Last year, venture capitalists invested nearly $49 billion in U.S. startups. That’s 60% more than in 2013 and puts funding at a level not seen since 2001. According to the Moneytree Report from PricewaterhouseCoopers and the National Venture Capital Association, software firms accounted for 39% of total deal volume during 2014’s fourth quarter, making it far and away the leading sector. Biotechnology, which came next, accounted for 14% of the total. I don’t see any reason to expect those funding trends to change in the near future.
All that money is putting pressure on startups to deliver, to scale their existing offerings and rapidly create new ones which has a direct impact on the surging need for development talent. I’ve seen elevated demand for developers, especially those with some of the following skill sets:
- Dynamic programming languages like Ruby on Rails, Python and Django for mid-tier server projects
- Node.js on the server side
- Scala for efforts on the back end
The Big Data Push
Meanwhile, business continues to increase its use of data in nearly all aspects of its operations. While marketers and sales people have relied on analytics for years, today even back office departments like HR and Training are studying the numbers to identify trends in hiring, retention and employee learning.
I expect big data’s growth prospects to remain huge. Gartner says that more than 85% of the Fortune 500 isn’t prepared to effectively take advantage of its data. You can bet that number’s going to change as the year goes on. Meantime, the costs of bringing in, storing and manipulating unstructured data are coming down, providing more organizations with the opportunity to leverage analytics throughout their business. Whether they’re needed to create in-house solutions or build vendor products, I’m seeing demand for experts in noSQL and Hadoop from companies across industries and of all sizes.
The Need to Pay Up
Against a backdrop like this, it’s no surprise that compensation is rising. I’m increasingly seeing salaries for experienced developers soar well into the six figures, especially among those with big data skills.
Not only are employers dangling generous offers in front of candidates, the smart ones are paying careful attention to their current employees, awarding higher raises and bonuses to keep their top people happy and increase their odds at retaining them. Counteroffers, too, are increasingly in play.
At the same time, tech professionals have made it clear that their jobs are about more than money. Candidates carefully consider the types of benefits they’re being offered, with flexible schedules and, increasingly, unlimited time off growing in popularity. In addition, more of my clients are offering the chance to work from home, taking advantage of the range of tools that allow teams to work virtually by providing everything from document sharing to online meetings.
Coincidentally, those capabilities allow organizations to cast a wider net in their talent search. Employers based in tech hubs like San Francisco, NY and Boston, where the skills shortage is especially severe, are now looking to secondary markets to find the candidates they need. While that’s happened before, today the new hire can work remotely, thus sparing everyone from the expense and hassle of relocation.
The Employer’s Challenge
To me, the key to meeting such challenges is to understand the market for talent as well as you understand the market for your products and services.
The candidates I talk to recognize that they’re in demand, consider their lifestyles important and are attracted to companies with a clear sense of purpose. To engage them, recruiters, HR departments and managers must be ready to sell the advantages of their company and move quickly while they do it. Long and complex hiring processes can be a potential roadblock to securing top talent at a time when they are receiving overtures from numerous companies.
The bottom line is the market has continued to heat-up. During the last recession, the economy seemed tenuous and investors were hesitant, today the technology world is growing on a foundation of demand from both consumers and businesses. While skeptics talk of bubbles, tech is serving customers who are paying real money for real products. For as long as that continues, professionals who have the skills to make things happen will come at a premium.Candidate experience | Hiring top talent | Hiring trends | Interviewing tips for employers | Software | Startups | Technology