The Engineering Leadership Report 2024: The Data on Shifts in the Tech Industry & What It Means for Leaders - LCPS01E03

Jun 11

Listen on all Podcast Platforms, like
Spotify, Overcast, Apple Podcasts, iHeartRadio, Amazon Music, Google Podcasts

Episode Summary

A special episode of this podcast.

Like many of you, during the tech downturn of the last 2 years, I've been trying to understand the real data beyond anecdotes and bold news headlines, on questions like:

What does the tech industry look like now?
How exactly have organizations and their priorities changed?
What impact and influence do AI actually have, beyond the hype?
And what is it like to be, become, and interview to work as a leader in this changed environment?

I'm happy to share the data with you today in this episode: In The Engineering Leadership Report 2024, which I'm publishing in collaboration with tech events & publishing company ⁠LeadDev⁠.

Join me for this conversation with LeadDev's editor-in-chief Scott Carey, an experienced tech journalist. Together, we ran a survey and heard from over 1,100 engineering leaders.

These are their answers, and what they mean for us as leaders in this space. We talk about and share the data on:

Leading in organisations: How companies changed, what they prioritise
Being and becoming a leader in 2024: The impact of those changes on leaders, interviewing, and roles & time spend
Industry trends and outlooks: What engineering leaders are excited & concerned about, and the influence of AI

This podcast goes live while Scott and I present a talk version of our conversation at LeadDev London 2024 - this is for everyone of you who can't be in person with us.

***

Download the full report at ⁠bit.ly/engleadershipreport⁠.

***

We want to hear from you! Email us with feedback, questions, or topic ideas; I can't promise we'll always respond, but I can promise we read every email! At pod@lenareinhard.com.

Transcript

Scott Carey: Cause. What we found was like 54 % of respondents had four or more larger organizational changes to deal with over the past year. And that could be a reorg, a return to office mandate, a cut to their learning and development budget, and some layoffs or a CEO change,or a leadership change.

So I think that although all of those things are big changes to have to go through four of those. Like for most of our audience, 54%, but that's just a huge amount of change to reckon with. And then 18 % of our respondents had gone through six or more of these changes. So they basically had to experience every single one of these kind of big seismic organizational shifts that most people in their careers up to this point have probably only dealt with one or two and they've all had it all kind of hit at once.

Intro

Lena: Over the last two years, the tech industry has been going through big changes. After a decade of boom and money being thrown at anything that even remotely had the word software in its name, a lot of companies have been running layoffs. And all of that has impacted engineer leaders as well.

Over these last two years. I too have been asking myself and many people I spoke with those exact same questions. Like how have organizations been changing? What are they prioritizing now? And what exactly is the impact and influence of AI? How have hiring and interviewing for leadership roles been changing?

And what does all of that mean for how engineering leaders now spend their time? What are they focusing on and how has their role changed? Because there have been a lot of headlines in the news and a lot of people have opinions on this, but I've been wanting to get the data and I'm really happy to share that now I have it.

This is Leadership Confidential with Lena Reinhardt. We'll talk on more than two hard things in technology, finding community and becoming the engineering leader you can be. Today, the Great Engineering Leadership Report 2024 with Lead Dev and me.

End of last year, I took all of those questions that I mentioned earlier about what the industry is shaped like now to Scott. Scott Carey is the Editor in Chief at LeadDev. And I know I sometimes get questions about it, but I don't actually work for LeadDev. I've only been running a couple of conference talks and coachings for them.

But, They're really invested in understanding the shape of leadership roles. And so Scott and I ended up producing a survey together, a survey that covers how engineering leadership roles have changed, how organizations have changed, and how engineering leaders feel about the state of the industry and where things are headed.

And I'm really happy to share with you the results of that survey today. You can find them as a download at bit.ly/engleadershipreport. There's also a link in the show notes and you can now listen to Scott and I talk about the report, how it came to be all of the data, what we think about it and what that means for you as a leader in this industry.

Let's get real on hard things in technology with Scott Carey.

Interview with Scott

0 – GUEST BLURB

Scott: Cause. What we found was like 54 % of respondents had four or more larger organizational changes to deal with over the past year. And that could be a reorg, a return to office mandate, a cut to their learning and development budget, and some layoffs or a CEO change,or a leadership change.

1 – INTRO

End of last year, I took all of those questions that I mentioned earlier about what the industry is shaped like now to Scott. Scott Carey is the Redditor in Chief at LeadDev. And I know I sometimes get questions about it, but I don't actually work for LeadDev. I've only been running a couple of conference talks and coachings for them.

Let's get real on hard things in technology with Scott Carey.

My conversation with scott carey

Scott: i'm Scott Carey. I'm the editor in chief over at lead dev for anyone who isn't familiar with lead dev we run a bunch of conferences in London berlin and new york, where we really help engineering leaders, become better people managers, run more effective teams, and build really great software.

and we also do that through our digital content arm, which is really where I spend a lot of my time focusing. So we publish articles, we, run webinars and, increasingly we do research, which is where, I come into play here today.

Lena: how it came about was, I think I emailed you and said, Hey, I've been thinking about this. I've been, Trying to understand how has the industry been changing? there are a lot of rumors floating around. People have a lot of opinions, obviously, because this is tech.

and that's part of the deal. and at the same time, there, like I had been having so many conversations. even, I think viscerally started. In end of 2022 at probably lead dev in San Francisco and then in Berlin at the time where everyone was discussing what's been going on at the time there had already been the first big layoff waves.

