So, you have done everything right so far. Created a perfect job description, made your company stand out from the competition as to why someone should work for you instead. You have posted the position to all the relevant job boards and social media pages. All of that and you still are not getting qualified candidates to apply. You may have missed a very crucial step, in fact, the very first step you should take when you are considering bringing on a new team member. The step?…labor market research. I did some for you!
A comparative analysis from 2020 to present of the Information Technology industry shows that the cost of labor for IT professionals has been steadily increasing. The data from the U.S. Bureau of Labor Statistics shows the median annual wage for computer and information technology occupations was $91,250 in May 2020. Fast forward to the present, where industry reports show the median annual wage for computer and information technology occupations in 2024 is estimated to be over $100,000.
As technology continues to evolve and permeate every aspect of modern life, the demand for skilled IT professionals has surged, driving up labor costs significantly since 2020. In 2020, industries faced many challenges, including the COVID-19 pandemic, which triggered businesses to accelerate their digital footprint to attract and retain customers and employees alike, they had to adapt to remote work, online commerce, and virtual collaboration tools. Because of this, emerging technologies such as cloud computing, cybersecurity, data analytics, and basic IT support have led to a increased demand for specialized IT skills.
The cost of labor for IT professionals in 2020 varied significantly depending on many factors but one of the big ones was location. For instance, IT professionals in larger cities and tech hubs commanded higher salaries compared to their counterparts in other regions. The trend of remote work has expanded the talent pool for companies beyond geographical boundaries. But this has also allowed job seekers to negotiate higher salaries and better benefits as geographical barriers no longer limit job opportunities. Companies competing for top talent are offering remote work options along with competitive compensation packages are going to attract the best candidates.
We also cannot ignore inflation. According to officialdata.org, the US dollar had an average inflation rate of 6.34% per year between 2020 and 2021, producing a cost increase of 11.56%. 8% in 2022 and 4.12% in 2023. The data shows that every American would have to earn 19.17% more today than they did in 2020 to maintain the same level of purchasing power. Remember that median wage of $91,250? Without any of the reasons I stated about the rising labor cost, that wage would be worth $108,742 in today’s market. According to Glassdoor.com, the average Level 1 technician earned $46,524/year in 2020. My calculations would put that same tech earning $55,442 in the year 2024, and the folkx at salary.com agree.
Now that you are armed with these facts – demand for IT professionals increasing, the lessening of geographical barriers influencing pay, and the desire to maintain purchasing power – it may be time to do some more research into what you are willing to pay compared to what you are expecting from the perfect candidate. Review what you were paying for this position in 2020. Are you anywhere close to that 19.17% increase? Can you be? If not, you might not have increased your prices enough to keep up with the market but that’s a conversation for a different time.
