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AI, economy affect 2024 tech workforce trends, survey shows

AI adoption is reshaping technology skill sets in enterprises, while lingering economic uncertainty dampens some forms of compensation, according to a TechTarget survey.

Artificial intelligence is increasingly influencing IT hiring plans and talent strategies, which could reshape technology teams in the coming months and into the future, based on data from TechTarget's annual survey on IT salaries and careers plus interviews with tech executives.

An upcoming report on the 2024 survey describes an emerging tech workforce in which AI skills and technologies will play a much bigger role. Among the more than 200 U.S. IT professionals who responded to the online survey, the combined skill set of AI, machine learning (ML) and data science jumped from fifth to second in the list of hiring priorities, narrowly trailing cybersecurity in the No. 1 spot. Cybersecurity moved up one spot from the 2023 survey.

Also, in many organizations, AI is viewed as a technology to augment workforces in addition to being a skill to obtain through hiring. Nearly half of the respondents said they use or plan to use generative AI to address IT skills shortages, ranking automation and higher efficiency as the top benefits of GenAI technology.

Other workplace trends detailed in the TechTarget survey including the following:

  • U.S. IT professionals reported average compensation of $165,467, about an 8% increase compared with last year's average. Compensation includes salary, bonuses, stock and perks.
  • Sixty-two percent reported a salary increase within the past 12 months compared to 59% last year. But non-salary compensation such as bonuses, stock and benefits took a hit this year.
  • The survey pointed to a marginal increase in the maturity of diversity, equity and inclusion (DEI) initiatives, with 41% reporting mature programs vs. 39% last year.
Bar chart showing average salaries by job category
A TechTarget 2024 survey found the average IT compensation increased 8% to $165,467.

AI impacts IT hiring trends

In the survey, 19% of the U.S. IT professionals who responded said their organizations planned to fill AI/ML and data science roles in the next 12 months, a mere percentage point behind cybersecurity at 20%. While AI and related skills rose on the list of hiring priorities, application/software development dropped from its 2023 top-ranked role to a tie for fourth place, with 12% of respondents citing it for planned hiring.

Table of top roles and positions businesses plan to fill
Cybersecurity and AI/machine learning/data science are the top roles organizations plan to fill in the next 12 months.

The ascendancy of AI and the decline of software development on the hiring wish list comes as organizations cite sizable efficiency gains from the use of AI-based coding assistants. Vamsi Duvvuri, Americas technology, media and entertainment, and telecommunications AI leader at consultancy EY, said he believes those patterns are connected.

"One of the reasons why you're seeing that shift in ranking between specific [hiring] goals is not necessarily because there is less demand for output, which is code and software," he said. "But the input, the effort and resources needed to produce the same amount of output have been heavily optimized due to all the coding tools."

EY itself has seen efficiency improvements in code development ranging from 15% to 30% from the use of AI coding tools, according to Duvvuri. Higher productivity of that kind takes the pressure off hiring in organizations, he noted.

"While companies are still hiring for those [development] roles, obviously, there's a lot of efficiency to be had with their existing workforces," Duvvuri said.

Simon Green, CIO at Pax8, a Denver-based company that provides a cloud commerce marketplace, said he views AI and ML skills as a subset of the broader field of software engineering. But to Green, it's a subset that's beginning to stand out on its own.

A case in point: Pax8 appointed a chief AI officer on June 17, a move Green said breaks out AI from the company's product and engineering department. That group, which builds the company's marketplace technology, includes software engineering among other disciplines. AI work will be managed separately now, since it could affect the entire company.

Economy influences demand for tech workers

Art Zeile, CEO at tech careers website Dice in Centennial, Colo., emphasized the economy's influence on IT hiring trends. He said he doesn't think GenAI tools and AI-driven productivity improvements are curbing demand for developer roles. Instead, the relatively high cost of technology professionals, coupled with ongoing economic uncertainty, keeps hiring in check, according to Zeile. Dice's surveys show the average technology worker makes more than twice as much as the average worker in the U.S.

That makes CFOs and CIOs think twice before hiring technology specialists, Zeile noted.

"This environment, where we are all waiting for a recession that never happened but could still happen, is creating caution across the board," he said. "That's ultimately what's suppressing hiring technology workers. It's very expensive and everybody's very cautious."

That said, AI appears to be bucking the overall hiring trend. In April, Dice reported an 8.5% year-over-year increase in the number of open AI/ML-related job postings at the start of 2024. In contrast, that same timespan saw a 26% drop in the overall number of technology postings, according to the company.

Large organizations drive the demand for AI/ML skills, Zeile said, citing Amazon, Meta and Ford as the top three companies on hiring. Consultancies that advise and provide services to such enterprises are also hiring AI/ML specialists, he added, citing Accenture and IBM as examples.

"The major business consultants are hiring because they are being asked by their largely Fortune 1000 customers to start looking at the business cases that make sense for them," Zeile said.

Bar chart showing average salaries by job role
AI/machine learning, cloud engineering and software development roles command the highest salaries.

GenAI aims for talent gap, automation

Hiring to meet AI demand isn't easy. Green said high demand makes it harder to find AI experts than software engineers, in general.