And I think it really. for me kind of materialized even more in New York in early 2023. I was asked to give a talk about engineering productivity and efficiency. And that was like, okay, now things are really different. but at the same time, like so many people were talking about how their roles have changed.

Others were talking about, Oh, middle management isn't a thing anymore. And so there was for me, if one layer was essentially what I would describe the rumors and the hallway conversations at the conferences. the second layer for me was always, I've been following the industry closely, since the early 2010s when I got in here.

even prior to that, I already always had an interest in it. And for me, especially the questions of what leadership roles look like, has always been very personal because I have a very different . background in my leadership journey than many other leaders. I don't think mine is better.

It's just always been different, which also meant it's, I've always been a bit of an outlier and therefore they had a specific interest in it, but then the third layer for me was also just people who would approach me like online or who would ask in coaching sessions. I got many more questions about essentially, how can I build my career now?

I don't know where things are headed. What skills should I invest in? How can I grow on word? Or of course, people who were. like themselves or whose friends were impacted by layoffs. and so it had all these different layers and I kept finding myself trying to untangle them and figure out, what is It's actually happening because of course, we all know there's a lot of hype and buzz and there are big headlines, especially around like global players like Meta and Google.

But then I also, it's probably the fourth part, but I'm also like in Europe. I've also worked with Silicon Valley companies a lot, but I also have a lot of clients in Asia, for example. And I've also always known that there is a lot more nuance to many of these hypes. But again, I couldn't, I didn't actually have the data myself to say, Hey, here's exactly what is happening.

Scott: Yeah,

Lena: I got in touch with you because I felt like you have, I know you have a keen interest in this. And, you also have a platform with Lead Dev.

Scott: yeah. And, you know, it's like,it's existential to us. we have to be where our audience is. And if we feel something's changing, like we have to be on top of that. And we were starting to see it coming through with some of the submissions we get, because most of our talks at LeadDev are through submission.

We have a call for proposals. And I'm, I think you were there when our friend David Yee from the New York Times gave his kind of keynote. And that was really the moment for me where I was like, Oh, the job has materially changed for a lot of folks in this audience today. Like they. and we can get into the detail in a second, cause that really is what the report's about.

But it just felt to me like the very like top surface level, there was a time when you would hire your way out of a problem, or you would basically, you had so many things that you would just throwing resources at it. And then we were just hearing more and more that people were really grappling with prioritization, with speeding things up, with trying to Do as much with similar team sizes or smaller team sizes.

I did not say do more with less because we do not subscribe to that here.

Lena: yeah,

Scott: there was just a shift in what, like we had got a really over like nearly 10 years of doing this. We felt we had a really good grasp of what engineering managers and engineering leaders spent their time doing and thinking about and worrying about.

And it seemed to shift really fast.

And like James, I'm a big fan of James Stania and his, his newsletter, the engineering manager, I think at Substack, and he's been speaking a lot about this recently, which is just that kind of, he wrote a great piece last week about the disappointment gap and like how that's a key part of management.

And I think that like now managers, whereas before they could say yes, a lot. Now they're having to say no a lot more. And I think that trying to figure out how you operate in that space where. Yeah, there aren't these promotion opportunities.

I don't think we've said what it's called yet. Have we, it's

Lena: Oh, yes.

Scott: It's the engineering leadership report. and, it's going to be published, next week. I don't, know when this podcast goes out, but it's going to be published on the, 11th of June. you're going to be presenting it on stage at Lead Dev London, running people through what we found.

but yeah, it's going to be available on leaddev. com as well.

Lena: And I'm planning to publish this episode, next Tuesday as well. So it goes up with the report, for people who can't be there in London.

Scott: perfect.

Report Methodology

Lena: Let's briefly just talk about essentially how we did it, like the kind of methodology section of it. do you want to give a quick kind of overview

Scott: Yeah, so we worked with a research partner that we've worked with in, the past. Basically we put this survey together, with kind of three broad sections. We really wanted to understand,how, People's companies are changing. So what are some of those bigger shifts that we've been hearing about?

Like layoffs, like reorgs, like hiring freezes. We wanted to get a feel for how widespread that has been. we wanted to find out more about what it feels like to. Become and be an engineering leader in this new kind of like environment. and then we also wanted to find out a little bit more about, industry trends and what the outlook might be.

So we like structured this survey. We sent it out in, March.

Lena: Yeah.

Scott: we sent it out in March. We kept it open for about a month. and we got 1, 107 completed responses. 36% of those were managers of engineers. So that's our kind of core audience of, just engineers with management responsibilities.

Then you had 20 % managers of managers. probably from that director all the way up level. and then we broke out CTOs. We had 9 % of those. We had 10 % of, ICs of software engineers. and then we had kind of 20%, of your staff, principals, tech leads, that kind of big stuff, plus, bucket, however you want to break it down.

