Hiring experienced software engineers is hard, and it’s not going to get any easier — Part three: Fewer fish, bigger pond
Based on the findings from the previous section, we can see that there are fewer experienced software engineers in the industry who have studied Computer Science, although there may be an increase in non-classically training software engineers.
To take the title’s metaphor, this probably means that rather than there being fewer fish, there is a wider diversity of fish in the pond. But as we will explore in this section, the pond is probably more the size of an ocean when compared with the pond of the early 2000s.
Diversification of demand
It’s no longer just the big software houses that who are hiring software engineers. With the ubiquitous nature of the Internet in modern day life, traditional everyday high street companies now also have a need for software engineers. Whether it’s accountancy firms providing online bookkeeping, restaurants needing web developers, or a coffee shop looking to integrate all of their social media presence in a single place, there is a more mainstream demand for software engineers. With a more limited number of engineers, there is now more competition for a more limited candidate pool.
Demand growth
The average number of vacancies per quarter, across all sectors was at an all time high in 2015 indicating a strong economy and high demand for hiring.
Conversely, vacancies in the IT & Communications sector were down 10% in the same period.
However, with unemployment figures recovered from the 2008 global recession, and actually lower in 2016 by 0.1% from 2000 we need to look further afield to understand where demand for software engineers stems from.
Data provided by IT Jobs Watch shows that demand for software engineers in London has seen a steady increase between 2005 and 2019. This shows that in 2019, 2.9% of all IT job vacancies in London were for software engineers, with a general upward curve over the past 15 years.
What’s interesting is that the effect of the recession, and Brexit seem to be negligible on demand, based on this data point.
It’s getting harder to find the right engineers
We’ve seen that demand is rising for software engineers, and that supply is short. According to data provided by Indeed to Business Insider, in the fintech sector 23% of all software engineering positions remain unfilled after 60 days, and 21.8% of ‘developer’ positions.
They went on to quote Chancellor Philip Hammond speaking at the Treasury’s fintech week:
“The FinTech sector is one of our fastest growing sectors, adding more than £6.6 billion into the UK’s economy and attracting more than £500 million of investment.”
More and more new companies are being created each year — 2918 new business were registered so far today (StartUp Tracker, UK). It’s an exciting time to do business in the UK, and this is a very positive indicator for the wider economy and sentiment.
However despite all of the benefits of a more vibrant economic landscape, the negative impact is that we face increasing demand for a smaller number of software engineers.
Summary
With more and more new startups being created each day, there is data which supports the argument that demand for a smaller pool of talent. Trend analysis of all job postings in London show consistent growth of intent of hiring software engineers across all types of businesses.
In part four, we’ll see what the impact of the shortage is causing to businesses (the tldr version is; salaries are going up — way up! But stay tuned to see the data.)
Are there other factors that I’ve not covered which affect demand? Even without any official reporting figures relating to Brexit, we cannot underestimate the impact of uncertainty. Add your comments below — I’d love to hear your views.
Thanks for reading.
The thoughts and opinions in this post are shared with my employers, they just don’t know it yet. Just kidding — something something legal jargon here. For some of my other ramblings, you can follow me on Twitter.
