Ups and downs in tech jobs, wages

Published on the 03/04/2024 | Written by Heather Wright

Ups and downs in tech jobs, wages

And let’s talk about beyond-border work…

The tech sector is one of only five industries in Australia to record an increase in job ads in February, though it’s a different story in New Zealand – and the story on the wages front isn’t so positive either.

In Australia job ads for information and communication technology roles were up 0.6 percent for the month of February, bucking the national trend which saw job ads overall decline 2.5 percent over January, and 19 percent year on year.

“US and Australian organisations are dipping into the Kiwi candidate market for remote working.”

Science and technology (0.4 percent), advertising, arts and media; and sports and recreation were also up, with banking and financial services sector leading the charge with a 2.1 percent increase.

The Seek report shows applications per job ad continued to increase – up 2.9 percent month on month and 73 percent year on year – in a trend seen consistently for the past 18 months.

While that increase in applications was also seen in New Zealand, where a three percent increase in the number of people applying per job ad was seen, Kiwi information and communication technology job ads were on decline, dropping five percent for the month, ahead of the three percent decline posted for overall job ads.

The ICT drop pales alongside that of the construction, engineering, government and defence, HR and recruitment and advertising, arts and media sectors which plunged 12 percent.

Kendra Banks, Seek A/NZ managing director, says the overall decline in job ads in Australia was driven by slowing hiring activity across almost all industries in New South Wales and Victoria.

The increasing applications per job, meanwhile, point to a market that is still reasonably tight, with growing demand in certain industries, but which is a highly competitive space for candidates across the board, Banks says.

But if the job ads are still positive for the tech sector, at least in Australia, applicants might need to lower their wage expectations, with a separate report from Employment Hero showing median hourly rates for tech workers in Australia fell in the past year – dropping from $57.20 to $57.12. That decline gives tech the distinction of being the only sector to record reducing hourly rates. Other sectors rose at least six percent year-on-year.

The Employment Hero SME Index looks at the data of more than 1.5 million employees and 150,000 SMEs.

Eddie Kolwalski, Employment Hero senior data and insights, says the results indicate the tech sectors is undergoing a course correction.

Tech boomed during the pandemic, and low-interest rates further stimulated growth.

“Employee growth is also flattening,” Kolwalski says. “This indicates a cycle of fiscal tightening and a focus on short-term profitability across the board, both of which are now being felt on employees’ pay packets.”

Despite the decline, however, technology still has the highest median hourly rate across all industries in the report, and that’s not expected to change in the near-term, Kolwalski says.

“We expect the long-term trend for tech to be one of growth, but worker in this sector may feel the pinch a bit more than they’re accustomed to as we go through this adjustment period.”

The reports come as both countries grapple with ongoing skills shortages. Late last year, Australia’s first Jobs and Skills Report, Towards a National Jobs and Skills Roadmap, noted that nearly 70 percent of ICT professionals occupations are in shortage around Australia.

Technology and digital recruitment specialists Talent International says across Australia and New Zealand the tech hiring market is slowing due to the economic downturn, which is seeing a number of companies cut costs and tighten their budgets.

Talent Sydney recruitment expert Shane Hodgins says the project services space in particular has seen a slowdown with companies putting projects on hold.
“Generalist IT project managers are most affected by this,” Hodgins says.

But Talent Sydney managing director Matthew Munson says while a cooling of salaries has been seen across many job families, hard to find niche talent will always test the top end of what the market has to offer.

Cybersecurity, data analytics and cloud solutions candidates are still in hot demand and commanding top dollars.

Talent’s More than Money Salary Guide 2024 notes that cybersecurity salaries have increased 25-35 percent since 2023, with data analytics up 12-23 percent.

Contractors across cybersecurity, data analytics and cloud are also seeing rates increases of between 10 and 30 percent.

Talent says sourcing beyond borders is also on the rise. Munson says conservative estimates are that around 30,000 Australian companies are offshoring technical skills in a move that has accelerated over the last 12 months.

“The signs are that it will continue because local salaries are very high, there is a skills shortage and this move to remote work is making it a lot more appealing to hire people offshore,” he says.

The offshoring is, however, cutting both ways, with Talent Wellington recruitment expert Georgia Hynes noting that many organisations from the US and Australia are dipping into the Kiwi candidate market for remote working, particularly in the developer space.

And as to the future? Talent is bolshy about the tech hiring scene.

Melbourne managing director Simon Yeung says the IT job market is anticipated to experience growth, fuelled by the adoption of advanced technologies like AI, cybersecurity and blockchain by Australian companies. Meanwhile demand for skilled professionals in cloud computing, data science and software professionals is expected to rise as businesses continue to prioritise digital transformation.

“The market is feeling more optimistic than the last few months of 2023,” New Zealand country manager Kara Smith, says. “Just like we saw post-Covid, businesses can only halt projects, investments and initiatives for so long. In a world where cybersecurity is a top priority, investing in tech teams is a worthwhile long-term strategy.”

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