Based on data from TechTarget's annual IT Salary & Careers Survey and interviews with tech executives, artificial intelligence is increasingly impacting IT hiring plans and talent strategies, likely reshaping tech teams in the coming months and into the future.
The online survey, “2024 IT Salary and Career Report: Insights into Hiring Trends, Diversity & Inclusion Initiatives,” describes an emerging workforce in which AI skills and technology will play a larger role. More than 200 U.S. IT respondents found that a skillset combining AI, machine learning (ML) and data science has jumped from fifth to second on the list of hiring priorities, closely trailing cybersecurity at number one, which moved up one spot from the 2023 survey.
Many organizations see AI as a technology that augments their workforce and a skill that is acquired through employment. Nearly half of respondents said they are using or planning to use generative AI to address the IT skills shortage, citing increased automation and efficiency as the top benefits of GenAI technology.
Other workplace trends detailed in TechTarget's research include:
The average compensation for IT professionals in the U.S. is $165,467, up about 8% from last year's average. Compensation includes salary, bonus, stock, and perks.
Sixty-two percent said their salary had increased in the past 12 months, up from 59% last year, but non-salary compensation such as bonuses, stock and benefits have taken a hit this year.
The survey showed a slight increase in the maturity of diversity, equity and inclusion (DEI) efforts, with 41% of companies reporting mature programs, up from 39% last year.
According to the TechTarget 2024 survey, the average compensation in the IT industry increased 8% to $165,467.
AI will impact IT hiring trends
The survey found that 19% of responding U.S. IT professionals said their organization plans to fill AI/ML and data science roles within the next 12 months, just one percentage point behind cybersecurity at 20%. While AI and related skills have risen up the list of hiring priorities, application/software development has dropped from the top job title for 2023 to a tie for fourth place, with 12% of respondents listing application/software development as a role they plan to hire for.
Cybersecurity and AI/machine learning/data science are the top roles organizations plan to fill over the next 12 months.
The rise of AI and the fall of software development on hiring wish lists comes as companies cite significant efficiency gains from using AI-based coding assistants. Vamsi Dvvuli, Americas technology, media, entertainment and communications AI leader at consulting firm EY, said she thinks the patterns are related.
“One reason you might see ranking changes between certain keywords is [hiring] “The lack of reach is not necessarily due to a decline in the demand for output — code or software,” he says, “but the input, effort, and resources required to produce the same amount of output have been significantly optimized thanks to all the coding tools available.”
Duvre said EY itself has seen its code development efficiency increase by 15% to 30% with its use of AI coding tools, and he noted that such productivity gains ease the pressure for organizations to adopt them.
“Companies are still looking for such people, [development] Obviously, there are a lot of efficiencies that can be gained with the existing workforce filling these roles,” Duvri said.
Simon Green, CIO of Denver-based cloud commerce marketplace Pax8, says he sees AI and ML skills as part of the broader field of software engineering, but to him, it's a part that's starting to come into its own.
As an example, Pax8 appointed a chief AI officer on June 17, a move Green said was made to separate AI from the company's product and engineering divisions. The group, which builds the company's marketplace technology, includes disciplines like software engineering. AI work will now be managed separately because it can impact the entire company.
The economy influences the demand for tech workers
Art Theil, CEO of technology career website Dice in Centennial, Colorado, emphasized the economic impact on IT employment trends. He said he doesn't think GenAI tools or AI-driven productivity gains are curbing demand for developer jobs. Rather, Theil said, the relatively high cost of tech professionals and continued economic uncertainty are holding back hiring. Dice research shows that the average tech worker earns more than double what the average U.S. worker earns.
That's why CFOs and CIOs need to think carefully before hiring technology experts, Zeile noted.
“This environment where everybody's waiting for a recession that never happened but could still happen is creating caution on all sides,” he said. “And that's ultimately holding back hiring of tech workers. It's very expensive and everybody's very cautious.”
That said, AI appears to be bucking overall hiring trends: In April, Dice reported that AI/ML-related job postings increased 8.5% year-over-year at the start of 2024. In contrast, the firm said tech job postings overall fell 26% over the same period.
Large organizations are driving demand for AI/ML skills, Zaille said, naming Amazon, Meta and Ford as the top three hiring companies, adding that consultancies that advise and service these companies are also hiring AI/ML specialists, citing Accenture and IBM as examples.
“Large business consultancies are hiring because their primarily Fortune 1000 clients are asking them to start thinking about business cases that make sense for them,” Theil said.
AI/machine learning, cloud engineering, and software development roles offer the highest salaries.
GenAI aims to tackle talent shortages and automate
Hiring to meet the demand for AI won't be easy: Green said high demand means AI experts are generally harder to find than software engineers.
According to a TechTarget survey, 39% of respondents cited AI and ML as an area where skills shortages are an issue, ranking it second only to cybersecurity (41%).
