Will developer salaries drop after lockdown ends?

The imbalance between supply and demand in the tech skills market is so extreme that salaries have kept climbing year after year, especially for hands-on engineers with a recognized degree and one or more successful experiences under their belt.

Because of lockdown and the public health crisis, many companies have been forced to shut their doors, triggering mass bankruptcies. Their suppliers find themselves with fewer customers and unpaid invoices, which compounds the damage and causes an inevitable economic slowdown that doesn't spare startups in the hardest-hit sectors like tourism, hospitality, events, and B2B services.

This leads to:

• a hiring freeze,
• an increase in layoffs,
• fewer employers, and therefore less competition for candidates

This could well mark a halt in the salary surge among tech players.

That said, many sectors are barely affected and are even strengthened by the crisis. Banks and insurance companies happen to be the biggest buyers of tech skills, and the crisis is boosting their activity, which will need to adapt to new ways of working — for instance by ramping up security and putting their information systems online for both employees and end users. On the insurance side, risks are changing and offerings will need to evolve. This forced transformation can only reinforce demand for digital skills.

During the first week of the crisis, every company had to adapt its organization to remote work. Lockdown strengthens the position of companies that build tools enabling remote work, streaming services, SaaS, medtech, and any company stepping up to provide solutions during the health crisis. All of these companies will come out stronger, and therefore better equipped to weather the financial crisis that will follow. These privileged few may have the chance to be among those that still have the means to secure the best talent. We'll see whether there are enough of them to keep the market tight.

Even though the deck is being reshuffled, startups are arguably the best-equipped companies in principle, since they exist precisely to figure out how to survive in a market. This crisis will reinforce investor confidence in the most profitable projects and in business models that have proven their resilience.

On the supply side, developers and other digital stars are thinking harder before changing jobs and are already much more selective about the financial soundness of the companies trying to attract them. Full employment in the digital world shows once again that trained, skilled tech profiles still have the upper hand in the market. And since salary growth will remain a timeless topic, you can go further by checking out our recommendations for growing your developer salary.