Tech Leaders Must Adapt to the Evolving US Developer Labor Market

Despite the uncertain economic climate and continued layoffs, competition for skilled software developers will remain high. Get three key insights from Forrester's latest TIER report to help attract the best developers.

2 Min Read
software developer working at his workstation

Despite the uncertain economic climate and continued layoffs, competition for skilled developers will remain high. In Forrester's Priorities Survey, 2024, 73% of respondents stated that their organization plans on significantly increasing their budget for software development in the coming year — suggesting continued demand for developers. Recently, there has been a major shift in the developer market, whereby organizations are adopting more conservative hiring practices — resulting in more intentional hiring for specific business needs rather than mass hiring for general needs. This shift highlights the need for organizations to adapt their developer workforce strategy to stay competitive in the labor market.

To help tech leaders find the right developer talent, we are excited to announce our new report, TIER: US Software Developer Labor Market, 2024, to give insight into current trends in the labor market and how geographic differences in talent pools can inform labor strategy. Some of the insights include:

  • Shining a spotlight on specialization. The current labor market favors developers with specialized skills, particularly in areas like AI and cloud computing. According to the US Bureau of Labor Statistics (BLS), software development is one of the fastest-growing occupations. However, developers with specialized skills are seeing higher demand and compensation, sometimes reaching million-dollar packages. On the other hand, those without specialized skills are experiencing lower salaries and fewer job opportunities. The uncertain economic climate is prompting tech leaders to adopt a more strategic approach to hiring, focusing on specific roles to meet business needs. This selective hiring can lead to a talent bottleneck and an unbalanced developer team.

  • Adapting to changing salary and location dynamics. As supply and demand dynamics shift, US developer salaries and employment are undergoing changes. The BLS reports that established tech hubs like San Jose experienced a 15% decrease in average developer salaries from 2022 to 2023. Conversely, emerging hubs like Salt Lake City saw salary increases during the same period. Tech leaders must adapt to these changes to stay competitive. While established hubs like the Bay Area still attract top talent, emerging markets are gaining importance.

Related:What Is a Software Developer and What's the Best Way to Become One?

chart of change in average annual salary 2022 to 2023 for software developers

  • New strategies for success. As of mid-2024, tech leaders must adapt to the changing labor market to secure the right developer talent. Key strategies include emphasizing specialized skills, exploring new labor markets, and investing in talent development. Forrester's TIER can help evaluate and guide labor strategy decisions. Our latest report outlines crucial strategies for finding the right talent. Or if you want to hear from our experts, feel free to schedule an inquiry or guidance session!

Related:Attracting Senior Software Developers: Salaries, Workplace Culture Matter

This research falls under Forrester's tech insights and econometric research (TIER).

— Forrester Blog Network/Christopher Gilchrist and Rachel Kwon

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