I know some people don't have tech leads in there. Some people do, which is why we break it out.in terms of geography, predominantly Europe and U S and the UK. So 34 % Europe, 32 % USA, 19 % UK. The only other segment worth mentioning is Canada at six. And then we had two, like a smattering across the rest of the globe, but not big enough for us to really come away with any confidence about what we were seeing in those markets.and then in terms of company size, it was a really broad range. we had 20 % of 5, 000 plus, we also had,around 15 % all the way down below a hundred employees and then the big middle. So yeah, really nice kind of broad range of company size, which was interesting when we got to digging into the data and seeing how these things are impacting people at different company size.

Lena: that's honestly one of the things that I really enjoyed about being able to dig into this data is that we have this really broad view. there is, of course, like the, One thing we also note in the final report is that, yeah, the data is very Western centric, and, there are huge tech industries, obviously in Asia, but also many African countries, for example, and so that would be Great to have and it's definitely a gap.

I do think for the areas where we do have data, I'm really glad that we have all these broad perspectives on leadership like we did in the, I think we ended up with 19 or 20 questions, including a couple, demographic questions,about the people responding to us and their roles and locations.

But, there is this really broad view on different companies, different stages, but also people at different levels. We made a point of it. Describing like as precisely as possible what kind of leadership, meant including a technical lead. For example, we described as someone who doesn't have direct reports.

There were still a couple of people who do. There is this whole weirdness about how titles work. but it's a really comprehensive view. It's statistically significant, which makes me as a data person very happy.because we got, so many people generously donating, giving their time for this. And so that's, it's a really good view and it, well, yeah, I learned a lot from it.

so let's dig into the results.

Scott: Yeah, where do you want to start?

Lena: I want to suggest, How about we just follow the idea of the report structure, because the way we laid it out is that our premise is essentially, we wanted to understand first, how have companies changed?

How are they working now? What changes have occurred over the last couple of years? in most cases, we talked about changes just in the last year, but with organizations, we asked about the last two, just because we usually know that like changes, Can accumulate over time. And that also has impact on organizations and leaders.

How companies have changed

I'd love to basically set the context a bit with companies. What's happened there in the last years? what do our respondents say? And then dig into what that means for leaders.

Scott: Yeah, so what I thought was interesting in this section, which is really where we talk, where we ask people like what they have been experiencing at an organizational level over the last year or so. and like,I've seen a bunch of these reports recently where you get a feel for how many people have been impacted by layoffs or how many people have been impacted by a reorg.

or how many people, have seen, have been told they need to go back to the office a lot more. so all these kinds of just organizational shifts and what I thought was an interesting way that I think you ended up cutting up the data here was like looking at when people have been impacted by more than two or three of these things.

I hadn't really thought about it that way, but it really hammers home how much change people have been forced to reckon with. Cause. What we found was like 54 % of respondents had four or more larger organizational changes to deal with over the past year. And that could be a reorg, a return to office mandate, a cut to their learning and development budget, and some layoffs or a CEO change,or a leadership change.

Lena: I do love that you pulled out this quote from Daniel Egg, the CEO of Spotify, who just said in April, just when we had the survey out, That, the layoffs, did disrupt the company's day to day operations more than they anticipated, and that it took more than four months, for them to get back to delivering normally again.

I will say I can't read that, that quote and say, yeah,no shit, Sherlock, we do swear on this podcast.

yeah.

Scott: why I love it because CEOs don't say this stuff. They don't say this stuff on earnings calls. Like CEOs do not admit to their, like to things being disrupted. And you think about how many companies have gone through layoffs. Like I basically, if you work at any. Size of tech company, you'll probably have seen some layoffs over the last couple of years.

the only one I can think of that haven't that we talked to a lot is Bloomberg. and so that is going to disrupt like how you do things and to actually see someone at that level admit it was just like refreshing, I think.

Lena: and especially because what was striking to me also was that a lot of those changes didn't just go into one direction like we had explicitly asked about, for example, hiring increases hiring decreases. and. A lot of companies did both like we had 3 % of respondents that said they had budget cuts and budget increases.

and of course, we asked about 24 month timeframe, which is quite a long time in tech and startup land. but at the same time, that also just knowing what that. Takes for an organization to then actually manage, if you do, for example, budget cuts first, you optimize for productivity and you make things much more efficient than you might do.

Increases, maybe those were just in specific spots. unfortunately we don't have that data yet, but we know that a lot of companies have been investing in AI, for example. And so it may not be that they hired those exact roles back that they laid off too much two years prior. but that also means the way that the organization then functions as a result of those changes is going to be very different.

And as a result, how leaders have to work and manage their teams through that is going to have a huge impact.

Scott: Yeah. And we've seen that in the news. Like we've seen organizations make like Rob Peter to pay Paul. So they've cut like some department over here so that they can hire up a big AI department. Or I think you've seen a lot of the voice assistant teams at the bigger tech companies have been subsumed into the AI group and the way that's changed the way that things are staffed, means that you're going to see that kind of push and pull because you've got the.

Macro like thing that's like impacting how much you can hire. But then you've got this AI thing, which is we can't miss this. So we're going to have to keep investing. So I think that you've definitely like seeing that. and it brings me back to my big thing about tech, which is you cannot have a 12 month planning cycle in tech because like things just change too quickly.

