The end of 0% interest rates: what the new normal means for engineering managers and tech leads
We’re likely to see a preference for flatter organizations, fewer managers, and a preference for the “player coach” leadership model. Some changes present new opportunities to shine as leaders.
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This article is part 3 in a 4-part series on the end of 0% interest rates. Other issues cover:
What it means for software engineers(Part 2.) A tougher job market, harder to negotiate offers, slower career growth, and higher performance expectations.
What it means for engineering managers(Part 3, this one).Fewer EMs, more responsibilities for the rest, the rise of the tech lead role, and an opportunity to build more cohesive teams due to lower attrition.
Today, we turn our attention to how the economic environment changing for engineering managers, covering:
The trend of fewer engineering managers. Starting about a year ago, more companies have aimed to “flatten” tech organizations, and this means fewer middle managers and line managers.
How the engineering manager career path are changing. Managers take on more responsibilities, the job’s harder than before, and a tougher market for line manager EMs who don’t want to (or cannot) code.
The rise of the tech lead role. For years, line managers had good reasons to stay hands-off, but this is changing. The “player coach” role could well make a comeback, and tech leads could replace engineering manager roles in some companies. There are tradeoffs to this that organizations would have to manage, of course.
Improving job security, as an EM. Becoming more hands-on, strengthening your network and being aware on how tenure is becoming more relevant.
Opportunities these changes bring. ICs with manager experiences likely to be preferred for staff+ positions, the opportunity to build more cohesive teams and the pendulum eventually swinging back.
1. Fewer engineering managers everywhere
A year ago, this trend of fewer middle managers began, and has kept spreading. Big Tech companies like Meta and Google and scaleups have been shedding engineering managers in an effort to flatten organizations. And it’s not just firings; last year, Meta told several managers they were welcome to take a step down and be individual contributors – or leave the company. I said at the time:
“The goal of this exercise [converting managers to ICs] is to flatten the organization. While this will reduce the number of managers, at least for engineering managers, everyone expects the IC route to be an option.
Based on my conversations, plenty of these engineering managers won’t mind returning to being an IC, and some will be very happy to. As a general rule, someone’s levels do not change when transitioning to and from a manager role. So when an IC6 transitions to a manager role, they become an M1. And should this M1 be asked to be an IC again, they become an IC6. Here’s the table for mapping manager and engineer levels:
IC engineering and manager levels at Meta. Compensation is about the same across levels, and transitioning between them could be necessary for some, soon. Image source: A Trend of Fewer Middle Managers?
Not all companies offer an internal transition, though. When Square let go about 1,000 people recently, an insider told me there was an unusually high number of managers. Of course, not all companies follow this pattern: Lyft let go 26% of staff (1,070 people) in the summer of 2023 and 3% of those who opted into their details being shared were engineering managers.
Fewer engineering managers predicts some things:
More direct reports per manager. Fewer managers with an unchanged number of engineers, means more reports for managers.
Less 1:1 career development. The more direct reports you have, the less time there is for individuals’ career development, as you’re likely to be spending more time elsewhere. Also, assuming that voluntary regretted attrition is trending down within your company and team, spending more time on career development is not what your company’s leadership expects.
More reliance on tech leads. With more reports, you’ll have more projects to run. You won’t have capacity to do it alone, meaning the need to delegate. It’s logical to start relying more on senior engineers who can lead projects, mentor engineers, and stand in for you when needed. It’s smart to invest in identifying and growing these leads. You will need them to help you scale leading a larger team. Here’s a recap on empowering engineers to lead projects.
“One person today is expected to do the job of 3 people a few years ago.
Engineering managers are expected to architect, manage, debug, and code.
Product managers are expected to strategize, execute, QA, and talk to customers more directly.
Tech leads are expected to scope projects, mentor people, code, and manage junior engineers.”
2. How the EM career path is changing
Managers do less hiring, and more of everything else
A major change across almost all tech companies has been the slowing of hiring; including engineering, due to a new focus on efficiency, and less access to capital. Previously, venture-funded companies and Big Tech often hired ahead of time, and bootstrapped companies did the opposite by making hires as late as possible.
Decreasing recruitment is a massive change for engineering managers. This means less time spent on it, onboarding, and navigating an organizational structure that used to change often. Indeed, this is one reason engineering managers will start taking over technical program manager (TPM) roles:
“In an organization where hiring is limited to backfilling, teams change much less frequently, and almost all the above activities drop significantly. Engineering managers spend the most time on helping their direct reports to grow, but this no longer takes up all their time. So, yes, those managers would have additional capacity to lead cross-organizational projects. In fact, doing so could provide a challenge, which is better than devising “busywork” that doesn’t meaningfully help the organization.”
Companies less consumed by growth will likely now expect engineering managers to do more stuff with their newly available capacity, like managing complexer projects, coding, doing more in product, etc.
