IT Labor Market Still Tight as Hiring Picks Up in July

Tech sector companies increased their staffing by 5,432 employees in July, and the national tech unemployment rate fell back to 1.8%, the lowest rate in six months, according to CompTIA's analysis of July employment figures from the U.S. Bureau of Labor Statistics.

Tech occupations among employers across all economic sectors rose by 65,000, even as employers eased back on job listings for IT roles, which totaled around 204,400 in July.

The professional, scientific, and technical services sector was the top industry looking for tech talent, followed by administrative and support, manufacturing, and finance and insurance.

The report is a clear sign of a still tight labor market for tech talent, with very few tech workers sitting on the sidelines.

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However, job posting volumes year to date have eased relative to the record highs of this time last year, which is not unexpected.

Job postings are a measure of employer hiring activity, but also a measure of hiring intensity — that is, how hard employers must compete in the market.

Tim Herbert, chief research officer for CompTIA, said one possible explanation for the recent slide in job postings is the perception among some employers that they don't have to invest quite as much in recruiting to hire the tech workers they need.

"Of course, there is also the cloud of economic uncertainty that may lead some employers to take a wait-and-see approach to hiring, which could result in fluctuations in job posting volumes," he said.

AI's (Currently Small) Role in Increasing IT Hiring

Employers are also starting to ramp up hiring for AI skills and dedicated AI job roles, but at this point it remains a relatively small percentage of tech hiring activity (less than 9% last month).

Herbert-CompTIA

Most employers are still evaluating AI through the lens of an enabling and/or embedded technology to work in conjunction with existing systems, processes, and people, according to Herbert.

"It will take time — likely far longer than some of the current projections — to gain a better understanding of the direct and indirect impact of AI on IT employment," he said.

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From Herbert's perspective, in the aggregate the IT hiring market is in a good place.

"There will always be pockets of strength, by geographic location, industry sector, or job role, as well as pockets that lag," he added.

Where the IT Jobs Are

The report also found that while major metro areas including Washington, D.C.; New York; Dallas; and Chicago continue to be the top locations for tech job postings, smaller hubs — including St. Louis; Jacksonville, Florida; Sacramento, California; and Las Vegas — are also experiencing growth.

"This is not a new trend, but it is sometimes overlooked," Herbert explained. "Last year, all 50 states experienced growth in their IT workforces, and by extension most of the metro areas within these states."

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A routinely tight labor market for tech talent coupled with the remote work trend opened some eyes among employers and job seekers to hiring or employment opportunities in "under the radar" cities across the country, he said.

"With the ongoing macro trend of more industry sectors and more business functions relying more heavily on technology, non-traditional tech hubs should continue to provide plenty of opportunity," Herbert said.

WalletHub's annual ranking of best and worst cities for STEM professionals, released in January, placed Seattle first, in large part because of its number of opportunities.

Organizations are also seeking senior software engineers and those with certain coding skills including Ruby on Rails, Python, and SQL, as salaries rise from 2020 levels, according to a March report from Hired.

The study also indicated that remote roles commanded higher salaries than local roles, especially in smaller markets.