So that's why people are experiencing both within the time horizon that we gave them. I think this was a really interesting one with this company size. That's it. Graphic in the report where we've got budget increases and cuts next to each other and hiring increases and layoffs next to each other by company size.

and the majority of the budget increases or hiring that we're seeing is happening in the smaller company size. And then once you get down to, on our graph, it's the biggest organizations at the bottom, , the. Prevalence of layoffs and budget cuts is huge. so it really shows that tech people like smaller companies in tech are still growing and hiring and getting investment, probably only if they're working in some form of AI.

but then, yeah, the biggest side is, it's a lot more dicey.

Lena: Yeah. And, I do want to say the, probably if they're working in some form of AI, Scott just smirked. I do think there's probably a bunch of truth to that, but I also know there are a lot of other tech companies that are still doing decent business, but the hype of course right now is really strong and it's fueling a lot of the growth, including in smaller companies.

Scott: Yeah. It's the, like I say it with my tongue in my cheek, but it is the

Lena: it's translating that for audio only. Okay.

Scott: yeah. I didn't know, but in terms of the investment landscape, it's true. if you like the, all of the investment currently has been funneling. in that direction. So it's really challenging if you're working on anything else, which is stupid because we should continue to work on other things.

Lena: On that, I would love to, I think this is a good segue to talk about what companies are prioritizing. the thing that honestly was most striking to me there is we gave a lot of options and it was, same as the question prior to that, it was a, Multiple choice, choose however many you want to, kind of question.

And, we had a whole range from the usual, like adding new features to things like, actually AI investments, internal productivity was a big one as well. the thing that here. was really striking to me was just how much is really important. And there is, of course, it's one of kind of old refrains about tech that like everything is really important at all times, but I love the graphic that I'm, the chart that I'm looking at that really shows, yeah, a lot of companies just have a lot of things that are really important.

Scott: Yeah. And I think there's some nuance here. Cause I remember like when we were going through the results the first time and I looked at this and I was like, Oh, 77 % of respondents say that adding new features is their biggest priority and I was like, Oh, so nothing's changed because that has always been the biggest priority.

that's what drives me. Like investor value. That's what people demand is feature work. But, and this is where the fact that we don't have year on year data, I thought really reared its head for us and hopefully this time next year we'll have, we'll be able to do this analysis, but what I thought was interesting was second on that list was.

maintaining technical debt. Third on that list was cost optimization, productivity, improvements, efficiency. They're at 66 and 63%. So very, majority of respondents are dealing with those things. and so what, I don't know, because we don't know what people would have said a year ago, but my feeling is those have moved up.

The priority list because of the impact of layoffs, because of the impact of all this stuff that we've already talked about, making sure that you're, running cost optimized services, make sure that you're running efficiently, making sure that you're the engineers that you do have are as productive as possible.

Those are the things that we've been hearing. so it was good to see that kind of came through in the data. And then the AI stuff is It's striking when you look at this graph, because AI for internal use, AI for customer use was like right down at the bottom, but you're still talking about 37 and 34 % of respondents, like really prioritizing that work.

and as you said, the lowest priority here is internal data management at 24%. That still suggests that like,Basically like on this list of what, like 10, 12 priorities, like that, like you're probably going to have six or seven of them. How on earth you juggle that is, is the real challenge.

Lena: It's, I just counted it's 12, and, what I really thought was impressive as well was that, it's really across the board. I think the main difference, if we don't have that chart in the final report, but what we saw was that, the features were really top priority across any company size.

But especially things like availability, and tech debt maintenance were really investment priorities for larger companies, which makes a lot of sense, first of all, because they typically have some sort of recurring revenue existing customers already that they need to keep happy and probably also have SLAs or SLOs with.

I also do think, to the point earlier that we saw a lot of productivity investments in larger companies. I think there's also a question that like whether to what degree those companies are basically just inflated and bloated in size and where there's been some corrections now that are a bit more closer to reality in terms of how they maybe should be functioning by some measure.

That's a sidetrack. but yeah, I thought that was really interesting that like specifically larger companies are pushing much more for, some of those internal optimizations, but it's not just them. It also definitely is the case with smaller ones.

Scott: Yeah. And the bloating thing is a good segue again, because like only a couple of weeks ago, you had a couple of investors, Andreessen Horowitz, basically like banging the old drum of there's too many BS jobs and there's too many fake jobs in tech. And Google have all these. Middle managers who aren't doing anything and they aren't delivering anything, which like you can tell by the sound of my voice, like I just totally disagree with, but it like this environment gives those voices volume because you like in tech, like there's, I find that engineers are particularly keen to cut out layers of management.

Google famously tried to do this in the noughties. It didn't really work. but they definitely always wanted. Try and be more lean and try and give engineers as much like space to just do their work as possible. And so I think in this environment, that was what we were trying to understand was like, whether there was that drive to cut some layers of management.

We had heard it anecdotally. I think Shopify is the most famous example where they really openly published a memo where the CEO was like, we want more of the managers to become, I think they call them builders there. Or makers, but it was really just that kind of like trend that we've been hearing about, which is like this, uh,to steal charity majors pendulum.

there were more managers like swinging back towards ICs, maybe not by their own choice, but just because of the like demands of the industry. And then, we did the research and we didn't really see it. Did we like, we saw,

Lena: Not as much as I thought, yeah,

Scott: yeah. I think we saw like net. Basically the number of management roles was pretty flat.

