Insights
By Reece Pagett | 28th April 2023
Hi everyone! Q1 2023 seemed to pass by far too quickly, although it will hopefully mean the end of the cold wet winter and on to the best part of the year ☀
With numerous clients and candidates asking me what our opinion on the current market is, I thought I would share what the data from the reports and webinars that we have been provided recently is telling us about the tech market:
The recent economic data shows a positive outlook for the UK, as it shows that the UK continues to have slow growth and isn’t retracting, which was forecasted to be the case late last year.
In regards to wage growth, tech saw the strongest employment growth and wage gains since the pandemic. Tech saw the highest wage increase across recorded sectors, with median pay up more than 25% since the beginning of 2020 (compared to 17% for the rest of the economy as a whole).
We’re beginning to see these figures normalise, with wage growth stabilising in Q1 2023, which we suspect will continue through Q2 2023.
We’re also seeing VC firms being more cautious with their investments, opting to invest into a lower number of businesses, but still investing a similar amount of capital to ensure they maximise the run-rate of their portfolio businesses. This doesn’t come as a surprise to those close to the VC and PE investment space as throughout 2022, tech companies in the UK raised £24 billion pounds in capital, more than Germany and France combined!
IT and Tech has remained incredibly resilient and stable in 2023. Despite there being many layoffs in ‘big tech’, it’s worth bearing in mind that this appears to be a correction for over-hiring in 2022, rather than a reflection on the tech market as a whole.
More than 2 million tech vacancies were advertised over the last year, with an estimated 1 million positions in tech still vacant. Looking forward in 2023, according to Computer Weekly, 56% of digital leaders surveyed are expecting technology headcount to increase in 2023.
The most in-demand skills in Europe are reported to be within Cloud (43%), Cybersecurity (37%), Artificial Intelligence and Machine Learning (30%), Infrastructure (30%) and Data Analysis/Data Science (27%).
Despite an increase in job applications, the data from CW Jobs shows a marked difference between ‘sought-after’ skills vs candidates actively applying for positions. For example, ‘.NET Developer’ was the most advertised tech role in Q1 2023, yet comparatively, the number of candidates applying for these roles didn’t even rank in the top 10 role type.
On the other hand, Business Analysis positions ranked highest for the number of applications per role, despite the number of roles posted once again sitting outside the top 10.
Another positive market trend is that nearly a quarter of professionals in tech are now female, and 28% of new hires last year.
We recently hosted a free-to-attend seminar on Equity, Diversity and Inclusion and will work with our clients in 2023 to continue improving equality and diversity in tech, you can read the ‘7 Golden Rules of Inclusion Management’ from our event here: https://absolute-recruit.com/dei-7-golden-rules-of-inclusion-management/
The report suggests that the average time to hire has jumped from 4.4 weeks to 6.4 weeks from Q4 2022 to Q1 2023. In recruitment, you’ll often hear the phrase ‘time kills deals’ and unfortunately, that is very often the case! Remember that even passive tech candidates will have numerous options, don’t let your process be the reason you lose out on the best talent available to you!
Earlier this month I ran a survey on my LinkedIn asking the question “from releasing a vacancy to making an offer, how long do you expect it would take to hire a position in your team/business?”. Of 136 votes, the responses were:
The poll seemed to match the data being produced from the reports in that the majority of recruitment processes are taking in excess of four weeks. Interestingly, the majority of those working in ‘tech’ positions were those who voted for a longer time-to-hire.
A recent survey of 2000 tech employees showed that on average, tech workers were approached about new opportunities an average 3.61 times a month. From these approaches, 30% never reply, and 20% reply to just one approach per month.
When asked what makes an individual most likely to respond to an approach, the results showed that salary is still the ‘number one attention grabber’ across men and women (46%), followed closely by benefits (41%) and job relevance (32%).
Of the 2000 tech employees surveyed, an incredible 57% of tech workers had changed jobs in the past 12 months, and 73% of those surveyed plan on changing jobs in the next 12 months. When speaking to their motivations, stability was the most popular reason behind a clear move at 45%.
Although salary remains the key motivator, benefits that improve quality of life and work-life balance remains a significantly important factor in a candidate’s decision-making. Just over 1/3 of those surveyed would choose access to top benefits (healthcare, medical, income protection, insurance) in lieu of a pay rise.
A strategy around talent retention should be at the forefront of every talent function’s planning for 2023. With most tech positions becoming more challenging to find and secure talent, keeping your current employees has never been more important. Here are some actions you can take to ensure you are attracting and retaining the best talent:
1. Identify the skill gaps in your business. This sounds obvious, but that’s because it is! Being aware of the skill-gaps in your business and teams will not only allow you to hire the right external talent, but also provides an opportunity to up-skill current employees which improve their skillset and career growth, but will also positively impact your retention.
2. Ensure your processes and culture promotes diversity and equality. This will ensure you’re benefiting from different perspectives, whilst also ensuring your business is inclusive and offers a positive working environment.
3. Showcase your business! Recognise your offering and ensure you are promoting (truly) competitive salaries, benefits and importantly, career progression.
4. Streamline your recruitment process. Is every step in your process essential? Can you streamline the timeframe? Can one interview step become part of your onboarding process? Considering these questions will prevent you from losing out on the best talent.
5. Balance entry-level and experienced talent. Hiring junior talent will allow for career progression and new perspectives, with the experienced talent sharing their expertise and upskilling your up-and-coming talent.
6. Choose the right recruitment partner! Having a partner that knows your culture, future plans, values and is a specialist in their market will mean your business is represented in the best possible light to candidates.
If you would be interested in discussing any of the above insights in further detail, or would benefit from reading some of the source material for the above data, please don’t hesitate to contact me directly 👇🏻
