RALEIGH — Across the country — and even in thriving technology hubs like the Triangle — tech job postings are recovering more slowly than other industries, according to a new analysis by the job site Indeed.
Overall job postings were down 21% compared to a year ago as of July 24, according to Indeed. But tech job postings were 36% below last year’s level, and show no sign of bouncing back.
“No sector is safe from coronavirus damage, and tech is no exception,” Indeed economist AnnElizabeth Konkel said in a phone interview. “We are starting to see the economy recover a bit … but tech (hiring) has shown no signs of recovery at all. It is a flat line.”
In the Triangle, overall job postings fell 26%. However, tech job postings fell 45%.
In Charlotte, overall job postings fell 25%, while tech job postings fell 52%.
Konkel attributed the decline to the fact that it is so expensive to hire and fire tech employees.
While the tech industry might not be hiring many people right now, she said, it didn’t shed as many jobs when the pandemic hit. Many tech employees were able to easily shift work to home, letting them remain productive.
“The hiring and firing costs in tech are high — especially in relation to a restaurant or a hair salon,” Konkel said. “A (restaurant) is going to base hiring on the last couple weeks of demand. But in tech, forecasts are much longer. It may be based off a quarter, a year or a multi-year forecast.”
But with the virus still raging across the U.S. and the path of economic recovery still uncertain, tech companies for the most part have decided to stay with their current employee base, Konkel said.
Locally, tech firms like Red Hat and SAS have made moves to keep their current employee base intact. But they are also slowing down a once robust hiring cycle.
“I would say over the last five years, we’ve probably hired 1,000 to 1,500 (new employees) a year,” Red Hat CEO Paul Cormier said in an April interview. “We have had a huge hiring plan. Now we’re re-evaluating it. I mean, none of us knows what’s going to happen in three weeks, let alone three quarters, right?”
Tech job postings in North Carolina were hit especially hard, according to Indeed’s figures.
Konkel said these trends aren’t likely to be reversed until the coronavirus is tamed. The chances of a v-shaped recovery aren’t looking positive right now, she added.
“The virus is boss right now,” she said. “If it continues to ravage the U.S., then I would expect (job trends) to continue to flat line.”
Bargaining power goes back to companies
The COVID-19 economy also appears to be reversing a years-long trend of educated tech workers having bargaining power over companies. With job postings falling, the ones that are available have become harder to land.
In February, tech jobs received 68% of the clicks of the average posting, Indeed said. By the end of July, those posts were attracting 95% of the clicks of the average job. Indeed says that shows more people are interested in these jobs than before the pandemic.
Before the coronavirus, tech employers routinely complained about how hard it was to find qualified tech workers. This resulted in wages rising and employers offering more perks to attract workers. In some cases, companies were forced to teach workers tech skills to fill jobs.
For those that are still hiring that has meant more options.
Jesse Lipson, the founder of the fast-growing Raleigh startup Levitate, told the N&O this month that when his startup posted a position recently, more than 350 people applied, something that would have been unheard of before the coronavirus.
“Six months ago the labor market was really tight,” he said. “We were successful recruiting, but we had to work really hard because we were hiring aggressively. There are a lot more people in the labor market right now.”
This story was produced with financial support from a coalition of partners led by Innovate Raleigh as part of an independent journalism fellowship program. The N&O maintains full editorial control of the work.