This blog is an adapted excerpt from our new 2022 Data Science & AI Professional Salary Report, which includes 50+ pages of data and insights on compensation, demographic trends, and other research on hiring trends, WFH, and much more! Our FREE 2022 salary report will be available for download very soon! We well also be hosting a webinar on June 21st where we will be discussing all insights and trends – register here.
With the prevalence of advanced data science & AI becoming such an integral part of staying competitive in today’s market, we reviewed this year’s data with keen interest to see what trends have been developing in this space. The past year has obviously accelerated some of these shifts, and below is a spotlight on just a few of the trends we’re keeping a keen eye on in the years to come.
What a difference a year can make…
We approached this year’s salary data (gathered from May 2021 through April 2022) with great interest, since the timing lines up well with the economic recovery that began in Q2 of 2021. Our data shows that 2022 salaries significantly increased at all job levels for both data scientists and AI professionals. These salary increases are unlike anything we have seen in the past (it’s our 10th year delivering this report), and these unprecedented times in the job market are still continuing to make a strong impact on candidate compensation.
Given the immense volume of professionals changing jobs along with the buzz surrounding the Great Resignation, we have compiled a list of trends we have noticed over the past year:
2022 Hiring Indicates Booming, Competitive Market
Many data science & analytics teams had already resumed hiring last year (escalating in Q2), and so far in 2022, hiring has been incredibly competitive. At the beginning of the year, our research found that 83% of data science and analytics teams were planning to hire during Q1 or Q2 of 2022.
Our respondents spanned over 160 companies across the U.S., and while 17% of teams reported they are holding steady, it is notable that none of the companies we surveyed this year reported that they were planning to cut back their teams. The hiring momentum that picked up during the second half of 2021 has remained, however there have been some very recent signs of pullbacks and layoffs.
Permanent hiring continues to be the favored method of adding headcount, time will tell if the trend flips to favor contract hiring over permanent hiring if there is an economic slowdown. It appears that while backfilling is still a significant factor in hiring plans due to the hot market, it hasn’t become a bigger problem this year than it was in 2021.
The Great Resignation & Increased Inventory of Roles
The effects of the COVID-19 pandemic on the hiring market have shifted significantly over the past few years. During the immense disruption of 2020, many professionals chose to put planned job searches on hold, while some data teams were more impacted than others in terms of their hiring plans and response to the initial crisis.
As the economic recovery picked up in 2021, we saw more data teams planning to hire. There was also massive turnover in the labor market, dubbed the Great Resignation, as many professionals resumed their job searches or sought to change their working situation due to other pandemic-related factors.
Unfortunately for those looking to hire, this has led to fewer professionals on the market in 2022, and a lower inventory of available candidates. Many candidates that are still on the market are coming to the table with numerous offers and are seeking a meaningful increase in salary, along with other benefits.
Interview Process Has Become Streamlined
Given the competitive nature of today’s hiring market, it is crucial for organizations to curate a streamlined and transparent interview process. Utmost clarity as far as the role and responsibilities, tool usage, and day to day work will allow the candidate to get the deepest understanding of what the role entails. From our recent conversations with clients and candidates, it is evident that the interview process has seen some immense shifts over the past few years and companies have realized the importance of improving their interviewing strategies to allow for a streamlined and effective process when vetting candidates for their open roles.
It is also notable that long-form technical assessments and coding exams are used less frequently in the interview process and companies are beginning to assess a gap in skill as something that could be closed through training and mentorship when a candidate is onboarded.
Retention and Attraction Strategies are Brought to the Forefront
Our research has repeatedly found that data professionals who changed jobs were receiving significant salary increases, so be sure that you’re aware of current market rates if you wish to retain key staff. We’ve also seen some data teams employing the use of preemptive retention bonuses or spot bonuses to recognize work on key projects, and even salary increases outside of the normal annual schedule.
Positive relationships can go a long way towards retaining employees, including managing relationships between you and your data team, as well as fostering camaraderie within the team. Strong communication, transparency, and offering mentorship can all build stronger relationships between leadership and the team. For early career employees especially, focusing on team-building or fun activities can build stronger cohesion within the team, which can help make employees less likely to be tempted by other job offers.
It is also important to maintain relationships with company alumni as we have seen several candidates return to their previous companies for a variety of reasons. Working with students can also provide ample opportunities to see how they work, introduce them to practical tools, and even serve as a sort of extended interview process for students that you may want to hire upon graduation or for internships. This could include institutes or programs, and you can also look into partnering with student-run organizations as well.
Changes to Come: Storm Clouds on the Horizon?
In May of 2022, we have started to hear of companies implementing hiring freezes and layoffs and even data science and AI professionals are being impacted by these changes.
These uncertain times are causing a ripple in many industries: funds are slowing for smaller, newer companies and interest rate increases are impacting financial services firms. Similarly, inflation is hurting CPG, retail and manufacturing firms, while supply chain issues are taking a toll on technology firms.
Burtch Works will continue to monitor these important changes in the market, stay tuned for our upcoming research and observations.