In 2023, the value of software engineers may surpass that of capital, as AI technology continues to advance.

• According to a recent survey on hiring trends, software engineers are still highly valued and could even command triple their current salaries.
• Organizations may find the value of generative AI in automating coding and software development tasks.
• According to Daan van Rossum, host and writer of the “Future Work” podcast and newsletter, the lines between engineers and non-engineers may blur.

Will generative artificial intelligence shift the perception of software engineers being more valuable among company leaders, even during high interest rates and expensive borrowing?

In Karat's 2023 Tech Hiring Trends report, 62% of software and talent leaders consider software engineers more valuable than capital, while 55% of respondents believe that software engineers are worth at least three times their total compensation, an increase from 45% in 2022.

Arjun Bhatnagar, co-founder and CEO of Cloaked, emphasized the importance of finding the right engineer for the right company at the right stage, stating that it can greatly amplify the success of the company.

The use of generative AI in software engineering could change the way knowledge workers function and their perceived value to organizations, with approximately 17% of them currently using it to automate coding and development tasks, as stated in the recent FlexOS report on the future of work.

FlexOS founder and CEO Daan van Rossum predicts that the increasing use of AI technologies like ChatDev, screenshot-to-code, and "GPT for coding" will lead to a future where the boundary between engineers and non-technical professionals becomes less distinct.

Nearly three-quarters of workers who have used AI say the technology has made them more productive, but also more worried about their job security, according to a survey conducted by CNBC and SurveyMonkey. Meanwhile, companies across the economy are planning to accelerate spending on generative AI software like Microsoft Copilot over the next six months, according to a recent bi-annual CNBC Technology Executive Council survey.

Van Rossum stated that even the most skilled engineers will still be valuable until they are no longer needed, as AI becomes better at coding but problem-solving and innovation will remain human functions.

Lareina Yee, senior partner at McKinsey, believes that software engineering will remain relevant in the future as the company deploys its large language model, Lilli, to its employees.

The McKinsey Technology Council chair, Yee, acknowledges that software engineering has been a highly sought-after talent category over the past decade due to the rise in software applications and technology adoption across various sectors. According to her, while generative AI may not completely alleviate the shortage of software engineers, it could potentially ease the pressure.

AI as a power tool

AI can assist software engineers with tasks such as code documentation review, code generation, code refactoring, and modernizing legacy software languages. Yee stated that AI can be used as a powerful tool by software engineers to provide innovation, insight, and judgment.

McKinsey's research shows that AI can cut time spent on simpler tasks like code documentation in half, but the time saved decreases as tasks become more complex. Complex tasks include examining code for bugs and errors, contributing organizational context, and navigating tricky coding requirements.

Recognizing the fast pace of innovation, Yee stated, "We must add a significant disclaimer that this is solely the capability of the technology at present."

Stack Overflow, a widely used platform for programmers, has experienced a decline in website visits due to the integration of AI applications into the workflow of professionals. Some sources claim that the decrease in traffic was as high as 35% in 2023. However, Stack Overflow refutes this metric by stating that they only lost about 5% of traffic annually. This could suggest that AI is streamlining the daily tasks of software engineers.

What will organizations do with the extra time their software engineers may have? They could tackle their backlog, prioritize innovation, reduce the need for workforce growth as they expand, or explore other options.

Yee stated that there is no definitive solution to this issue. She emphasized that this experience requires both leadership skills and sound judgment, and that AI cannot provide the answer.

Bhatnagar believes that ideating, innovating, and developing new solutions is the most effective way to make the most of time. He said, "You're only as good as your worst person." If the worst person also has time to innovate, then the entire company will innovate from that point on.

Jeff Spector, president and co-founder of Karat, emphasizes that the creative aspects of development, such as problem comprehension and solution design, will be prioritized over low-value boilerplate code. He explains that the team will focus on integrating other concerns like security, privacy, usability, and performance, allowing them to elevate their daily work.

Job satisfaction and churn in tech engineering

By elevating this work, we can reduce employee churn in the software engineering industry by enhancing job satisfaction.

McKinsey found that the use of generative AI led to a significant increase in the happiness of developers at work. Specifically, those who strongly agreed to feeling happy at work jumped from 15% to 50%, while those who strongly agreed to being in a flow state jumped from 25% to 44%.

Bhatnagar believes that the field of software engineering and technical engineering as a whole will undergo changes. He predicts that all types of engineering will merge into two categories: creative problem solvers and deep scientists. According to him, the individual who will succeed in the field in the face of constant innovation is someone who is passionate about creative problem-solving or has the potential to become a better scientist.