The following text analyzes the 2024 state of the tech industry from the business, programming, and HR perspective. The article is not meant to estimate or bring conclusions on the topic, but to summarize the situation in the field from different angles and viewpoints (with a high focus on the USA and European markets).
The article is based on the validated findings of the latest analyses of the industry (researches/stats), including social aspects and generation differences as something that affected the way the industry handled the challenges of 2024, as well as employees' behavior, understanding, and approach to work in general.
Another aspect is the enormous potential of artificial intelligence (AI) and machine learning (ML) that influences the IT industry's core. Directions are yet to be seen, but they are undoubtedly making the IT industry adjust its business models and strategies. Companies that are uninterested in following the present situation on the market have already felt some level of consequences. In addition, startups began decreasing their development due to a lack of investments, unrealized agreements, and unreasonable expectations, particularly in challenging economic climates where funding is short and growth projections are overly ambitious.
The conclusion is rather positive, or at least presented in a positive tone. It emphasizes the importance of flexibility, openness to change, quick reactions, and short-term decisions. Risks are becoming more frequent, forcing companies to place their business in challenging situations to protect their employees and partners.
Every industry, business, and leader - whether a manager, entrepreneur, or CEO - faces and fights daily challenges with a great passion for keeping their business stable and successful. Each decision is carefully and thoroughly planned, ensuring that every step aligns with the company’s values and goals.
But what happens when a rush of changes and (un)expected factors disrupt the set harmony, leaving one wondering - what now?
Over the past few years, especially 2024, the world has been navigating one of the most challenging periods on all levels - economic, financial, and technological. Automation, AI, and generative AI gained enormous attention and played a necessary role in elementary business processes in 2024. Next to the trembling atmosphere in the IT industry, others, such as retail, fashion, healthcare, finance, construction, real estate, and food producers were no less affected. If any of the businesses were figuring out how to sail through the year, they were definitely not alone.
According to the Deloitte 2024 survey on the tech industry, leaders described the state of the industry as innovative and evolving, with 62% believing it was a good time for their company to take greater risks. Naturally, some of the biggest names on the market did increase their spending on AI technologies by 52% compared to the previous year.
When it comes to automation, 71% of respondents reported that network and software-as-a-service (SaaS) tasks were partly or completely automated, with industries like energy, government, and education taking the lead. Simply said, companies that want to grow their businesses cannot afford to put automation on hold or simply ignore it. Still, it is important to note that recognizing the potential and excitement that come along with innovations doesn’t necessarily guarantee immediate success.
Comparing various regions, many report they had to redirect their strategies and take rigorous cost-cutting measures. Many tech roles were replaced by AI, which resulted in reducing the demand we used to see in outsourcing. Following significant workforce reductions in 2022 and 2023, 2024 saw more than 150,000 job cuts across 542 companies. Large companies like Tesla, Amazon, Google, TikTok, Snap, and Microsoft conducted sizable layoffs in 2024, while smaller-sized startups also experienced cuts, and in some cases, shut down operations altogether.
Even though some expect global outsourcing to grow in billions by 2027, 75% of US companies admit having a struggle to find skilled talents no matter the current possibilities of an AI. In reality, companies need specialized and skilled industry-oriented partners and professionals and avoid investing in long recruitment processes or finding the right talents.
Meeting reality, necessary alignments with the new boom in the tech sector started to show in 2024. Suddenly, we cannot remember the time without using the assistance of LLMs (Large Language Models). One survey discovered that around 80% of software engineers use LLM daily such as ChatGPT, GitHub Copilot, Gemini, and Claude. On the other hand, we are seeing many companies integrating AI assistants into their applications to enhance user experience and productivity.
This said it is understandable that the great shift directly affected engineers and their approach to the industry. Those proficient in Python, .NET, and Rust turned out to be the lucky ones, as these technologies align closely with both industry and AI demands.
Secondly, there is an ongoing global debate on whether AI will replace software developers and to what extent. Asked about their opinion on the topic for Brainhub Research, nearly 30% of the 550 developers surveyed said they believe that their development efforts will be replaced by AI in the near future. Either way, their flexibility, especially with the tech stack, is expected to remain at a high level.
If not building LLMs themselves, developers are now expected to know how to work with them efficiently and strategically. Open-mindedness and willingness for constant improvement and building are values each employee will highly appreciate in the following years.
The last two years were turbulent for developers, but interestingly uneven across the world. Based on the JetBrains research, more than 50% of the respondents were not directly impacted by layoffs, though 30% felt the indirect effects, and 16% lost their jobs.
It seems like recruitment teams have taken a big breath after years of figuring out how to reach and attract adequate engineering profiles to change working places or even dedicate themselves to short-lasting external projects. We remember 2020 being a global nightmare, but when it comes to technology, new opportunities have arisen after the crisis began to weaken. Digital transformation across industries, and the enormous demand for engineers of various levels, all wrapped up in flexible working hours, and hybrid or remote working models, faced the HR teams with a talent shortage and high hourly rates.