It was net plus 2%, but then when you dug into it, there was a net 22 % reduction in middle manager roles. So there was this kind of cutting out of layers of management for a more lean environment, I think. what did you make of that?

Lena: Yeah, I think the, IMEDA was one of the other big ones that came out very early on already in 23, saying that, yeah, middle managers basically shouldn't exist. and yeah,I'd heard all the headlines and so many people talking about the evaporation of the middle management layer and the data just isn't there.

honestly, what I saw in that data really made sense to me, like essentially very large companies that probably have one too many layers of hierarchy, are the ones where that. Where there is a substantially smaller number of middle managers by like these 22%, but it's also not gone. That's still I guess that's one in four middle managers, but also three of those four middle managers are still there.

whereas On the flip side, companies that are smaller companies that are just growing specifically the company sizes of 20 plus managers, sorry, 20 plus engineers and employees, essentially the areas where you are increasingly dealing with a lot of complexity, you're dealing with a lot of coordination overhead because you have more staff.

Those are the companies that are still hiring at that level. and so honestly, yeah, it made a lot of sense to me. Like I also, there's for me an asterisk where I'm honestly curious how that's going to look next year. just because I personally don't think that all of those middle manager layoffs have been super, are going to be super sustainable.

Scott: there is, that's a whole other side conversation we don't have to get into. so I wonder if there's going to be a bit of a correction, but yeah. Yeah. So I was quite surprised to see that. Yeah, and very little correction or change on upper management. I feel like the value of upper management has stayed fairly staid. And I think on the smaller company size, that's probably just a result of the flattening of the organization. You probably have, you probably want to focus on having more senior leaders who are probably doing more of a middle manager job, but under a senior, , Manager title, and then, other organizations, yeah, you're just seeing a little bit of a, as you said, like a one quarter, like correction, which like, we would expect that.

what all of this change has meant for leadership roles

Lena: So organizations have gone through a ton of change. The shape of organizations has also changed with some management roles shifting and with priorities changing a little bit. All of that, of course, also has a lot of consequences on the roles of engineering leadership. So I want to talk about that a little bit.

We asked in the survey, how engineering leaders spend their time and 71 % of said that they've been asked to do more than before. A lot had a wider scope and areas of responsibility. 34 % also have more direct reports, 20 % of more teams reporting to them, and only a small portion, about 24%, have narrower scope and narrower responsibilities.

To me, this was one of the first really interesting findings of this report. When we asked people how have your own responsibilities changed over the past 12 months, we had assumed that a lot of them would say that they have less capacity for people development and team development and that they would be doing much more hands on technical work and much more focus on technical strategy, which is what a lot of the rumors and headlines that we've been hearing about, have been saying, but In reality, the respondents to our survey actually said barely anyone had more hands on technical work.

we had 0. 5 % of people that includes coding pair programming. similarly, only 0. 3 % said more focus on technical strategy. That to me was really surprising. Similarly, There were basically almost no changes in terms of people having more priorities or different set of stakeholders or moving into a new role.

So the initial data analysis that we looked at for how roles have changed. Looked at averages across all respondents and on average, the breakdown of how people spend their capacity has not really significantly changed over the past 12 months. But when I zoomed into the data and ran more analysis, it was really visible that as individuals, many people actually did report significant changes in how they spent their time compared to 12 months ago.

For line managers, for example, many line managers roles actually changed quite substantially.

50 % of line managers report that they spent 10 to 30 % of their time differently from 12 months ago. So that also means they had some changes to their role.

17 % spend 50 to 100 % of their time differently. So for them, it's been at least half to an entirely different role that they've taken on.

30 % of tech leads are spending 10 to 29 % of their time differently from 12 months ago, compared to 50 % of line managers.

To me, that's a really interesting takeaway because it also goes to show that at a high level, things may not have shifted much, but for individuals and a lot of us in this industry, Things actually have shifted quite substantially in terms of how you spend your time and what you're focusing on.

Another big question that we had when designing the survey was how interviewing for leadership roles has changed. Because that's my opinion tech hiring has always been a bit of a mess, to say the least. And With fewer roles available, companies running layoffs, a lot of companies having hiring freezes, we assumed that interviewing for tech roles might've gotten even worse.

That's why we also asked what the hardest parts were about looking for tech jobs.

The results there were honestly somewhat what I'd expected. 59 % said finding suitable jobs. The number of interview stages was mentioned at 47%. and other. high responses for coding interviews and the response time of companies, as well as poor job descriptions, both at 28%. Another call out I want to make, though, is that I've reviewed all the qualitative data points, all the notes that people had added in the survey, and one big theme there was People mentioning companies, ghosting them, so submitting applications or even going through interviews and just never hearing back from the company again.

So in this kind of climate, how do you get a new job? We asked our respondents and they said that a referral was possible. the most promising way to get a new job currently as an engineering leader at 37%. Others mentioned through their network, 33 % and then 16 % for LinkedIn, 11 % only directly for applying with the company.

Leaders’ outlook on the industry

Scott: yeah. Let's jump to the industry trends and outlooks and just talk about how people are feeling.

hmm.and then the other thing I thought like that we really wanted to understand that I thought was really interesting was just how people are feeling about things in this new environment. so we asked a lot of questions about whether people are feeling concerned about things or less concerned or how they're feeling about their job prospects, Just to really get that temperature, of engineering leaders.

and I thought it was interesting that like 39 % of engineering leaders said they're feeling more concerned about their job security than they were last year, and just 11 % are less concerned. So you've got a big chunk there that are feeling the same, but In terms of like where it nets out, like more people are feeling anxious.

