As recently as August, Apprenti was on track to have a banner year in 2023. The nonprofit tech trainer already had corporate commitments for 1,600 apprentices and was likely to hit 2,000—double the number it served in 2022.
But by October, commitments had dropped by two thirds. And that was before tech giants Meta, Amazon, Cisco, and Twitter each shed thousands of jobs.
“So you can imagine that’s devastating for this year,” says Jennifer Carlson, co-founder and executive director.
Currently, companies are on board for about 750 apprentices from Apprenti, and Carlson expects to work back up to 1,000—bolstered by increased commitments from large companies in financial services, healthcare, and higher education that aren’t in tech per se but have a huge need for technical roles.
- In a typical year, Apprenti places about two thirds of its apprentices in tech companies and a third in non-tech ones. This year, it will be closer to 50-50, Carlson says, or maybe even the inverse.
“They’re picking up momentum and growing numbers,” she says of non-tech companies. “They understand this is going to be a long-term hiring strategy—that this tech shortage isn’t going away.”
The big idea: Apprenti, as one of the largest tech apprenticeship providers in the country, may well be a bellwether not only for the apprenticeship market in the coming year but for all alternative pathways into tech jobs. Apprenticeships and other tech training programs outside of traditional college have been buoyed over the past few years by a historically tight labor market, huge and growing demand for workers with software engineering and other computing skills, and a new urgency about long-standing challenges with diversity and equity in tech.
This current moment stands as a test of whether those alternative pathways to good tech jobs will continue to grow, even in the face of new headwinds.
Data provided by Lightcast, a major labor market analytics firm, show that job postings in the broad category of software developers—which many apprenticeships, bootcamps, and on-ramp programs target—began to slow in May.
- Unique job postings peaked that month at about 117,000 and have fallen since, dropping to about 77,000 in December. That’s well below the average monthly postings, of 95,000, for the past two years.
And this isn’t just a seasonal blip. The past two years, postings have remained strong into December, according to the Lightcast data. The firm’s data also indicate that recruiters are searching less intensely for the roles they do have open—with what Lightcast calls “posting intensity,” a measure of how many times a company has advertised for a given job, hitting lows not seen since the early shocks of the pandemic.
But whether this spells a slow down for non-college routes into tech is an open question. As companies and workers navigate this shifting reality, experts agree that two factors will loom large:
- An increased proportion of hiring for tech roles will be at non-tech companies. The education providers we spoke to, including Apprenti, Merit America, and LaunchCode, are still seeing strong and growing hiring of graduates for financial services, healthcare, education, automotive, and defense.
- Corporate commitments to diversity, equity, and inclusion—and the potential brand damage—will have to be a bigger consideration than they were during the Great Recession or the burst of the Dot-Com Bubble. Whether the resulting rhetoric aligns with reality remains to be seen, as Michael Collins, vice president at JFF, asserts in a new Q&A.
“We are living a tale of two labor markets,” says Lisa Lewin, CEO of General Assembly, “with hiring freezes and layoffs on one side and a growing demand for tech talent on the other.”
Temporary setback or change in trajectory?
A big question is whether the hiring reset we’re seeing will change the longer-term trajectory of nondegree hiring. Lili Gangas, chief technology community officer at the Kapor Center, expects layoffs and hiring freezes to work through the market in a way that especially hurts people who are new to tech or taking a non-college pathway.
“It’s going to be very difficult for the talent that has to compete against more experience—and from a salary standpoint, we’re going to see some reframing,” she says.
That reset, Gangas expects, will be most pronounced at tech companies but will also shift the supply-demand balance in financial services, retail, healthcare and the like. Others expect longer-term trends to prevail even now.
Trend data: Employment for software developers was expected to grow 25% between 2021 and 2031, adding more than 411,000 jobs, according to projections from the Bureau of Labor Statistics. Savvy companies outside of Silicon Valley, which is particularly sensitive to interest rate hikes, may see this as a buying opportunity.
Federal and state agencies also continue to invest in developing new pathways into good tech jobs, including software development and IT, broadband, and hardware manufacturing and design. Apprenti has a $23.5 million grant from the Good Jobs Challenge to develop an apprenticeship program across 11 regions in partnership with Amazon Web Services and Boeing. It’s in design now and slated to start up in 2024, Carlson says.
