2022 layoffs impacted demand and salaries for junior and nontraditional engineering candidates; Ruby on Rails is the most in-demand skill; natural language processing engineers earned highest average salaries

Hired, the leading AI-driven hiring marketplace matching tech and sales talent with top companies, today released its annual report, Big Transitions in the Tech Industry: Hired’s 2023 State of Software Engineers. Key findings include that the San Francisco Bay Area paid the highest yearly average salaries in 2022 for both local and remote engineering roles, at $180K and $176K respectively. Philadelphia saw the largest average year-over-year increase in salaries for both local and remote roles (12% and 7%, respectively).

Hired also found that remote roles commanded higher salaries than local roles, especially in smaller markets. Software engineers received a higher proportion of interview requests (IVRs) for remote roles than for local ones in 2022 across every market, except London. At the end of December 2022, remote roles in every market except London paid more than local roles.

2022 saw a wave of high-profile layoffs in the tech industry with more than 150,000 tech workers losing their jobs. The 2022 layoff period (defined by Hired to be between May to December 2022) shifted employer demand to candidates with more years of experience. 72% of interview requests went to candidates with six or more years of experience by December 2022, up from 64% in January 2022. Senior talent also saw higher salary increases than junior talent from 2021 to 2022.

During the 2022 layoff period, local salaries also showed more volatility while remote salaries flattened. The SF Bay Area had the highest salaries during the layoff period for remote roles at $180K, followed by Seattle ($175K), New York ($169K). For local roles during the layoff period, the highest-paying markets were also SF Bay Area ($180K), Seattle ($169K), and New York ($162K). Los Angeles saw the largest negative impact on local salaries, decreasing by 6% to $152K. Philadelphia saw the greatest amount of growth, with local salaries increasing by 7% to $150K.

“We’ve witnessed an incredible shift in the tech hiring landscape since we published 2022’s report,” says Josh Brenner, Hired CEO. “After significant rounds of layoffs in the last few quarters, employers and candidates alike are finding their footing for 2023.

The job reports and declining unemployment rates, however, are promising, and companies in various sectors are still hiring. It may feel more quiet than a year ago, but we’re optimistic this ‘tech winter’ is thawing. For instance, our data shows a shift in hiring strategies as more companies pursue senior candidates and certain coding skills. Most continue to prioritize remote roles, despite some high-profile companies calling to ‘Return to Office.’

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Tech workers, hiring managers, and talent professionals are wildly resourceful and creative problem-solvers. We’re here to help them navigate this quickly evolving climate to make hiring more equitable, efficient and transparent for all.”

Additional key findings from the report include:

• Despite layoffs and market volatility, engineers remain optimistic: Despite mass downsizing efforts at the end of 2022, most (68%) surveyed software engineers are not concerned they will lose their jobs in the next six months. The majority (40%) of candidates witnessed the demand for engineering talent increase in 2022 and expect it to continue through 2023. 20% more also feel it will increase, despite no personal evidence in 2022.
• But more engineers are feeling the pressure to work more hours: While 49% of surveyed candidates were not willing to work more hours to ensure job stability, 36% would if they were asked. More than half of respondents feel the push to work more hours or that the request is imminent.
• Engineers are even more adamant about flexibility and remote work – and employers agree. 39% of candidates with a Hired profile preferred only remote roles by December 2022, compared to 16% of candidates in December 2021. If faced with a mandated RTO 21% would quit immediately, and 49% would “quiet quit” by staying while looking for another job. Surveyed employers ranked “flexible work schedules” as the top benefit they’re prioritizing over the next six months, after compensation, healthcare and PTO.
• Natural Language Processing (NLP) engineers saw the highest salaries: NLP engineers experienced the highest salary growth (10% increase) compared to 2021 and received the highest average salary in 2022 ($179K/year) out of all software engineering roles.
• Backend engineers saw the highest demand: Backend engineers received 59% of all interview requests on Hired’s platform, up 3% from 2021 – higher than Fullstack engineers (56%) and frontend engineers (25%). Employers surveyed said that, if they were still hiring for engineering talent, the most difficult roles to fill over the last six months were backend engineers (41%), engineering managers across all areas (38%), and full stack engineers (27%).
• While the crypto industry has been volatile, demand for skilled blockchain engineers has held steady: the number of interviews for blockchain engineers dropped substantially from Q2 2022 to the close of 2022, but the salary for the role remained relatively level at $173K – the second highest engineering salary for 2022. In a shift from the crypto boom times of 2021, the least amount of surveyed candidates (4%) responded that they’re passionate about building products and coding for alternative currencies.
• While demand for non-traditional software engineering candidates was steady, traditional engineering candidates earned more and the wage gap widened for non-traditional candidates: Engineering candidates with traditional educational backgrounds still make more ($163K) than candidates with nontraditional backgrounds ($157K). While salaries grew YoY for engineers with traditional and non-traditional backgrounds, US candidates with nontraditional educational backgrounds now made $.96 to every dollar earned by candidates with traditional backgrounds – compared to $.99 in 2021.
• Smaller markets showed the highest demand for underrepresented (non-White/non-Asian or non-male candidates) candidates: Tier 3 markets of Tampa (32%), Atlanta (31%), and Columbus (31%) sent the highest number of interview requests to the underrepresented engineering candidates.
• Ruby on Rails was the most in-demand skill: Ruby on Rails was the most in-demand skill, followed by Ruby, Scala, and Go (2022’s most in-demand skill). Engineers proficient in Ruby on Rails had nearly 1.64X more interview requests from employers when compared to the marketplace average.
• Engineers believe AI and Python will be the hottest areas and skills for 2023: 57% of surveyed engineering candidates said that AI/ML/data science will be the sector to keep an eye on, followed by fintech (49%), and healthtech (44%). 64% of engineering candidates ranked Python as the number one programming language to master in 2023; followed by JavaScript (49%), then SQL (44%).
• Engineering managers need to be top communicators with a balance of hard and soft skills in 2023: Candidates ranked communication skills as the top skill they feel will be important for engineering managers specifically over the next six months, above leadership/team membership and building (team and/or products) skills. Surveyed employers prefer the engineering manager who excels at keeping abreast of architecture and technical changes (“The Tech Lead EM” archetype).

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The 2023 State of Software Engineers report analyzes trends in demand for skills, salaries, and work preferences from over 68,500 candidates and 494,000 interactions between employers and software engineering candidates between January 2021 through December 2022. The report also surveyed more than 1300 software engineers and 120 talent professionals and hiring managers on Hired’s marketplace.