Before COVID-19, unemployment in the technology sector was at a five-decade low and was far lower than the overall U.S. unemployment rate. Though unemployment has risen for some parts of the technology sector as the pandemic has gripped the country, companies are still hiring for other roles. Job postings for web developers and applications software developers, for instance, increased from March to April this year for remote, work-from-home positions.
In April 2020, the unemployment rate for those with an occupation in information technology rose to 4.3%, according to the U.S. Bureau of Labor Statistics and information technology association CompTIA. The unemployment rate for such IT roles has more than doubled over recent months amid the pandemic, but is still more than three times lower than the overall unemployment rate in the United States.
Even though nearly every April 2020 IT job posting was for a work-from-home position, some were for permanent work-from-home roles. The April decline in permanent remote job postings was much less than the decline in general tech job postings. We anticipate that more IT roles will offer work-from-home positions in the future.
Tech goes even more remote
Even before COVID-19, large portions of the technology workforce were partially or fully remote. Twitter made waves in May when its CEO Jack Dorsey told employees that they will be allowed to work from home indefinitely. Also this month, Facebook CEO Mark Zuckerberg said during a livestreamed staff meeting that many employees will be able to work from home permanently, The New York Times reported.
“It’s clear that (COVID-19) has changed a lot about our lives, and that certainly includes the way that most of us work,” Zuckerberg said. “Coming out of this period, I expect that remote work is going to be a growing trend as well.” He expects that by the end of this decade, half of Facebook employees will work from home, according to the Times.
History has shown that technology industry trends that originate in Silicon Valley often foreshadow what is ahead for many middle market tech companies across North America. The early sentiment about the work-from-home trend during this pandemic is no different, and we anticipate that more middle market technology businesses will provide remote options for a larger portion of their workforce.
As more technology jobs go remote, employees who live across North America will not all be able to command the same pay as those living in Silicon Valley. This is likely a positive trend for middle market technology companies, because many tech workers in Silicon Valley still do not earn enough money to be able to buy a home there. If technology workers desire a lower cost of living and the ability to become a homeowner, they may be able to achieve that in one of the many emerging tech hubs across North America. This could lead to better geographic distribution of top technology talent.