And I think that kind of gets back to what we were talking about at the start about some of those runs on the career ladder, maybe not being there anymore, and people are trying to navigate that. this is probably something that you come across, a lot with, Your coaching clients in terms of like, where do you make that step?

Lena: Mm

Scott: and then I like just as A data point to pull out just because I thought it was interesting was like when you started to ask like By level like how concerned people are feeling about their prospects The tech leads, the managers of engineers, the advanced engineers, like all of those roles, all feeling about the same, like 40 % are feeling more concerned, about 50 % are feeling the same.

And then a small % feel less concerned. What I did love is that the CTO or equivalent, were 22 % less concerned, which is a huge outlier, which suggests that basically once you get to the CTO level, you don't worry about your job prospects. You've made it.

Lena: Yeah. Whereas, especially for people who are earlier in their career, there are, like, a lot of people are concerned. And that's, it's very understandable because it's always been a bit of you mentioned earlier that, at LeadDev you all have had at least somewhat of a decent grasp on what leadership roles look like and management and how it works.

but, I think especially for people newer to the industry, that's currently really hard to figure out. Like I'm honestly, when I'm having mentoring conversations right now and people ask for career advice, I put a lot more disclaimers than I always used to saying that, I have a really hard time currently telling people exactly what to do.

because it's become much more, yeah, tricky. And there are a lot of unknowns to deal with right now.

Scott: It's difficult, isn't it? Because I think that the tech industry for a long time has been the industry to get into, it is grow. There is so much opportunity. and I think for a lot of people that have not been in the workforce very long or just entering the workforce, to readjust those expectations that maybe you're like, let's be honest, like anyone in the industry in these roles is getting paid very well compared to other.

industries, but I think in terms of the expectation of that continuing to grow, and then that you can just progress and progress every kind of year or two, I think that's still true, because I think this is still a really buoyant and like bright future for this industry.

But I think what's going to happen now is it's going to, like those time horizons are going to lengthen. I think it's going to be slightly harder to make that progression and it's going to be slightly harder to get that pay increase and so what I thought was interesting was that like most of our respondents still expect their pay to continue rising this year and I think that those people might be in for a slightly, Tough landing, because I think that for the next couple of years, like the industry is going to look and feel very different and for people that have become accustomed to it, just going up and up to the right, that's going to be an adjustment and that adjustment tends to fall on the shoulders of the engineering managers who have to communicate that change and have to manage those expectations and have to navigate all of that.

So I think that's going to be an interesting challenge for the next year or so.

Lena: Yeah, I think there's honestly one bit that we don't have nuance on in the data there is essentially how big those, like adjustment expectations are. just because, I think it would, for example, also a factor in even just, inflation. compensation, which like a lot of companies have been doing, even if they haven't done such large increases compensation wise otherwise.

so I'm hoping that there's still, a bit of, wiggle room, honestly, but of course, we don't know right now. And I would absolutely agree with you that, the expectations are very different. Like we use We're coming out of this really strong employer market, of essentially engineers asking for the payday bond and companies having to pay it because talent is so scarce, and that's really shifted right now and it's a very different environment.

Scott: Yeah. And that's the interesting part about, cause we were asking, emotional questions, almost we were asking what, like what people are feeling concerned about or excited about rather than whether they had actually been impacted by this stuff yet, because we're trying to get that temperature check.

And when we ask people what they're concerned about, like reduced potential for compensation and recession with a top of 50%. So there is just that feeling, I think, in the market that like things are tightening and it's not quite going to be as buoyant as it was. and then in terms of what people are excited about, it's very different.

Like people aren't, when you ask people what they're excited about the pay and progression aren't there, it's really developer experience improvements at 63%, the positive impact of gen AI at 58%. And I reckon they're probably linked in some way. different technologies that are really exciting,AR, VR, sustainable technology, AI, of course, like those are what people are excited about rather than they.

Pay and progression. So I think there's like a weird Vista there between like people being concerned about the economic stuff, but excited about the technical stuff.

Talking about that, what do you make of, cause I know you were very keen to hear more about, the AI, impact and how people are feeling about that, what were your takeaways there? Yeah, I thought I like, I was definitely surprised by the optimism in the audience. Like I tend to, maybe this is just.because of like the person I am and I like to poke fun, and people probably lean into that, but like a lot of the conversations I've been having over the last year or two,tended to have this like register of like Being a bit over it, like a little bit, like we were in that, like Gartner trough of disillusionment.

And people were, especially some of the more senior people I was talking to, they were getting it from the board being like, we need to do more of this. We need to do more of this. And they were a bit like, Oh, I really don't want to do that. And they're trying to manage that. Yeah. gap. So when we looked at the data here, like the, I was surprised by some of the optimism in the audience about what generative AI can do and, really how it can help people, like developers with like key tasks. So like people were really optimistic about how it's going to improve their tools and platforms.

Hopefully it's going to make documentation easier because people don't like doing documentation. It's going to like boost automation. Engineers are born automators. This is just going to put that on steroids. So there is, I think a general feeling that, eventually a lot of these tools are going to help them.

