2020’s Software Developer Shortage - What is the Real Story?

2020 is on track to see a major software developer shortage manifest in the United States.

This year, industry insiders expect there will be 1.6 million new software engineering job openings. At the same time, though, just 400,000 new developers will be arriving on the job market. This pattern repeats in Europe, with countries like Germany already lacking 340,000 IT specialists.

What Today’s Software Developer Shortage Means for Businesses

According to recent research by Indeed, a shortage of programmers is already affecting global businesses.

- 83% of businesses say that the current software developer shortage is impeding business growth.

- The global shortage of computer programmers is increasing rates of burnout among existing developers.

- Many employers identify hiring new developers as a major business challenge.

At the same time, though, there is also a case to be made that toxic developer hiring practices are worsening the current crisis.

How Some Businesses are to Blame for Today’s Shortage of Programmers

With software developers being in short supply, average developers in the U.S. take home a mean salary of $106,496. This is almost double the salary of most median income households. There is just one problem.

Some argue that U.S. tech companies are using the current software developer shortage, to justify replacing existing developers with foreign workers.

In 2019, US tech companies like Google, Amazon, Apple, and Facebook, were the top 10 beneficiaries of America’s H-1B visa program. However, at the same time, the U.S. Center for Immigration Studies found that foreign developers seem to be hired to replace existing employees—not fill skills shortages.

- H-1B visa developers typically earn between $91,357 to $124,009.

- Salaries are comparable to average entry-level developer salaries. However, the H-1B visa is meant for skilled workers. As a result, H-1B visa developers typically take on senior developer roles.

- Domestic senior developers in the U.S. typically make $203,194 to $208,000 with added stock and bonus benefits. This is almost double the salary of H-1B visa developers.

Firing Employees Despite Record-Breaking Revenue

As well as using America’s HB-1 visa to reduce senior developer hiring costs, some tech companies routinely undermine basic developer job security.

In early 2019, games giant Activision Blizzard reported record-breaking revenues for the previous year. However, at the same time, Blizzard announced that it was firing over 800 employees.

Less than a month later, Blizzard began recruiting for the same roles. As they did, they lowered the advertised salaries of new hires and increased the amount of responsibility attributable to most roles.

Are Tech Companies Artificially Creating a Shortage of Programmers?

There is no doubt that there is a shortage of computer programmers and IT professionals in 2020. However, there is also an argument to be made that some top tech firms are exasperating this shortage.

Reducing top-down job security results in there being less of an incentive for new developers to pursue careers with major tech firms. Instead, many accomplished developers now prefer to freelance.

- Freelance developers typically earn $76,000 to $150,000

- Countries like Romania in the EU offer several benefits to freelance developers who relocate and become part of Romania's thriving software outsourcing scene.

- Freelancing allows developers to face new challenges regularly and constantly learn new skills in the process.

There being more freelance developers on the market also benefits smaller businesses. This is thanks to the fact that businesses can more easily source top programming talent. All that businesses need to do is make sure to hire developers through leading software outsourcing companies like ourselves.