Declining IT job market in 2022

The IT job market is rapidly cooling down and it’ll become more difficult to switch jobs in the coming months.

During late 2020 and throughout 2021, the job market was super hot. People were able to grab multiple offers. They could get insane salary hikes, ranging from 50% to even 200% in some cases, which wasn’t the case before the pandemic.

It was happening because of the excess money printing by the Central banks around the World to ease the economy and help recover from the effects of the pandemic. Due to this easy supply of money, companies were able to get more funding to hire more people for their new initiatives.

Also, the digital transformation wave of all organizations accelerated during the pandemic. Hence, the demand for skilled IT employees skyrocketed.

During this time, there was also a shortage of skilled people. Hence, the companies were competing fiercely to find the best talent by offering lucrative job offers. Due to this, the attrition rates in IT companies began to increase and big companies were finding it difficult to retain talent.

What happens when too much money is under circulation?

When too much money chases limited resources, it leads to INFLATION. The US has recorded a 40-year high inflation rate of more than 8% (the normal inflation rate is 2%). The European countries are also going through high inflation. So the Central banks around the World are now tightening the supply of money by increasing the interest rates.

This reduces the demand for goods and services in the economy which eventually leads to a recession. Along with inflation due to money printing, the Ukraine-Russia war and Zero Covid lockdown measures in China are causing supply chain disruptions that are causing the prices of commodities to increase.

So the profit margins of the companies are also getting hit leading to lesser profit. Hence, the companies are trying to cut costs wherever possible to protect their margins.

All these macroeconomic factors are contributing to the cooling down of the IT job market. Some big Indian startups have already laid off a considerable chunk of their tech workforce this year. Many companies are undertaking hiring freezes. Hence, it’s becoming difficult day by day to switch jobs in the IT field.

So how to secure a good job offer during these difficult times?

• Ensure you up-skill yourself. Try to become the best in whatever skill you’re working on.
• Grow your network. You’d be able to get information through your network about jobs that aren’t even posted by the company online.
• Try to give the best performance in your projects so that your current company would never want you to leave them. It will help you in getting a good counteroffer (if you still want to stay).

I’m writing this post to create awareness about the current macroeconomic situation and its correlation to the job market. This will help you be better prepared to handle such circumstances.

Let me know your thoughts in the comments!

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