The Software Industry’s Shift: Why Candidates Must Embrace the New Job Market Reality
Over the past few years, the software industry has been on a rollercoaster ride, with 2021 to 2023 marking a candidate-driven market unlike anything we’ve seen in recent memory. The war for talent was fierce—employers, particularly in SaaS, were throwing everything from 20% to 50% salary bumps at sales, marketing, engineering, product, and other professionals, simply to get them through the door.
But 2024 tells a different story.
The job market has shifted back into employer territory, and candidates who fail to adjust to this new reality risk getting left behind. What we’re witnessing isn’t just a cyclical downturn—it’s a necessary correction in an overheated market that was never sustainable. Here’s why this shift was overdue, what’s driving it, and how candidates can best position themselves in today’s environment.
The Bubble That Was Bound to Burst: 2021-2023
First, let’s take a step back to understand how we got here. The post-pandemic boom years saw software companies flush with capital. Fueled by the unprecedented demand for digital transformation, remote work tools, and cloud solutions, SaaS firms aggressively scaled up, requiring an ever-growing pipeline of talent.
The War for Talent: Hiring managers were in a frenzy, with candidates entertaining multiple offers and companies bidding against each other. We’ve all seen cases where an engineer could snag a 50% pay increase by hopping to a competitor. The market was driven by urgency and a lack of available talent, not necessarily value.
Overinflation of Salaries: And that’s where the issue started. In the race to grow, many companies weren’t just paying top dollar for top talent—they were overpaying for mediocre talent, just to meet headcount goals. Salary inflation became rampant, and while it may have felt like a gold rush to candidates, it was clear the bubble would eventually burst.
2024: The Market Correction
Fast forward to today. The landscape is entirely different, and it’s being shaped by a multitude of factors:
The End of Easy Money: The venture capital tap that flowed so freely during the boom has tightened. Investors are no longer rewarding growth at any cost—they’re focused on profitability. SaaS companies are no longer in hyper-growth mode; they’re in survival mode. This shift means that hiring is now far more strategic and, unsurprisingly, cost-conscious.
Economic Pressures: We’re seeing economic headwinds from rising inflation and interest rates, along with ongoing global uncertainty. Companies are scaling back, with many shifting from aggressive hiring to consolidation and a focus on operational efficiency. They’re not just cutting jobs—they’re cutting costs, and the lofty salary packages of the past are prime targets.
Candidate Expectations vs. Market Reality: Yet, despite these clear shifts, many candidates are still stuck in the mindset of 2022. They’re holding out for compensation packages that reflect the height of the boom, not today’s reality. The hard truth is that these offers simply don’t exist anymore, and candidates need to realign their expectations if they want to remain competitive.
How Candidates Must Adjust to Thrive in 2024
Let’s get one thing straight—there are still opportunities in this market. But to seize them, candidates need to adapt. Here’s how:
Get Real About Market Rates
If you’re still clinging to the expectation of a 30-50% salary increase just by switching jobs, it’s time for a wake-up call. Compensation is a reflection of market value, and the market has corrected. Before entering any negotiation, make sure you understand what today’s rates look like. Use tools like Glassdoor, LinkedIn Salary Insights, and industry-specific data to ground yourself in 2024 numbers—not 2021 figures.
Prioritize Skill Development
It’s no longer enough to just “be in the room.” In a tighter market, candidates who invest in continuous learning stand out. Focus on in-demand skills like AI, blockchain, or cybersecurity, or pursue certifications that bolster your resume. The candidates who can demonstrate value-added expertise are the ones who will still command competitive salaries.
Flexibility is Key
Even if the six-figure salary bump is off the table, that doesn’t mean you can’t negotiate creatively. Flexibility around remote work, professional development opportunities, or equity options can add significant value to your offer. The candidates who succeed in this market are the ones who understand that the full package matters more than just the paycheck.
Think Long-Term
This market correction is painful, but it won’t last forever. Focus on landing with companies that offer stability, growth opportunities, and a vision for the future. Even if the salary isn’t what you’d hoped for, long-term career growth should be your North Star. Does the role offer room for advancement? Is there potential for salary progression once the economy stabilizes? If the answer is yes, it’s worth serious consideration.
A Market Reset That Benefits Everyone
At the end of the day, this correction was necessary. While it might feel like the market is turning against candidates, the reality is that this reset will ultimately benefit both sides. Overblown salaries and unsustainable growth models weren’t doing anyone any favors in the long run.
For candidates, this means shifting away from a short-term focus on compensation and refocusing on the fundamentals: skills, flexibility, and long-term growth. Those who adjust will still find plenty of opportunity—and those who cling to the past may find themselves left behind.
Judy’s Final Thoughts
The software industry’s job market has changed, and candidates need to change with it. While the boom years were exciting, they weren’t sustainable. Now is the time to focus on what really matters: your skill set, your flexibility, and your long-term career trajectory. The opportunities are still there, but only for those who are ready to adapt.
If you’re navigating this new job market, I encourage you to rethink your strategy, research current compensation trends, and, above all, be flexible. The road ahead may not look like the past few years, but for those willing to adjust, there’s plenty of success to be found.