Expectedly, the abnormal pressure had to weaken at some point. Focusing on the tech sector, 2023 was marked with over 262,000 employees laid off worldwide across more than 1.180 companies. The downfall has continued in the first quarter of 2024, with over 57,000 employees being laid off.
Considering the challenging circumstances during the first two quarters of the year, sales teams had to focus on developing strategies for improving lead outreach and strengthening existing partnerships. Many companies have dedicated their resources to on-site onboarding and enhancing collaboration with top management sectors.
Due to the industry setback affecting the entire industry, the number and diversity of inquiries received has been significantly reduced. The outsourcing companies reported inquiries that came from ongoing businesses that needed support scaling up or maintaining already developed processes. There were fewer requirements for full-cycle projects that included all the steps of development - from planning, development, project management, and maintenance. This isn’t surprising, as only 1% of IT professionals outsourced all their IT services to only one client at the beginning of the year.
In 2024, the Inviggo team has been dedicated to a full-cycle project in the fintech industry.
Based on our internal research and discussions with matching and partnering IT companies, we have recognized the same or similar challenges their businesses have faced in recent months.
When discussing the situation with developers, the most commonly heard one-word describing the situation is challenging. Their main focus during 2024 was on securing their positions, improving their skills, and expanding their technical knowledge, especially in technologies that come in favor of AI.
Experienced software engineers have become the top drivers of growth for clients, with cloud and data scientists, and cybersecurity experts taking the lead. The pressure of AI implementation and the shortage of skilled professionals have created a demand for senior engineers with four to five years of experience, capable of contributing with high productivity and independence. Some global examples that highlight the even larger wave expected in the coming years include McKinsey, IBM, and Accenture, which are filled with AI-related engineering positions. These trends serve as indicators that this demand will continue to grow in the future.
Within the HR sector, professionals are reporting a rising number of employees voting for flexible working hours, a four-day workweek, and the option to work from home, all pointing towards “less work”. In Serbia, 23% of remote workers would accept a pay cut to keep the work-from-home benefit. Adding to this, a significant number of adults in the UK are out of work and not actively seeking employment, with long-term illness being the main cause. At the same time, Amazon is pushing for their employees to work 100% time in the office five days a week.
According to the Serbian IT Association, 61% of IT companies have faced the need to downsize their teams, with 27% of companies reducing their workforce by up to 5%, and 34% reducing it by more than 5%.
On the other hand, some companies report successfully expanding their teams and increasing resources.
If we look back on the challenging first part of the year (Q1 and Q2), we can say we were careful and in deep focus while responding to our clients with quick and effective strategy planning. Our wide experience has helped us respond to ad hoc changes as well as firmly navigate through the sudden requirements of our clients and partners.
Due to the variety of technologies and expertise our team has covered for more than 4 years, we were able to operate with the most in-demand technologies. These include React.js, Next.js, React Native (frontend), and Node (Express, Nest), Go (backend). Still, it is important to highlight that the clients are consistently requesting Data and AI positions due to the nature of the industry modifications, so it is no surprise we are receiving requirements for these positions daily. Being actively involved in healthcare, fintech, retail and e-commerce industries, we are sure this is only the beginning.
In addition, our HR team has been selecting engineers dominating AI, ML, and Data, recognizing the increasing demand for professionals with advanced skills and experience in these areas. We had to respond swiftly to the evolving call for new positions able to resolve challenges at medium to senior proficiency. The selection processes were thorough and tailored to our clients’ needs and the complexity of projects. Being reviewed by our partners as a fair, dedicated, and responsible IT outsourcing partner, we stayed committed to our goal of delivering high-quality and cutting-edge solutions.
On the other hand, understanding the risky situation of the 2024 rollercoaster, our HR team has decided to keep its values on top and focus on keeping the team stable. This meant reducing out-of-office activities to keep the crucials in focus, for the best of our team and business in general.
As some people believe, there is always a light somewhere at the end of the tunnel. Today, we are proud to say we have found our in a collegial spirit, patience, mutual support, constant motivation, and many, many reviews of the past, present, and future decisions.
Despite the growing demand for AI implementation across various levels of business and the fact that companies are increasingly integrating AI into their processes, the IT industry is witnessing a clash between machine-generated work and the power of human efficacy.
The truth is, that generative AI cannot replace the quality, uniqueness, and dedication one company can gain from fairly and professionally selected teams (human beings). We have seen an enormous leap in demand for senior engineering positions adding to the major lay-offs that negatively affected junior and mid engineering positions in different IT sectors.
Just as various personalities bring different dynamics to a team, different generations, the quality of goal-oriented approach, teamwork skills and levels of tech knowledge can, and often do offer diverse perspectives, experiences, creative ideas, and, most importantly, simplicity and excellence in problem-solving-oriented ways. Adding to this statement is the fact that 72% of organizations in the IT services and software industries reported they have planned to increase IT budgets in 2025.
Many thanks to all who have contributed to our survey and to those who have allowed us to share their unique experiences within this article (Milica Bojčić, Danilo Papić, Ognjen Gatalo, Slobodan Prijić and Miroslav)
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