OTOH I feel we're at peak now, the investment money is drying up and management will force efficiencies going forward.
They had pharmacist as a growth career at +10% from 2010 to 2020, whole year after year, entry level and hourly payrates went down, easily verifiable by reading online forums. How can that be?
Then in 2020, they finally changed it to -3% growth, but due to the pandemic measures and people quitting the field, payrates have actually gone up.
They should be reporting changes in pay by quintile or even decile. And the new laws in CO/WA/CA/NYC requiring pay ranges in job listings should make it much easier to see which way supply and demand curves are moving in near real time.
Also, growth in number of jobs is not necessarily correlated with salary changes. You have to also consider the growth in the number of people entering that field. A PharmD used to be seen as an easy pathway to a guaranteed six figure salary (back when that was a much more rare and significant milestone). It's no wonder it attracted a lot of people into the field, which drove down salaries.
Software will probably see the same situation over the next decade or two. It seems like kids today see programming as a easy way to earn a great living, and many schools & parents are pushing their kids into the space.
I would expect it to be more biased towards employers. For example, pharmacists were complaining about only getting scheduled for 32 hours per week of work. That is a 25% reduction in pay.
They have also had to accept drastic decreases in quality of life at work, increasing their own personal liability for malpractice.
These kinds of things would only happen if the supply of pharmacists was outstripping demand of pharmacists.
> Also, growth in number of jobs is not necessarily correlated with salary changes.
For the purposes of their “job outlook” section, I do not see why it would not correlate. And not just salary, but pay to quality of life at work ratio, which is hard to define as a number.
In 2000 there were 1.2M people working in programming or closely related professions by my count. In 2021 there were 1.8M. Things are a little weird because they changed some definitions, but I think that I’m taking the stronger case.
25% growth in the US is actually slightly faster than the last 20 years.
This is a naive and pessimistic view. The software industry is much bigger than the VC bubble. See patio11s law for more details.
Uninvested VC funds are still at extremely high levels (or as those in the industry call it: dry powder) [1]. There's some sources which report that aggregate counts are down relative to 2021, but only marginally; its still higher than 2019 levels. Part of that is because of the next bullet point (low investment activity), but another big part is: the Fed printed the majority of US Dollars in circulation within the past two years.
But VC investments are way down for 2022 [2]. Near-peak money, but low investment activity. VCs are just acting more conservatively. The economic slowdown has a big part to play in this, but days go by with bullish markets, low unemployment, pressure (from the UN, most recently) on the Fed to stop raising rates, a return to QE by the BoE, food on the shelves... as they say, the money is burning a hole in their pocket, investors expect returns, and it needs to be spent. I've heard one insider say that 2022Q3-2023Q1 may be one of the best times to seek VC funding, ever.
I think you're right that "management will force efficiency". I think this is a death sentence for many tech companies, especially as we talk about bigger ones; but they'll do it anyway.
- Killing moonshots is a classic round 1 for layoffs; but those moonshots are oftentimes what drives such high ratios for these companies; buzzwordy future revenue potential that sometimes works out. Tesla isn't priced like Ford for a reason, but if Tesla pivots to start looking more like Ford; their valuation takes a huge hit. And even if that fall lands their valuation somewhere near Ford, they're in a far worse spot because Ford didn't just lose XX% of their valuation; the markets (meaning: financing) don't care where you're at, they care how you've changed (I'm picking on Tesla, but this also applies to Amazon, Google, any big tech company).
- Its extremely difficult to do layoffs (or even freeze hiring) in software orgs. Product development is already slow in most big companies; layoffs won't make it faster (or maybe they would...) The percentage of time every developer spends with ongoing maintenance increases with every employee a company hires. Every engineer at a Big Co has experienced the classic "what service handles that, ok this one, wheres it running, huh that's weird but ok, who owns it, jesus of course there's no codeowners, shit this is actually critical to X Y Z, oh its got partial ownership between this team in Asia and this team in the UK..." now imagine that dysfunction, but through the lens of layoffs.
- Any layoffs are expected to trigger a cascade effect of secondary departures. Even if a company can lay-off the right people, non-critical, newbies, etc, to keep the core business going; many people who survived are now submitting resumes elsewhere, hiring is slowed because, uh, layoffs just happened, and your company now has a red mark in every potential applicant's hitlist. There are extremely few companies, let alone tech companies, that have done double-digit-percent layoffs then came out the other end stronger. I only say this to say that: companies don't just lay off people for no reason, and very few big tech companies have financial reason to do layoffs right now (except maybe Meta).
- There's billions in capital waiting to invest in ventures that can eat some of Big Tech's lunch. If you're the head of Google, this is what's scaring you right now. Its not just the economic slowdown. Its not just the seven figure salaries you've been paying people. Its that, despite or because of all that, you may have to do layoffs, or at least cool hiring, and you have to do that while swimming surrounded by sharks who want nothing more than to give those people you laid off a few million dollars to attack a problem you trained them to be a worldwide expert in.
- And even in that environment; those huge salaries Big Tech has been paying have led to actual financial freedom for a ton of people in the software industry. Combine that with smart real estate investments or passive income and there's a significant tranche of software engineers who are biting at the bit for a bull market to come around; then retire; or maybe try an independent business (for many I've talked to, as unrelated to software as humanly possible). This trend is NOT insignificant, will become more apparent throughout 2023, and will further pressure the already hot engineering job market.
I only wall of text this to support the position that I really think this industry is fine, and growing. Software is complex. Business is complex. There are basically zero signals, right now, which communicate to me that the engineering job market won't grow over the next decade.
[1] https://www.wsj.com/articles/venture-capitals-cash-stockpile...
[2] https://finance.yahoo.com/news/venture-capital-is-seeing-a-s...
Yeah its fascinating. Its a good reason the CBs want to hike rates, reset asest prices and get back to work. :)