IT Industry Outlook 2023: Trends Likely to Impact the Industry and Tech Pros

The resilience developed across the IT industry after two years of uncertainty has led to a general sense of optimism from technology professionals about business and employment prospects in the next year.

Even as economic uncertainties and fears of budget cuts shadow a robust IT market, many in the industry are looking toward 2023 with a sense of cautious optimism.

Dan Finnigan, CEO of tech hiring platform Filtered, says ultimately, the leverage that IT professionals have depends on how central their work is to the key initiatives of their companies. “For instance, digital transformation continues to be a priority for many businesses, so workers with skills in cloud or DevOps should continue to see a strong demand for their services,” he explains.

Finnigan says this skills-first approach to hiring is here to stay, so upskilling or reskilling is a great place for candidates to invest their time if they feel like their skills don’t align well to what’s truly in demand.

He points out many companies are anticipating a mild recession going into 2023, which can become a self-fulfilling prophecy. “For that reason, companies are going to be looking to do just a little bit more for a little bit less, which means that employees who can find efficiencies in workflows and processes will also have stronger standing,” he says.

IT Pros Benefit from WFH, Distributed Workforce Strategies

Meanwhile, the transition to a remote-first workplace opened the candidate pool globally, with IT professionals benefiting due to the acceleration of digital transformation.

Employers are no longer restricted to hiring candidates that are within a commutable distance of local offices, giving job hunters an opportunity to apply for roles that may not have been open to them previously.

“I believe with the continued prevalence of remote working, hiring decisions will become less based on culture fit and similar criteria, and more focused on skills and performance,” Finnigan says. “This will open the door to a much more globally diverse workforce, provided skills gaps continue to close.”

He adds the most important criteria for hiring will become whether someone can do the job well, instead of where they’re located or similar factors. “In a remote-first world, you can not only work from anywhere, but also learn from anywhere,” he adds.

With online training and education becoming more common in the industry, students from anywhere in the world are able to get advanced degrees from well-respected institutions in subjects like artificial intelligence or machine learning. “These programs are one way professionals can continue sharpening their skills to match the market’s demands in a skills-first environment,” Finnigan says.

Benefits of Working Well with Distributed Teams

Brian Westfall, principal analyst at Capterra, says even though the job market has cooled somewhat, the unemployment rate remains low, while the number of job openings is still near record-highs. “Until that changes, IT pros have substantial negotiating power going into 2023, especially established professionals that have a wealth of experience under their belt,” he says.

From his perspective, working well in a distributed team, and being able to serve the IT needs of other distributed teams, have become highly sought-after skills. “We know that hybrid work -- with all of its unique IT challenges -- is here to stay,” he says. “Those IT professionals that can thrive in this arrangement are setting themselves up for long-term success.”

The Case for Better Compensation

When it comes to compensation, Westfall notes that on the one hand, high inflation continues to outpace salary increases. “Whether it’s hopping to a higher paying job or asking for a raise at their current job, IT professionals shouldn’t be afraid to look for ways to increase their pay to offset higher cost-of-living,” he says.

On the other hand, economists “all but guarantee” a recession will hit the global economy in 2023, which will lead to layoffs at many organizations.

“Ultimately, IT professionals should find the right balance between job security, compensation, and important benefits -- like the ability to work from home,” Westfall says.

Christy Schumann, senior vice president of talent operations at Toptal, says when it comes to questions of compensation, “reading the room” is a crucial strategy.

This entails gathering a sense of general business performance by listening intently to leadership on town hall calls or addressing the issue with a manager directly.

“Tech is a huge field, and while some companies are experiencing challenges and lowered demand, others are performing well,” she explains. “If you get the sense the company is doing well, present your case for why you deserve a raise, bonus or any other benefit.”

She adds it's important to bring specific examples of individual achievements and how they made an impact on the business with measurable results. “If it seems the company is struggling financially, it will obviously be more challenging to earn a bonus, even if you made an incredibly worthy case for yourself,” Schumann says.

Opportunities in the SMB Space

The recent spate of hiring freezes and layoffs across the tech industry provides a unique opportunity for small businesses and companies in non-tech industries to bring in high-level talent that they otherwise might not have attracted.

Finnigan notes these roles will be particularly attractive to candidates looking to leave high-risk startups for a more secure, profitable business.

“However, with an influx of workers now in the talent pool, hiring pipelines can easily swell, and companies looking to hire need to act fast or risk losing out,” he cautions.

He says businesses that want to take advantage of the current talent pool need to abandon the traditional way of hiring -- “pointless phone screens and generic coding exercises” --and embrace a skills-first approach.

Replacing early interview screenings with skills-based assessments that mimic a company's tech stack allows hiring managers to assess candidates’ compatibility quickly and accurately, moving only the best through the pipeline.

“With this approach, hiring managers can spend more time with candidates who are truly qualified, which can lead to a more accurate decision and a faster time-to-hire,” Finnigan says.

Westfall says that smaller organizations may be able to offer IT pros looking for a change of pace an assortment of unique perks, as well as a close-knit company culture and a greater impact on local communities.

He adds that on a sheer impact-per-person basis, larger enterprises can't compete with SMBs.

“If you want to know you're making a significant impact on a company's success, SMBs are the way to go,” Westfall says. “And while a recession will impact every organization, big or small, you can make a better case that you bring value at an SMB. It could be risky, but there's real benefits to getting in on the ground floor of a growing company.”

Schumann says job seekers should keep an open mind about potential roles and companies, noting the current market puts businesses in the control seat versus talent holding that spot six months ago.

“Try to find work you like and will find inspiring, but certainly don’t limit your options,” she says. “Further to that point, remember that every company is a digital company. Don’t limit your options to the major players, but consider tech roles within healthcare, finance, government, and other sectors.”

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