Tech salaries have skyrocketed in recent years, but a leading recruiter has warned that salaries are “starting to stabilize” as widespread economic challenges force companies to adjust their strategic plans and reassess their hiring requirements.
Despite a continued willingness to invest in “paramount” critical technology functions – infrastructure, governance and development, for example – many companies are likely to tone down their staffing intentions in other areas by 2023, Andrew Brushfield, director of Australian recruitment firm Robert Half, warned.
“The technology hiring climate remains robust and employers are constantly looking for highly skilled technology professionals to grow and secure their businesses,” he explains.
But when it comes to ‘non-critical’ or ‘nice-to-have’ projects, “we see contracts not being renewed and companies not expanding their teams.”
This overall cooling in demand – matching the loss of tens of thousands of jobs at reduce tech giants – has shifted the balance of power from job seekers, who have become more conservative in changing jobs than they were a year ago.
“The idea of a potential recession and an increase in layoffs in the technology sector across the industry has put a greater emphasis on job security,” said Brushfield, warning that in the past eye-popping salaries perhaps harder to find and note that “salary alone is not enough to get a candidate over the line.”
The recent CW Jobs Confidence Index 2022for example, found that only 77 percent of the more than 1,500 tech workers and IT decision-makers surveyed said they were confident in the current state of the UK tech industry.
This was down from 89 percent in 2019, and had dropped every year since then as general uncertainty dominated public discourse and career plans.
While “highly skilled technology talent remains well positioned to negotiate their needs with employers,” Brushfield said – particularly in areas affected by shortages like cybersecurity: Companies looking to recruit other types of tech talent need to do more than just throw bags of money at potential hires.
“Amid a time of uncertainty in the technology industry,” he explained, “applicants are willing to switch roles if they receive a fair starting salary for their skills, a degree of flexibility that promotes work-life balance , and an indication of job security.”
Reversal of fortunes
The renewed importance of job security as a result of the pandemic is diametrically opposed to workers’ nonchalance to get started, when the majority of workers said they were more concerned about being able to work remotely and access online communication and collaboration tools.
Many candidates have become accustomed to “sky-high” salaries – a recent Robert Half analysis found that CIOs are willing to pay an average of a 30 percent premium to attract the right candidates — and “with many employers previously paying above the market rate,” Brushfield said, many are still “asking for unrealistic salaries from time to time.”
That made for complex hiring negotiations, with employers eager to control costs while facing the very real impact of things like retirementgovernment changes professional visa policyand ongoing challenges that a cyber and general technique skill gap according to some left Australia “unprepared for the future”.
The need to balance strategy and hiring plans will likely be markedly different next year than other recent years, Brushfield said.
“Companies are unlikely to increase salaries further in 2023,” he explained, “and will instead move to other pay incentives, including tenure or sign-on and completion bonuses.
“The labor market is still tight, putting in-demand tech talent at the wheel.”