The TechTarget survey found 39% of respondents cited AI and ML as an area in which they have a problematic skills shortage, outranked only by cybersecurity with 41%.

Paradoxically, many organizations view AI as a way to address their technology skills shortages. The survey found 47% of respondents use or are considering the use of GenAI to help plug talent gaps.

Graphic showing organizations' GenAI plans and attitudes
Nearly half of IT professionals view GenAI as a tool for plugging the skills gap.

Time-savings through task automation was the most cited benefit of GenAI at 51%, followed by achieving greater efficiency at 37%.

But to achieve such benefits, organizations must train their employees to use GenAI effectively. Some organizations encounter the technology and its workforce implications within the context of wider technology deployments.

For example, Sharp HealthCare, a hospital system operating in San Diego County, is pursuing a multi-phase hybrid cloud initiative. The not-for-profit system aims to harness the advantages of the public cloud -- one of which is the ability to access AI services, said Thomas Gorrie, Sharp's director of core technologies. Sharp HealthCare hired Ahead, a Chicago-based digital transformation company, to develop a hybrid strategy that taps AWS as the public cloud portion.

The healthcare provider and its partner launched the project about two years ago. Since then, Sharp HealthCare deployed its own custom version of ChatGPT on AWS and began using HashiCorp's Terraform for cloud automation and orchestration. The environment lets Sharp HealthCare offer self-service IT infrastructure provisioning. It will also provide automated incident detection, notification and remediation response, capabilities in which AI will play a big role, Gorrie noted.

Gorrie said he doesn't expect the hybrid cloud and automation to dramatically decrease IT staffing. But the new approach will reshape the organization's tech workforce.

"The skill mix is definitely changing," Gorrie said. "People are having to learn a broader technology base. AI is going to be a significant part of the reskilling."

I think specific activities within different roles are getting automated or enhanced through AI. It's essentially morphing job functions within teams, across organizations.
Vamsi DuvvuriTechnology, media and entertainment, and telecommunications AI leader, EY Americas

That emerging workforce shift is a matter not of building a leaner staff but of deploying personnel "in a more thoughtful way," added Andy Sajous, field CTO at Ahead.

EY's Duvvuri also described AI as reshaping IT roles rather than displacing people. "I think specific activities within different roles are getting automated or enhanced through AI," he said. "It's essentially morphing job functions within teams, across organizations."

Mixed signals complicate working conditions

The TechTarget survey detected mixed signals when probing IT professionals' working conditions. While a majority of respondents reported a salary increase within the past 12 month, other forms of employee compensation appear to be under greater pressure.

The portion of IT professionals surveyed who received a bonus declined from 36% last year to 28% in 2024. Those seeing an increase in their total compensation packages, including stocks and other perks, fell from 17% to 10% -- a 41% drop on a year-over-year basis. In addition, respondents reporting a reduction in benefits more than doubled between the 2023 and 2024 surveys, from 4% to 9%.

Graphic outlining IT professionals' compensation trends
A bigger slice of IT professionals report a salary increase in 2024, but other forms of compensation took a hit.

Zeile said Dice's research also found a decline in overall compensation.

"We saw a crescendo in 2021 and 2022 in terms of overall compensation and the trends associated with benefits as well," he said. "Everybody was trying to hire technology professionals very quickly -- it was almost a mad dash for them. The natural thing was to improve the compensation packages, but now that has subsided."

Dice, which conducts IT salary surveys each fall, found average salaries were flat between 2022 and 2023. Zeile expressed surprise that compensation at least failed to track with the inflation rate.

"I think it's directly related to the economy," he said, noting that businesses are focused on profitability and cautious about any kind of spending.

Diversity programs: Maturity and uncertainty

DEI, another aspect of working conditions, also showed mixed tendencies in the TechTarget survey. The percentage of DEI efforts reaching more advanced stages increased slightly between 2023 and 2024, as mentioned above.

Bar chart describing status of organizations' DEI programs
DEI programs show signs of greater maturity.

However, 16% of the TechTarget survey respondents selected "Don't know" when asked about their organization's DEI maturity, while 14% said they have no defined DEI efforts. Those responses suggest a fair amount of uncertainty at a time when such programs face economic turbulence, budget cuts and political pushback.

Zeile, however, said he believes diversity programs, which Dice and other organizations define more expansively as diversity, equity, inclusion and belonging (DEIB), remain an important factor in the technology sector. He noted that tech professionals continue to place a high value on DEIB when considering potential employers -- despite reports suggesting organizations are scaling back on their DEIB commitments.

At Pax8, the company's DEIB effort is growing, according to Green. The initiative has evolved, however. The company has transitioned from a centrally organized program to six employee-led resource groups that aim to foster a diverse and inclusive workplace.

"It's become a part of a lot of people's roles to be involved in those," Green said.

In addition, Pax8's Beyond 2024 partner conference, held at the beginning of June in Denver, dedicated event space to the company's DEIB initiative.

Zeile said current trends suggest the incoming generation of technology professionals puts an even greater emphasis on inclusivity than their predecessors. "These individuals are increasingly willing to decline job offers from companies with poor corporate reputations or inadequate DEIB initiatives," he said.

John Moore is a writer for TechTarget Editorial covering the CIO role, economic trends and the IT services industry.

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