Why technology jobs are proving resilient
As 2023 dawned, the path that the technology recruitment market would take was extremely unsure. We had seen two growth years on account of pent-up demand in the course of the pandemic, however with draw back financial indicators gathering – rising prices, rampant inflation, rates of interest rising – would that maintain?
We trusted our instincts and predicted that the market could be resilient, given tech’s “protected” standing. The digital transformation agenda is solely an crucial that organisations must preserve investing in, and for that they want folks and expertise.
A extra settled market
Six months on, we’re happy to say that this has been borne out. In truth, our everlasting placement mandates within the first quarter of this 12 months had been on the similar stage as in 2022, one of many post-Covid growth years.
Nevertheless, exercise ranges have eased because the 12 months has gone on. But that is no dangerous factor – the market was shifting at breakneck pace earlier than. Now, it has settled, changing into much less frenetic and extra measured. We are in all probability again on the form of ranges we had been at earlier than anybody knew what a coronavirus was. Organisations are contemplating extra rigorously earlier than going out to rent; they’re taking a breath and reflecting earlier than they difficulty a suggestion; it’s not the identical frantic aggressive whirl because it was once.
Candidates have additionally change into a little bit extra measured. In a tighter market and financial system, they’re weighing up extra rigorously the potential advantages versus the potential dangers of a transfer.
Sector variations
It can be a market with perceptible variations by sector. Big Tech gamers, after all, have been resizing their workforces which sadly has led to some fairly important lay-offs. However, this development has been slowing and certainly we’re now starting to see indicators of an uptick in some areas.
The SME finish of the technology market has been affected too. With funding for scaleups and startups tougher to safe (there was a 55% drop in tech startup funding in the US throughout Q1 for instance), their recruitment has been impacted and hires have change into extra selective and focused on particular goals. Meanwhile, sectors that are very depending on shopper demand like retail and FMCG have additionally been much less lively.
Other sectors, nevertheless, have been very resilient and proven little change. Public sector our bodies and better schooling establishments, for instance, have key strategic digital transformation programmes and necessities and this has seen them persevering with to recruit. Financial providers has remained busy too, with the massive gamers bulking up of their core companies, though on the challenger finish there was one thing of a tightening.
Overall, there are 4 notable tendencies that are price calling out:
1. Contractors
A characteristic that we predicted six months in the past was a shift (comparatively talking) from everlasting to contractor hires. In truth, we are solely simply starting to see early indicators of that now – one other indicator of simply how resilient the market has been. However, what we’ve been seeing amongst contractor hires is that employers are bringing useful resource in for particular and outlined duties – and when these are full, they’re extra more likely to let the contractors go fairly than discovering one thing else for them to work on.
2. Demand for a brand new wave of digital leaders
An space of robust demand is for digital leaders and executives. For bigger enterprise shoppers specifically, there’s a want for a brand new wave of digital leaders who can drive the enterprise ahead on its digital journey as they pivot to product-led, cloud-based environments and techniques. Organisations want leaders with the agility and adaptive expertise to navigate altering working fashions, technology disruption, financial challenges and unpredictable world occasions. They want to seek out the “Ted Lassos” of technology in a world the place the one fixed is change.
3. Generative AI disruption?
On the change and disruption entrance, we are able to’t write this with out not less than mentioning generative AI akin to ChatGPT. The impression this might have on what folks do vs machines and subsequently on hiring wants is solely an unknown as of but. But it’s sure to be a disruptor. We encourage each CIO, CTO and CDO to discover generative AI as totally as potential and assess what potential it might maintain for his or her enterprise. One study from Github, Microsoft and the Massachusetts Institute of Technology (MIT) discovered that Copilot for Github elevated developer productiveness by 55.8% for instance.
4. Salary warmth starting to chill
Another scorching space, after all, has been salaries. It’s very a lot the subject of the second on the broader macro-economic stage, with the Bank of England highlighting wage will increase as one of many precept drivers of nationwide inflation. Last 12 months’s Digital Leadership Report discovered that over half of digital leaders had been involved that wage will increase in tech had been unsustainable.
Six months in the past, we expressed the view that tech salaries would probably start to plateau. There are indicators that that is starting to occur, even when the development continues to be upwards. Certainly, salaries and contract charges haven’t gone on rising on the dizzying pace of a few years in the past. This moderation is sweet information for employers who are having to observe budgets and expenditure extraordinarily carefully.
A good outlook
The market is in a reasonably wholesome place, and we count on this to proceed via the second half of 2023. Indeed, with hopes that inflation will lastly start to fall and value pressures cut back, we may even see a renewed acceleration in exercise as optimism picks up.
While expertise shortages stay a problem, significantly in areas akin to cloud/DevOps, engineering, information analytics and product specialists, it’s a good marketplace for each recruiters and candidates, with alternatives on each side.
