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Hirewell saw tech hiring pick up 31% from Q2 to Q3 this year. But it still isn’t what it was in the 0% interest rate world. And may not be anytime soon.
For the past year, the sky’s been falling for my fellow (former) Office Dorks. Despite unemployment being at low levels (3.8% currently), it’s been layoffs, layoffs, layoffs. Bringing everyone to the knee jerk conclusion that the data's flawed. The old “maybe there’s something wrong with the universe” reaction:
The truth is simpler. IT unemployment is higher than the national rate: 4.3%.Per the Wall Street Journal.
For context it was at 2.3% in Q1 2022, when the Covid rebound was at its peak. Tech was hit harder than the norm.
Sadly, the WSJ’s premise was that’s it because of AI. Investors may make decisions based on hype, but I have yet to see companies make personnel decisions when the ‘replacement’ still isn’t ready for prime time.
TechCrunch has a more straightforward explanation. VC funding is coming back, but it’s nothing like it was.
“What we’ve noticed in the statistics is that the Series A deployment is down 60% over the last year and a half. The amount deployed per Series A is down 25% from $10 million to $7.5 million. And the number of deals getting done is much fewer,” said James Currier, general partner at NFX.”
The drivers of tech growth are driving less tech growth. Which aligns with the ~5% risk free interest rates. You need to make better bets when you can make more than nothing on your cash. And certainly when you take on higher debt and get saddled with higher payments.
Back to our own data. A 31% bounce in tech hiring seems pretty good, no? Is there a downside?
I’m glad you asked, James. Yes. Average salaries of software engineers Hirewell placed is down 7% from Q1 2023.
Hiring is coming back, but not all the way..
Funding is coming back, but not all the way.
Salaries are down.
The sky is no longer falling. But we’re going to need another business driver to get things back to 0% interest rate hiring levels.
Yes the Star Wars line was a troll. Don’t @ me.
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