The job market for software engineers with experience remains robust as organizations look to hire senior candidates and those with certain coding skills including Ruby on Rails, Python, and SQL.
Demand for software engineers with natural language processing (NLP), artificial intelligence (AI), and machine learning (ML) skills is also growing, along with the corresponding salaries, according to Hired's 2023 State of Software Engineers Report.
Highlights from Hired's data include:
- NLP engineers earn the highest average salaries
- demand for skilled blockchain engineers is holding steady despite the rollercoaster ride the crypto market has taken
- back-end engineers see the highest demand
The report found that eSMBs (emerging small and medium-sized businesses) drove most of the demand and salary increase for NLP engineers.
In 2020, eSMBs made up just 5.1% of interview requests to NLP engineers, but by 2022, that figure had jumped to 18.9%.
Similarly, salaries have also jumped across company size — from $154,000 for eSMBs in 2020 to $172,00 in 2022, with enterprise companies also paying top dollar at $184,000 in 2022.
Related: Attracting Senior Software Developers: Salaries, Workplace Culture Matter
"We're now at an exciting inflection point, where many industries are on the brink of being reshaped by AI, such as ChatGPT," Hired CEO Josh Brenner said. "Companies are increasingly integrating voice assistants, predictive text, and chatbots into their everyday systems — products and services to streamline processes and reduce costs."
As a result, more companies are prioritizing engineers well-versed in AI/ML and NLP to stay ahead of the curve against market competitors and to drive operational efficiencies.
The study also indicated that remote roles commanded higher salaries than local roles, especially in smaller markets.
"Companies know that top talent is necessary in any market — and this top talent is overwhelmingly demanding to stay remote," Brenner said. "We also found that companies are beginning to ease their geographical pay bands in favor of a single band."
Related: Software Engineer vs. Software Developer: Which Is 'Better'?
As a result, remote software engineers in smaller markets may especially have more ability to command higher compensation, particularly in companies employing similar roles in the higher cost-of-living and cost-of-labor markets.
Software Engineers with Both Hard and Soft Skills Are in Demand
Brenner said he was most surprised to see that soft skills — communication and leadership — and hard skills including coding languages take precedence over years of experience as the most important attributes for software engineering managers in 2023 — according to both candidates who must work with engineering managers and employers looking to hire them.
"This indicates that companies will increasingly need to rely on agile leaders who can effectively communicate complex technical concepts and manage teams across various time zones and locations in our ever-growing remote landscape," he explained.
In addition, the survey found employers value the "tech lead engineering manager" archetype — one who excels at keeping abreast of architecture and technical changes.
"To best stand out in the job search, engineering managers will need to be top communicators, while effectively striking a balance between hard and soft skills for the rest of 2023 and into the future," he said.
NLP, AI, ML Changing Hiring Landscape
AI and ML are the hottest fields in software engineering today and will likely continue this trajectory, as the industry is disrupted by emerging NLP technologies, according to Brenner.
"Therefore, software engineers can expect to be well-compensated for highly demanded skills in these areas," he noted. "There is a myriad of accessible resources that software engineers can tap into to acquire expertise in AI and ML skills, in addition to other in-demand skills."
According to the survey, many nontraditionally educated software engineers are acquiring skills through online courses (including Coursera and Udemy), programs and certificates from online schools, and subscription-based education learning tools, in addition to accessible free sites and blogs.
Brenner advised if they are currently employed, software engineers should also consider having a conversation with their company to determine if they offer specific resources or training benefits in respective areas.
"This is another path that we're seeing nontraditional candidates take to learn or strengthen their skills," he said. "Offering personal development opportunities is also an effective way for companies to improve retention rates."
Amid volatility, the demand for software engineers with nontraditional coding paths has held steady.
However, the wage gap for nontraditional educational background candidates has widened — with nontraditionally educated software engineers making 96 cents to every dollar earned by candidates with traditional backgrounds (compared with 99 cents in 2021).
"Companies likely have veered slightly more conservative in their hiring this year and are compensating traditionally skilled engineers at slightly higher salaries," Brenner explained. "This should not discourage nontraditional engineers, however."
Each year, Hired finds that the numbers of software engineers acquiring skills outside of traditional paths continue to grow (holding steady at 56% of candidates), and companies, accordingly, are looking beyond the typical pedigreed engineering talent to tap into a wider talent pool.
According to the most recent survey, almost half of the software engineering candidates (46%) who started a new job in 2022 felt their employer focused more on skills than pedigree, for example, degrees or recognizable brands on their resume.
The majority (64%) of employers surveyed are also actively looking for and considering engineering candidates with a nontraditional background, including those who attended bootcamps or are self-taught.
"Despite the wage gap, it's clear that pedigree is becoming far less important than skills in tech hiring, and we anticipate that these pay disparities may decrease as more wage transparency laws are enacted across the U.S.," Brenner said.
About the authorNathan Eddy is a freelance writer for ITPro Today. He has written for Popular Mechanics, Sales & Marketing Management Magazine, FierceMarkets, and CRN, among others. In 2012 he made his first documentary film, The Absent Column. He currently lives in Berlin.