Thus far, tech talent who have been laid off appear to be landing elsewhere. Mina Theophilos, for example, was apprenticing at Wayfair as a business analyst when he was laid off this August. He turned to Apprenti, where he trained, for support and by December had started a new role as an IT analyst apprentice at Harvard University.
That aligns with the experience of Henry Gage, a graduate of Merit America’s IT support program. He was under consideration for a job at Cisco earlier this year when hiring for the position was paused. The job as a support operations specialist ultimately opened back up, however, and Gage got it.
“With everything that’s going on in tech right now, I think that’s just a normal part of human life,” he says. “If you want to be here, you’ve got to bend and adapt.”
The tech industry isn’t the tech market
It’s clear that tech companies are leading the retreat in hiring. The sector is on pace for the most layoffs this year since 2002, according to the talent firm Challenger, Gray & Christmas. But not all the layoffs and hiring freezes are impacting technical roles—with many targeting jobs in HR, marketing, and other business departments.
And tech companies are just a slice—albeit big—of the employer market for software developers, data analysts, cloud operations engineers and the like. The New York Times, for example, recently talked with Walmart and other big employers in retail, healthcare, and automotive about how they are doubling down on tech hiring.
Nevertheless, Gangas expects many bootcamps—those focused on start-ups and other high growth tech companies in places like South Florida, where she is based—to be particularly hard hit. “Here in Miami, they’re expecting a bust in the bootcamp space,” she says.
Proven skillsets: General Assembly, a bootcamp pioneer, now sends graduates into just about every industry, not just the tech sector. Its corporate partners include Humana, Walt Disney, and Navy Federal Credit Union. Over the years, the company also expanded the types of training it provides, and it serves both learners without degrees and those with degrees outside of computing who want to break into tech.
General Assembly remains bullish on its bootcamp business. The company doesn’t publicly share projections—but its consumer bootcamp business was up double digits in 2022, Lewin says. And the company will be increasing its focus on what it calls full-time immersive programs, especially in software engineering and data analytics, in the coming year.
“We focus on engineering, data, and AI disciplines because we see that they offer more resilient skill sets, even in an economic downturn,” Lewin says.
Merit America, a nonprofit tech training on-ramp for people without degrees, also sees itself as targeting a broad and durable employment base—in its case for middle-class jobs that aren’t the ones that Stanford or Carnegie Mellon grads are competing for. The impact of a potential recession, however, is a regular topic of conversation among leaders at the organization.
Already, hiring for Merit America’s graduates has been shifting, with more landing at companies that aren’t in the traditional tech sector.
- In 2021, jobs in IT and professional, scientific, and technical services accounted for about 4 in 10 of hires coming out of the program, according to self-reported data from about 800 learners.
- This year, it dropped to about 3 in 10—with finance and insurance, healthcare and social assistance, and transportation and warehousing all taking large shares.
“We’ve seen for a while that there’s a difference between tech jobs and the tech industry,” Rebecca Taber Staehelin, Merit America’s co-founder and co-CEO, says.
More than half of the group’s formal employer partners are still either tech or IT consulting companies, but the majority of its graduates get hired outside of those partners. The on-ramp served about 3,700 learners in 2022—and though numbers aren’t final yet, its leaders think that outcomes will hold steady. Program completers have been seeing an average annual wage gain of $19,000.
Next year, Merit America plans to serve 5,000 learners and has waitlists for programs. But they don’t operate based on employer commitments, like Apprenti and other apprenticeship models do.
Holding steady: LaunchCode, another training provider that specializes in apprenticeship, is on track to hit about 400 placements in full-time jobs or apprenticeships with a hiring commitment once the final numbers for 2022 are in—and it hopes to grow that by 100 this year.
Ethan Leigh, the nonprofit’s chief financial officer, expects that growth to come from a combination of increased enrollment and better outcomes. Before LaunchCode places learners in apprenticeships, they typically go through one of its free coding camps. About 1,000 to 1,200 learners start those programs each year.
The program’s success rate dropped when it had to move fully online during the start of the pandemic, and the nonprofit hopes to see improved outcomes as it moves back to in-person offerings this year. (Some online-only cohorts will still be available.)
