A Founder's perspective
The last four or five weeks have been a blur of reacting to unexpected and unprecedented events for all of us. Here at NSS, we’ve been updating you weekly on our response to the coronavirus and the associated lockdown. At this point we feel like we’re getting to a point where day-to-day life has stabilized a bit for our students and staff - we’re getting used to seeing each other online every day, to working from home, to a different rhythm of work and life. It doesn’t mean we’re liking it, but we are adjusting to it.
So now it’s time to lift our gaze. We need to stop only looking at how to react in the moment to what’s happening around us. We need to look into the future and try to anticipate and plan for what will, and may be, happening in the next weeks and months as we move towards summer, look ahead to the fall, and anticipate year-end.
To my mind, it means looking at three big questions:
- What does it look like to be able to come out of the lockdown? It looks unlikely that it will happen overnight, unlike the move into the lockdown. It’s also unclear if we will need to go back into a lockdown come fall or winter, depending on the course of the coronavirus. This is a big issue and one we are actively planning around and will be talking about here over the next few weeks.
- What will enrollment demand look like from prospective new students over the next few months? On one hand, it may be a great opportunity for people to leverage the economic downturn and some of the financial resources that are being made available and learn new skills required for a new career (or to upskill/reskill in an existing tech career). But on the other hand, will people seek to do this in such an unpredictable and fluid situation? Historically, economic downturns have seen increases in demand for vocational skills training, but will we see it this time? And how much will demand be influenced by how people perceive the short-term state of the job market for tech jobs?
- And that’s the third big question - what is job demand going to look like over the next six to twelve months for tech roles such as software developer, data analyst, and data scientist? That’s the question we want to talk about in this blog post and one I’m sure we’re going to revisit several times over the next few months.
What’s job demand going to look like?
As of mid-April there’s a lot more that we don’t know than we do know about the job market over the rest of 2020 and into 2021. We’re so close to the start of the coronavirus lockdown, and there’s so little known about what the process and timeline of coming out of the lockdown, that companies just can’t be clear yet about how their hiring plans have changed for the remainder of 2020. Heck, a lot of the folks that we have talked to aren’t sure about second quarter plans right now.
We do know that some companies have had layoffs that included developers or data analytics staff. So far, that appears to be a minority of the major employers of tech talent in Nashville with notable exceptions in companies tied to entertainment, events, hospitality and food service. What is more pervasive right now are companies that have frozen all hiring for new or replacement positions. Some of these companies have said that the hiring freezes are temporary - that they need to get greater clarity on how the lockdown is going to unwind and over what timeframe. In the meantime, they have frozen hiring, which is only prudent. We believe that most of these companies are reassessing their plans for this year and trying to decide how serious their organization is impacted by the coronavirus based on when the lockdown can start being reversed.
We think that a lot of companies will take another month to two months to monitor what’s happening, reassess their plans, and reformulate their hiring plans for the year. Then we’ll start to see some improvement in the hiring environment. But I think we have to expect that hiring that was expected to happen this quarter and next will (on average - specific companies will vary significantly) get spread over the rest of this year and even into the first half of 2021.
And then there are some companies that have already said that they are not slowing down hiring, that they don’t expect their plans for the year to invest in software development, data science, and digital transformation projects to be disrupted in any major way by the coronavirus. I believe that the first category of company - the ones that have already laid off people and are really locking down and trying to survive account for no more than 20% of the tech jobs that would have opened this year in Nashville. My best guess is that the third category, the ones that are for now still full steam ahead, are maybe another 20%. And the other category, the ones that have suspended hiring or are going slow during the second quarter while they assess and re-plan the year, are a full 50-60% of 2020 new tech hiring.
All of the above means we’re going to see a real slowdown of tech hiring through at least mid-year. Somewhere around mid-year, assuming that we unlock the economy in May and June, we’ll start to see a recovery in terms of more and more tech jobs starting to get posted. But I have to believe that overall tech hiring in Nashville in 2020 will be somewhere around 65% (with a fairly large margin of error) of what it would have been. I haven’t seen any hard data in the form of surveys or research to support this guess - it’s based mainly on about 15 years watching the tech job market in Nashville and 50 years of more general experience in seeing how tech hiring is impacted by recessions of various sorts.
All of this means - and this is purely a best guess - that the average job search time for NSS grads coming out of school during the first 8 or 9 months of this year, will increase quite a bit. We’ve just experienced 18 months or more of the shortest average job search times that we have ever seen for our graduates. Median job search times for our grads for the last 18 months (at least) have been comfortably less than 90 days after graduation. That’s clearly not going to be the case in 2020. I would not be surprised to see median job search times ranging up to 120 - 150 days after graduation. It might even get worse than that for a quarter to so. That’s not great news - but we’ve also been a bit spoiled by the incredible growth in the tech job market in Nashville over the past five years or so.
So what are we going to do to support our recent graduates, and all of the current students who will become graduates over the next few months? It seems clear to us already that only continuing to do what we do today to support grads, what we’ve done over the past eight years or so, is not sufficient for the unprecedented situation of 2020. We are currently evaluating options that include ways to keep our recent graduates coding through projects for non-profits and adding skills through post-graduation workshops, seminars, and other learning options.
It’s my firm belief that the mid-term to long-term prospects for tech careers remain very strong. The long-term trend has been “up and to the right” for software development jobs, data analytics jobs, and other tech careers for 50 years except for two or three very short interruptions during prior recessionary periods. The last such period was during the tech recession following the bursting of the (first) internet bubble back in 2001 through 2003 or 2004. That was the longest disruption of tech job growth in my memory, which goes back to 1970/71 and the start of my career.
Over the past twenty years or so, certainly from 2004, but with roots back in the 80s and 90s, the tech job boom has been driven by the long-term trend captured in Mark Andreessen’s well-known quote: “Software is eating the world”. Digital transformation, to use one of the current buzz phrases, is a fact of life in every industry and every organization. And digital transformation rests on the work of creators that work in and with software and data. Digital transformation depends on an ever-increasing supply of individuals with the skills for creating software-based solutions to business and society’s challenges and opportunities. Various studies published by market researchers, the U.S. Dept of Labor, have all projected that into at least the mid-2020s we will continue to create far more job opportunities in these fields than colleges and universities will produce degree-holders trained in these disciplines.
Will a recession triggered by the novel coronavirus slow down this growth in jobs for a while - certainly it will. But for how long and how deeply? If you have the opportunity in the short term to acquire those career skills and prepare for making a career transition, should you take the opportunity now vs. wait until there is more clarity? I’m sure the answer depends on a great number of factors and will vary depending on the individual, but these skills will continue to be in great demand in the economy of 2025 and 2030. And if you do wait until everything becomes clear - will the opportunity still exist for you at that time?
While no one has a crystal ball, one thing is for sure, we are committed to supporting all of our graduates in the search for their first job in tech, no matter how long that may take in today’s environment.