I think, when it comes to the concerns, they're much more. they didn't surprise me, like the quality of outputs, the worries about sensitive data, the worries about legal complications, copyright infringement, like these are all very like natural concerns to have with a technology that is so nascent.

so I wasn't as surprised by the concerns. I think that they're very real. And I think that those are things that people are going to be grappling with for a little while.

Lena: That's great. Yeah. and, since we're almost at time, unfortunately, this was really interesting. Is there anything else that really stood out, surprised you, or that you otherwise want to share about this?

Scott: I think we covered like most of the big points there. I'll be really interested to see how people respond to this, but like my, like when people ask me like, What did you find? I just like really see a picture of, engineering leaders and managers, like people that I, spend a lot of time thinking about and working with just being like much more kind of frazzled than they've ever been.

And I've got a real, I think there's like a real growing concern of likea bit of a burnout epidemic in the industry. And I'll be interested to hear your thoughts. Like burnout has been a topic. For us, we've seen for a long time and engineering leaders do are susceptible to it because of the nature of the role, but I, I look at these, this data and like 35 % of respondents are working longer hours than before, and just 6 % are working less additional responsibilities have been thrust onto people. They're being paid less for that time. They've got less potential for promotion and progression. I think you've got like a real witch's brew of things there that could lead to. quite a dangerous situation with just like more and more engineers burning out.

And so I think that's where. I'll be focusing some of my attention this year in terms of like how we can try to mitigate that. obviously it's difficult because these are big like waves that, that we can't all control. but that's definitely something that like, once I started like zooming out and looking at all the things we had found here, that started to rear its head a bit for me.

I don't know. Did you. You were definitely on the more optimistic side of things than I was through this process, which was good. We needed that.

Lena: Which really, again, I was shocked by because I'd never really picked myself as a very optimistic person when it came to the industry.

Scott: Yeah,

Lena: but,I will say in the editing of this, since you brought it up, I was the person that occasionally said, Hey, I don't think things are as dire as we've written them up right now based on the data I'm seeing.

But I overall agree, I, especially on the,many more reasons, for potential burnout that you just mentioned, that's a huge concern of mine. I also think, how people will enter and progress in the industry is, has always been a challenge and will continue to be likely even more so now with like fewer companies growing as much and fewer opportunities available, as you also mentioned.

and I think the other bit is that there is. An ongoing question about the impact of our industry, through the things that we're building, like a lot of AI things that are being built. Being put out right now are already having detrimental impact. I just read a study end of last week about how specifically images generated using AI are already contributing to misinformation and disinformation.

We're in huge election years. And so those are big concerns that I have in addition also to just how people are dealing with this individually. and so,I am honestly overall. a bit reassured in some concerns, like some things aren't as bad, but at the both individual level, as well as the industry level overall, I am glad we're having these conversations because I think, there are huge questions in terms of essentially how leaders today actually the industry going forward, and how we are one reacting to some of those things that are going on, but then also what we can do, as a community, but also as individuals to make this at least a decent place that people can like work in and do good things in without burning out.

Scott: I hope so. I really hope so.

Lena: Me too.

Lena’s Remarks & Recommendations

Lena: I want to share a couple of thoughts on what I took away from this and what I think it means for people in leadership positions or aspiring to leadership positions in tech right now. Overall, as I mentioned earlier, I'm not exactly a big optimist when it comes to tech. I've been for many years also talking about ethics and software development and the harmful impact that our industry has.

And I stand by those things. you can't exactly accuse me of too much optimism, but I will also say that for me, it did make me realize that things aren't as dire, especially for engineer leaders as they've been made out to be by a lot of headlines. And honestly, as I've Felt from a lot of the conversations I've had.

The rate of change in tech companies remains really high and that's likely going to continue. That's how tech operates and the latest trends over the last couple of years have continued that. A lot of things are very important in many tech companies. That's again, always been the thing and will likely continue as well.

Engineering leadership roles have been very loosely defined for quite a long time and they seem to be much more in flux even now. Many people talked about how their roles have shifted and how differently they spent their time.

And even though middle management roles haven't entirely evaporated as been rumored, it also means that growing into a middle management role is likely going to remain a bit more challenging than it's been previously. When companies were growing a ton, middle management roles just become more available, whereas that's not as much the case right now.

Now, what does all of this mean for you as a leader? I will say I've been thinking a lot about engineering leadership roles and how they change in this environment because that's my job and it's also something that I really care about. There is a lot of uncertainty that we're all dealing with, and I do believe that some of that is going to continue over the next years.

There are just so many factors that impact how this industry functions, even from a couple of things like we have huge election year this year in 2024 with elections in a lot of big countries, including the US, for example, globally, the economy has been in a really difficult state after the pandemic, which was impacted by supply chain issues.

Then a lot of other factors like interest rates, for example, which play out a lot in how venture capitalists operate. There have been a lot of other political developments, there are wars going on in many countries and a lot of humanitarian crises, which can impact economies, but also impact politics.

There are currently a lot of policy shifts ongoing. There are several cases in European Parliament, as well as US Parliament, And all of those are also going to play out on tech. And then there are, of course, the more quote unquote tech internal trends, like for example, AI. So it's a lot. And even as someone who follows those things a lot and considers that part of her job, it's oftentimes really difficult to make really accurate and confident predictions.

