The COVID-19 pandemic seems to be the straw that broke the camel's back in a number of different ways (supply chain issues leading to shortages, labor shortages leading to increased worker wages, even.. "Cottagecore"). By now this is completely unsurprising to our clients, but one result may not be yet: One of the most impactful results will be the rapid increase in the cost of software development.

I recently read an article, The Perfect Storm Causing an Insane Tech Hiring Market, which outlined a number of reasons for this. I'd like to summarize the article, though I do recommend reading the article itself (it's behind a paywall).

As an aside: I want to set the stage for just how insane this market is. A developer with less than 3 years' experience was recently offered $230K ($160K base, $70K stock) by Reddit, a Silicon Valley company. This is not the norm, but to a software developer these days, it's only surprising, not jaw-dropping.

It lists a number of factors:

  • companies are accelerating their digital transformation not just to operate, but also to sell their product;
  • projects that companies held off on in 2020 are getting started in 2021;
  • remote work means that all companies are competing with Silicon Valley to hire developers;
  • many developers with 20+ years of experience are leaving the field due to burnout and other factors.

Why not hire someone fresh out of college? According to the article, many developers with < 3 years experience aren't finding jobs because companies are looking for people with a proven track record of remote work. It's hard to onboard a junior developer without working together in the same physical space. So while many people have caught on that software development is a great career and the supply of developers is actually increasing, the demand for those new developers is not (currently) increasing.

What to do about it? #

Two harsh realities stand out from the article: 1. software companies need to raise developer wages, and 2. companies should only make what software they have to and buy everything else.

If you plan to hire a developer directly, realize that you're going to be competing with companies that offer unlimited vacation, amazing health benefits, large salaries, generous bonus packages, equity incentives, and very flexible work-from-home policies. In other words, you're going to be competing with software companies.

It's time to take a long, hard look at your software make/buy decisions. I know we are, and we're a software company!

About the author…

Jimmy Thrasher is CTO and co-owner of SuperCat Solutions, a software development and sales enablement services company based in North Carolina. He’s a software engineer graduate of NC State University, has over twenty years experience architecting and writing software, and has no plans to leave the field in the immediate future.