Is the outlook for the software industry frightening for 2025?

Why has the technology industry been so frightening for the last couple of years, and will it improve in 2025? In this article we will outline seven reasons we think it will.

Anyone in the software/technology industry for the last couple of years would agree it’s been a very challenging market. The job reports that were published by various outlets that reported large growth numbers appeared to be wildly over inflated. They were calculating job growth primarily in sectors that vanished during COVID. Yes, we were adding jobs, but they were not necessarily new jobs, or jobs due to growth.

The recruiting industry is often a leading indicator of economic conditions. Based on what we experienced in the early part of last year, through the early fall of this year, it felt an awful lot like a recession. I’ve been through 3 recessions in my recruiting career; 1991 – 1992, 2000-2003, 2007-2009. The current, which I believe is just an extension of what was happening during COVID starting in the spring of 2020. Each one of these was caused by different factors and varied in severity.

The latest downturn was quite different from the others. This one was not consistent throughout all of tech. It seemed to have a much greater impact on Sales Leaders, candidates over 50, early-stage companies – series A through C, and IT roles. This led to unbelievably slow hiring processes causing candidates to become highly frustrated and hiring organizations to lose the best candidates. However, there are reasons for optimism. See below, the 7 reasons we feel the market will improve in 2025 and beyond.

7 Reasons why the market will improve in 2025 and beyond

1. The election will be over. Regardless of who is elected, elections always lead to uncertainty.

2. Rate cuts mean cheaper borrowing costs, which creates opportunities for tech firms to expand, innovate and hire.

3. Because of these rate cuts, venture capital firms will increase spending/seeding after two years of decline.

4. Growth periods follow recessions – nature of capitalism.

5. The need for technology is only increasing. AI, Machine Learning, Cybersecurity, Intelligence Data, Cloud and edge computing, Green Tech and Quantum computing are going to drive growth for the next 10 years.

6. Many tech companies are understaffed, leading to overworked staff. They will need to add headcount to avoid losing talent.

7. Companies that use ridiculous hiring processes (more than 4 steps), or wait for that “perfect” candidate, will be forced to improve those processes to make a hire as the number of qualified candidates in the market decreases.

Happy Halloween to you all. We greatly appreciate your readership. If you’re a hiring manager and you’re not seeing the candidates you need to be successful in 2025, please contact us to see if we can help. We’d love to earn your business.

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