LaunchCode primarily serves non-tech companies in the St. Louis, Kansas City, and Philadelphia areas, and commitments to hire in the coming year have remained strong, Leigh says.
“There’s a bunch of chatter—but for the most part everything has remained very consistent and we continue to receive commitments into the next year for our long-standing partners,” he says. “We’re remaining very positive and bullish for the future. The demand for these skillsets is still there.”
A question of rhetoric and action on DEI
Still, non-college providers have grown not just because of the demand for tech workers, but because companies have felt acute pressure to diversify their technical teams and to play a role in helping lower-income Americans advance economically. In the wake of George Floyd’s murder in May 2020, more than 200 tech companies made commitments to hire more Black workers and to invest heavily in diversity, equity, and inclusion more broadly.
Across corporate America, companies and their foundations committed more than $50 billion, according to an analysis by The Washington Post. Recent research by JFF Labs found that about $1.23 billion of that was committed to tackle the underlying factors that contribute to systemic racism, including efforts to change hiring practices.
Fear of backsliding: But already, there are signs that investments in DEI have stalled. The number of companies with diversity programs surged from 29% in 2019 to 43% in 2021—but that backslid to 41% this year, according to survey research by Glassdoor. The retreat among tech companies has been particularly profound, according to reporting by Essence magazine and business publications like Computerworld and Fortune.
And even with those efforts in place, the number of women, Black, and Latino workers in tech has barely budged.
Michael Collins, a vice president at JFF who leads the group’s racial economic equity initiative, says the latest round of tech layoffs are just a continuation of the challenges Black workers have historically faced.
“They are twice as likely to be unemployed,” he says. “Their employment opportunities improve in a tight labor market. But since they are often the last to be hired, in an economic downturn, they are the first to be fired. The current layoffs are no different.”
Still, in a Q&A with Work Shift, he stressed that tech careers remain promising—if women, Latino, and especially Black workers can break in.
“The current layoffs should not be confused with tech not being a strong pathway for economic advancement for Black learners and workers,” he wrote. “Most of the layoffs are happening in Big Tech. Technology is important across all industry sectors and there are employment opportunities in tech-adjacent industries.”
Avoiding past mistakes: Those adjacent industries and long-established companies in tech is where Audrey Mickahail, vice president of insights services at Opportunity@Work, puts a lot of her hope. Her organization recently joined with the Ad Council to launch major ad campaign urging employers to “Tear the Paper Ceiling” and open up more quality jobs to workers without bachelor’s degrees.
“What we saw coming out of the Great Recession was really indiscriminate use of the degree as a screen for hiring,” Mickahail says. “There is a smarter way to address layoffs and hiring slowdowns.”
And she thinks employers know that this time around. At the very least, she says, they face different external pressures than they did 15 years ago—and that’s especially true for publicly-traded firms and other large companies with established brands.
“What we’re hearing from organizations is that they’re increasingly concerned about their employment value proposition, and that they are worried about any perception of backsliding on DEI commitments,” she says.
One of the most visible corporate diversity initiatives started in the flurry of 2020 is OneTen, a coalition of Fortune 500 companies committed to hiring or advancing one million Black individuals without degrees into family-sustaining jobs by 2030. It partnered with Merit America in May, and the organization has already had several dozen placements through its marketplace.
Gage, who trained with Merit America and is now at Cisco, is part of that company’s newest OneTen cohort. A recruiter reached out to him earlier this year, and he applied for a job in sales that didn’t end up being the right fit. But the recruiter kept in touch and connected him with hiring managers, and the company eventually brought him on in a more technical role.
“This is the first job I’ve ever gotten a ‘No’ from but where they said, ‘We’re going to help you get where you need to be.’ And that spoke volumes,” Gage says.
Merit America expects the number of its learners getting jobs through the OneTen marketplace to ramp up significantly, perhaps not this year but in 2024. “We’re very bullish about OneTen and it’s going to be a longer-term play,” says Connor Diemand-Yauman, co-founder and co-CEO of Merit America.
It’s the kind of phrase—longer-term play—that we heard over and over again. This year may be a setback moment, but everybody is hoping that companies and learners are playing the long game.