Developer jobs under AI pressure? Number of advertised junior positions halved
The job market for IT specialists has been in a downturn for some time. Are these the first effects of the use of AI in companies or just the poor economy?
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The impact of generative AI on the labor market has been the subject of debate for some time now. The focus is now shifting to IT jobs, especially in software development. If you believe the CEOs of the big tech companies, more and more code is being generated using AI. Researchers at Stanford University also came to the conclusion in a comprehensive study that the US labor market is primarily affected by entry-level jobs. The employment of 22 to 25-year-old software developers has fallen by a fifth since the end of 2022.
The iX editorial team spoke to labor market economist Virginia Sondergeld from the job portal Indeed about the situation on the IT labor market. The interview took place by email.
According to a recent Stanford study on the US labor market, AI is displacing entry-level jobs in particular, especially in software development. Should young people think twice about starting a career as a developer?
Competition for entry-level jobs, especially in the tech sector, has become much tougher in recent years. More competition should not fundamentally deter young people from pursuing their career aspirations or passions. However, they should be aware that the job profile and requirements for developers are changing as a result of the AI revolution: away from simple programming tasks and towards strategic activities in the design of software architecture and the control and monitoring of AI systems. Those who gain practical experience with AI applications early on and undergo targeted further training will also be able to assert themselves in a more difficult market environment.
Can a similar development be observed in Germany?
Yes, we are also seeing similar trends in Germany. Indeed data shows that the number of advertised jobs in software development has fallen by around 37% compared to 2020. Entry-level jobs are particularly badly affected: junior positions fell by 54% in the same period, while the number of senior positions only decreased by 15%. However, more research is needed to isolate the cyclical effects from those of AI. Even before the widespread availability of generative AI, the development of junior and senior positions differed.
In Germany, companies traditionally like to complain about the lack of IT specialists. Can they even afford to cut junior jobs in favor of AI?
In the long term: no. Without today's young professionals, there will be a shortage of tomorrow's specialists and managers. In view of demographic change, many experienced specialists will be leaving the labor market in the coming years. A sustainable HR strategy requires offering young talent entry-level opportunities and clear development prospects. The key question here is: How can companies realize efficiency gains through AI without losing sight of their own young talent?
Can trends be identified in the general job market for IT specialists since the emergence of generative AI?
The number of IT jobs has decreased overall in recent years, but at the same time, AI skills are increasingly in demand: while AI skills are currently mentioned in around 3% of all job advertisements on the job market as a whole, the proportion in tech professions is significantly higher: for example, 26% in the area of data and analytics, 18.2% in software development and 15.7% in the area of IT applications and solutions. Skills in the development and application of generative AI are key drivers here. The IT labor market has therefore shrunk, but at the same time is developing strongly in the direction of AI specialization.
Is it possible to differentiate between the various IT jobs as to who is more and who is less affected by AI?
What can be observed in other knowledge-based professions also applies to the IT sector: the more standardized the job, the more likely it is to be replaced by AI. The more specialized and strategic a job, the less AI is currently reducing its demand on the job market. While AI can generate lines of code, developers are still needed to guide the AI, check results, identify errors and close security gaps.
Activities with a high practical component, such as the provision and maintenance of hardware, are also less automatable. In addition, the high computing requirements of AI are increasing the importance of IT system and infrastructure specialists who ensure that data centers and networks function reliably and efficiently. AI is therefore not only taking over jobs, but also creating new opportunities on the labor market.
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How strongly is the economic downturn that has been going on for several years making itself felt on the German IT labor market? More than AI?
It is difficult to clearly separate the effects of the economy and AI. During the tech boom between 2020 and mid-2022, there was massive investment in digitalization and many new jobs were created. Since the slowdown in spring 2022, job advertisements in the entire labor market – and especially in the IT sector – have declined significantly. This decline therefore began before generative AI became widely available, which indicates that the economic downturn in particular is shaping current developments. In the medium to long term, however, the spread of AI is likely to be decisive in determining whether the labor market for IT specialists will also recover when the economy picks up again. Or whether certain activities will be permanently taken over by generative AI.
Thank you very much for your answers, Ms. Sondergeld!
(axk)
