top position as the highest-paid professionals on Hired's platform.

"Their ability to identify, articulate, and analyze software issues is becoming increasingly vital in our fast-paced technological landscape, particularly as AI and decentralized production continue to reshape the industry," Brenner explained.

How Generative AI Is Affecting Junior Hires

The survey also revealed that amid the rise of generative AI and tightening of corporate budgets, junior hires — those with fewer than four years of experience — are getting hit the hardest in terms of salary decreases.

According to Hired's platform data, positions for junior candidates have dropped from 45% in 2019 to 25% in 2023, while those requiring six to 10 years increased from 16% to 31% during the same period. 

"While we cannot attribute any specific trend as the cause of decreasing salaries, the data suggests that junior candidates are seeing the greatest salary decrease due to employers' growing needs for more experienced workers amid the surge of AI adoption," Brenner said.

From his perspective, it's clear that tech roles will continue to require AI-related and emerging technology-related skills.

In August of 2023, 23% of all national tech job postings included positions in emerging technologies or required emerging tech skills, and according to the U.S. Bureau of Labor Statistics, 37% of job descriptions within the emerging tech category listed AI work and skills.

"Candidates who don't possess these skills can increase their expertise through online boot camps like General Assembly, and e-learning courses such as Educative, and obtain certifications to ensure they are attractive to employers," Brenner said.