Consider a proactive approach to evolving your role. How will you allocate your additional capacity to help your organization? Figure out where you can add value, discuss with your management chain; and if it makes sense – do it!
If you go passive and appear to be avoiding new responsibilities, one might be handed to you, anyway. Worst case, your role itself could come into question if the management chain assume you’re doing less than before, given that most of what you do is now beyond scope due to lower growth.
Being a manager is harder than before
During the “good times,” of rapid growth, being a manager is rewarding. You hire lots of enthusiastic people, get existing engineers promoted, and when the work gets too much, another new joiner brings fresh energy to the team. Time flies when things are good.
Managing during a downturn is emotionally draining, with little support. When a company is doing poorly, the motivating parts of the job are fewer, like hiring, starting greenfield projects, and promoting high performers. Instead, there’s:
Planning and executing a layoff handed down from above. We previously covered how to do these humanely
Learning about layoffs as a line manager at the same time as everyone else
Trying to restore morale after a downsizing
Resignations on the team
Low morale and fear of further cuts
Having to put a brave face on for team mates affected by decisions you didn’t make
Personal job worries, as manager positions are at higher risk than ICs
… all during lower pay rises, smaller bonuses, and less compensation than before
More managers return to ICs, or take a break
Many engineering managers and directors I’ve talked with are unhappy. Some disagree with decisions their leadership makes, others are disappointed about how layoffs were decided or executed, and some see their teams are shrinking, while their role isn’t the same one for which they joined the business. So, what can managers do when it’s time for a change?
Get a new manager job, although the grass may not be “greener on the other side.” Two kinds of companies are hiring engineering managers, right now:
Healthy, growing business which need managers to keep growth going
Companies that need to backfill a recently-resigned manager. These businesses are usually not doing well
Switching to a #1 company that’s growing is what most managers would likely pick. However, there are far fewer high-growth tech companies in the current economic climate, and these manager positions at these places are highly competitive. So, if you get an offer, it’s more likely be a #2 company, one that’s perhaps struggling. Not much will be different from your old role, and it’s likely to be similarly draining.
You could go back to being an IC, and act as a hands-on tech lead. This is a path I’m observing many former managers take who used to head up smaller teams. Several had titles like director of engineering or head of engineering, while working with small enough teams.
A former head of engineering got “demoted” at their startup to a senior engineer position in an interesting way. They’d joined with the mandate to grow the team, but the company cut engineering budget soon afterwards, and a cofounder decided to take on managing the engineering team. The head of engineering had to either work as an engineer, or leave the company, so, a few months later, they quit for a staff engineer role elsewhere. Talking to me, they shared that they realized they really missed writing code. Plus, being an engineer means less politics and more job security than being a manager does!
Take a career break. If you’re a manager at a company that has been doing poorly, including one or more rounds of layoffs, then you could be at risk of burnout. Managers have a lot of emotional work to do, but leaderships rarely offer support for this. It’s assumed managers can take care of themselves and their team – that’s why they are paid, after all!
If you notice symptoms of burnout, should you keep pushing in an increasingly demotivated environment, or look for a new job? If you have sufficient savings, there could be another option: take a career break. Once you have your energy and motivation back, then get back on the job market. Engineering manager Karthik Hariharan did this; he quit his position at Roblox, and took time for himself. Then he joined a new company as VP of Engineering, re-energized, and shares this advice:
“I've chatted over the past few weeks with people evaluating whether to pursue new CTO or Head of Eng roles at startups. Many are quite burned out from the last few years at bigger tech companies.
My feedback to a lot of these really burned out folks is to take time off, instead.
If you jump into the arena now, you'll be given nothing but a wooden sword to defend yourself. Make sure you're ready for it.“
Tough job market for engineering managers unable to code
There used to be non-tech companies that employed non-technical managers as engineering managers, but no more, reports a recent article in the finance publication, efinancialcareers:
“I have two decades' experience as a technologist in an investment bank. However, I am not a developer. My specialism is managing developers. Now that I have lost my job, I am finding that this is not a skill that is much in demand.
I stopped coding a decade ago, because although I wasn't bad at cutting code, I knew that I wasn't great at it. I decided to focus on my strengths, which are managing senior developers and making sure that teams get stuff done. It was easy to do that in banking: every software team has someone who removes blockers, organizes workflows and goes to meetings. That person was me.
Now that I am no longer needed by the bank, I am finding that this role doesn't appear to exist in smaller fintech firms or in hedge funds. They don't seem to have developer managers, just senior developers who manage themselves. This is particularly the case at hedge funds, where all the roles I see are for people who are at least 80% hands-on.
What do I do?“
Two interesting details in this story:
Non-tech companies used to want to hire increasingly non-technical managers.
This demand has vanished, even from “traditional” employers like banks.
It’s a good reminder that career security as an engineering manager, is tied to staying close to where the work happens and the code is written.
3. Rise of the tech lead role and of “player coach” managers