Paradoxically, many organizations see AI as a way to address the technology skills shortage: The survey found that 47% of respondents are using or considering using GenAI to fill talent gaps.
Nearly half of IT professionals see GenAI as a tool to help close the skills gap.
The most commonly cited benefit of GenAI was time savings through task automation at 51%, followed by increased efficiency at 37%.
To realize such benefits, however, organizations must train their employees to use GenAI effectively. Some organizations may encounter this technology and its impact on their workforce in the context of broader technology adoption.
For example, Sharp Healthcare, a hospital system that serves San Diego County, is pursuing a multi-phase hybrid cloud initiative. The nonprofit system is looking to take advantage of the benefits of the public cloud, one of which is the ability to access AI services, says Thomas Gorrie, director of core technologies at Sharp. Sharp Healthcare hired Ahead, a Chicago-based digital transformation firm, to develop a hybrid strategy that leverages AWS as the public cloud portion.
The healthcare provider and its partners began working on this project about two years ago. Since then, Sharp HealthCare has deployed its own custom version of ChatGPT on AWS and started using HashiCorp's Terraform for cloud automation and orchestration. This environment enables Sharp HealthCare to offer self-service IT infrastructure provisioning. It also provides automated incident detection, notification, and remediation response, with AI playing a large role in these capabilities, Gorrie noted.
Gorrie said he doesn't expect hybrid cloud and automation to result in significant IT staff reductions, but the new approach will reshape organizations' tech workforces.
“The skills mix is definitely changing,” Gorrie said. “People have to learn a broader base of skills, and AI will be a key part of that reskilling.”
We see AI automating or augmenting certain activities across roles, essentially changing job functions within teams and across organizations.
Vamsi DvriEY Americas Technology, Media, Entertainment and Communications AI Leader
This new workforce shift isn't a matter of building leaner staffs, but deploying people “in a more thoughtful way,” added Andy Sajoo, Ahead's on-site chief technology officer.
EY's Davli also said that AI won't replace people, but will reshape the role of IT. “I think certain activities across different roles are being automated or augmented through AI,” he said. “It's essentially changing the jobs within teams, within organizations.”
Confusing signals complicate working conditions
A TechTarget survey looked at working conditions for IT professionals and found mixed signals: While the majority of respondents reported that their salaries had increased within the past 12 months, other forms of employee compensation appear to be under greater pressure.
Among IT professionals surveyed, the percentage of those who received a bonus fell from 36% last year to 28% in 2024. Those expecting an increase in their total compensation package, including stock and other perks, fell from 17% to 10%, a 41% decrease from last year. Additionally, respondents reporting cuts to benefits more than doubled between the 2023 and 2024 surveys, from 4% to 9%.
While many IT professionals are reporting salary increases in 2024, other forms of compensation have taken a hit.
Mr. Zale said Dice's research also found a decline in compensation across the board.
“2021 and 2022 has seen a high point in terms of trends related to overall compensation and benefits,” he said. “Everyone was rushing to hire technology professionals. There was almost a mad rush. Naturally, we improved our compensation packages, but now that trend has calmed down.”
Dice, which conducts its IT salary survey every fall, found that average salaries will plateau from 2022 to 2023. Zaile expressed surprise that compensation didn't at least keep up with the rate of inflation.
“I think this is directly related to the economy,” he said, noting that businesses are focused on profitability and are being cautious about any spending.
Diversity Programs: Maturity and Uncertainty
DEI, another aspect of working conditions, also saw mixed trends in TechTarget’s survey: As mentioned above, the percentage of DEI initiatives that have reached more advanced stages increased slightly from 2023 to 2024.
DEI programs are showing signs of becoming more mature.
However, 16% of TechTarget survey respondents selected “I don't know” when asked about their organization's DEI maturity, and 14% said they have no clear DEI initiatives. These responses suggest there is a great deal of uncertainty at a time when such programs are facing economic turmoil, budget cuts, and political backlash.
But Theil said he believes diversity programs, which Dice and other organizations define more broadly as diversity, equity, inclusion and belonging (DEIB), remain an important factor in the tech industry. He noted that despite reports that companies are scaling back on DEIB efforts, tech professionals continue to value it when considering potential employers.
Pax8 is expanding its DEIB efforts, Green said, but the efforts are evolving: The company has moved from a centrally organized program to six employee-led resource groups aimed at fostering a diverse and inclusive work environment.
“It's part of a lot of people's role to be involved in these things,” Green said.
Additionally, Pax8's Beyond 2024 partner conference in Denver in early June included an event space dedicated to the company's DEIB initiative.
Zale said current trends show the next generation of tech professionals cares even more about inclusivity than previous generations. “They are more likely to turn down job offers from companies with poor corporate reputations or weak DEIB initiatives,” he said.
John Moore is a TechTarget Editorial writer specializing in the CIO role, economic trends, and the IT services industry.