So that also means that I have some things I can share with you that I believe will be useful over the next couple of years. But I also recommend do the work to understand where you want to grow your career, figure out which skills you want to invest in, which things you are good at, which things you can still get good at and how to grow from there onward.

And that's honestly the first recommendation I want to give you own your own career and development. One of the survey results that we got was that a lot of people told us that essentially they are the ones who are owning their career growth. They are the ones who are attending meetups, who are organizing pair programming for themselves, who are connecting with other people to learn new skills, reading books, newsletters, things like that.

Companies on the flip side have decreased their investments in their employees growth. My personal and cynical take is that Investing in people growth, learning and development was a big thing when it was difficult to find really qualified employees over the last decade. Now that's changed a little bit, those investments have drastically plummeted.

That was my more personal, slightly cynical take. But the point holds the majority of leaders that we heard from learning grow their careers through their own initiative. Things you can do is for example, find or be a mentor, read books, follow industry and leadership newsletters and podcasts, or participate in trainings.

My second recommendation is invest in building genuine connections. I know most of us hate networking. Many of us, like myself included, probably also describe ourselves as introverts. And I personally genuinely understand that just networking for the sake of networking sucks. No one wants to do that. And honestly, there's no point.

But I've also found really good people in this industry. They're out there. There are a lot of people who care about the work they do, who want to get better at it. and find them. They probably care about the similar things that you do. And in times of uncertainty, it's really helpful to find people who you can be open with about what excites you, what challenges you, who you can also learn from, or get advice and support from, and to whom you can bring those things as well.

Join a Slack community. There are a bunch out there. Or connect with people at community events, set up a meetup. I once ran a leadership dinner table with just 10 people once a month at a dinner. Things like this can be really useful. My third recommendation would be to learn to speak about business impact because many engineering leaders were never trained on how to think about and shape business value through our engineering work.

This has always been an important skill, but now that money is a bit tighter in many organizations, it's even more important. It can also help you to set expectations with your stakeholders and make much better cases for which investments are needed.

Understand how your company goals align with the investments that your team needs to make. Learn to speak the language of finance departments and learn to convey what the business impact of your engineering work is going to be. Fourth recommendation, create visibility for the people around you. One of the biggest parts of our role as leaders is understanding the state that our teams and organizations are in so that we can adapt accordingly.

Situational leadership. If you're not already using metrics in your work, now is a really good time to get started. To help your teams not just understand how they're doing, but also improve and to give you a much better sense of how things are going and be able to convey that to your boss. I have a whole guide on that on my website, even if it's just for small and qualitative metrics, but get started now.

Fifth recommendation, get good at managing up. Things are changing at a really fast rate. And When that's the case, it's really important to stay well connected to your boss and to other business leaders. You should own making sure that they understand what you're prioritizing and how things are going.

So share with them on a regular basis, like start with weekly, share with them how you and your teams are doing, what risks you're seeing and your priorities. This is a really good way to take ownership, but it can also help you make sure that you're really aligned with people who you're working with.

Again, I have a whole guide to that on my website and link it in the show notes. Sixth recommendation, identify ways to grow your skill set when upward mobility is limited. Currently, positions in middle management can be harder to get if you don't already have that experience and your company may not be growing as much that you're ready to move on to something like this very soon.

You can still expand your skill set in a time like this. Look around for places to contribute. For example, the larger initiatives and programs that span multiple teams. Or grow your coaching and mentoring skills. Improve your technical skills in selected areas. Or work on your architecture skills.

Work more closely with business stakeholders. Just get creative. not being able to move to the next role doesn't mean you have to stay stagnant. There are still a lot of things to learn and a lot of things to get better at. And lastly, I want to pick up a point that Scott also mentioned, because it's one that really concerns me.

Watch out for signs of overwhelm and burnout in yourself and others, because managers and leaders have always done a lot of glue work, a lot of. Gaffer taping organizations together and that kind of work of holding teams and organizations together, especially in times of high change is really important, but it's also really intense and can be tiring.

All of that is even harder for many of us when expectations are unclear or changing at a rapid pace. So make sure to set boundaries around you and your team's work. Not all organizations are optimizing for a sustainable setup right now, but that doesn't mean that you have to just go along with this.

Watch out for yourself and for the people around you and take care of yourself.

You can find all links in the show notes, including a link to the report that we talked about at bit. ly slash ng leadership report.

Leadership Confidential was created, produced, and presented by me, Lena Reinhard. Theme, original composition, and mixing by Esteban Del Pino. Production assistance, guest support, and social media by Sly Stark. Thank you for listening. I'll hear you next time.

Lena Reinhard

Lena Reinhard (she/her, they/them) is a VP Engineering, leadership coach, mentor, and organizational developer partnering with leaders in the technology space. Having served as VP Engineering with CircleCI and Travis CI, and as a SaaS startup co-founder & CEO, Lena has dedicated her career to helping leaders and their organizations succeed in times of high change and challenging markets.

She has worked with a broad variety of companies at all stages, from startups pre-founding and bootstrapped, scale-ups, to late-stage/pre-IPO and VC-funded ventures, to corporations and NGOs.

https://www.linkedin.com/in/lenareinhard/