The impact of the cost-of-living crisis on tech recruitment
Since early 2021, the cost of living has been steadily increasing across the UK with the annual rate of inflation reaching 11.1% in October 2022 - a 41-year high. As a result, the Office for National Statistics (ONA) reported that 92% of adults in the UK reported an increase in their cost of living in November and December 2022.
Historical trends tell us that during periods of economic uncertainty, the wider business landscape becomes more cautious and recruitment in general, tends to slow. The tech sector, however, has always demonstrated resilience during such times and the latest research would suggest that IT spending is set to increase.
IT spending to increase
Despite a drop in retail spending in the UK over the last year, Gartner predicts that globally, IT spending will increase by 6.8% in 2023, to $588 billion. The research predicts that government IT spending is forecast to increase across almost all segments, including data centre systems, software, and IT services.
As such, we expect to see continued demand for tech skills across the UK and globally. For companies to remain competitive in a candidate-driven market, they need to understand what top talent is looking for in a role, and they need invest in technology that will reduce time to hire.
Tech skills shortage to continue
As IT spending increases, the need for companies to access specialist skills will become ever more important amidst the current skills shortage.
According to Tech Nation’s People and Skills Report 2022, there were over 2 million vacancies for tech roles between May 2021 and May 2022. However, despite UK tech salaries being 80% higher on average, research from Robert Half finds that 72% of tech teams report a crippling skills shortage.
Long-term, companies that don’t have a steady talent pipeline will undoubtedly lose out to the competition, both from a recruitment and a performance perspective.
An increase in tech salaries
Salary has always been a big driver for tech candidates and CWJobs’ Confidence Index 2022 revealed that 53% of tech workers expect their salary to increase over the next 12 months. It comes as little surprise then, that our recent Tech Hiring Insider report finds that 30% of senior leaders are looking to increase tech hiring spending to combat the cost-of-living crisis.
In today’s tech recruitment market, increasing salaries can encourage more passive candidates to apply for roles, while meeting the expectations of top talent, who have their pick of employers.
Industry-wide, this is an encouraging trend. Given that the cost of living is rising alongside inflation, tech workers will need to be paid more in order to maintain the same quality of life. From a hiring viewpoint, increasing salaries is a smart move as it’s more expensive to acquire and train new candidates than to upskill and develop existing employees.
How tech recruiters can attract and onboard talent during a recession
In addition to offering a competitive salary, tech recruiters can implement the following strategies to attract talent and onboard them quickly:
Stay up to date with market trends – Recruiters need to be aware of what’s going on in the industry and how candidate job searches and hiring process are evolving. Organisations that are flexible and have an employer brand that appeals to candidates are more likely to catch the eye of passive candidates. Likewise, embracing the latest tech recruitment software like CWJobs’ Applicant Tracking system ensures candidates receive a positive hiring experience.
Reduce time to hire – In a competitive market, recruiters need to onboard candidates quickly. Tools like CWJobs’ video recruiting software enables HR to set up meetings in minutes, work across any device, and conduct live video calls. The software can also be used to help companies onboard new staff remotely.
Build a diverse talent pool – In our What Tech Workers Really Want report, we found that 31% of employees consider a diverse team to be a factor in creating and maintaining a good company. Likewise, a 2021 McKinsey report revealed that companies that focus the most on racial and ethnic diversity are 36% more likely to have financial returns that are above average for their industry. Taking advantage of tools like Total Jobs’ Equality Boost can increase applications from underrepresented groups through targeted display advertising.
How tech candidates can stand out in the marketplace
To secure high-paying jobs in the tech sector, tech candidates need to demonstrate their value to a company. Here are our top tips for standing out in a crowded market:
Be aware of the latest technologies – As IT spend increases, we’d expect to see more companies embracing new technology to keep up with market trends, diversify supply chains and open up new revenue streams. As such, there will be a demand for candidates who have up-to-date knowledge on how emerging technologies like artificial intelligence (AI), Internet of Things (IoT), and edge computing can integrate with existing systems and databases.
Develop specialist skills – CWJobs’ internal insights reveal that the top three sub-disciplines posted on our platform in 2022 were Software Development, Support, and Infrastructure. Research from Robert Half also reveals that the hardest roles to hire for are Architecture, Leadership, and Cloud & Infrastructure. As such, candidates who have specialist skills related to these roles will stand out to employers.
Tailor applications and interviews to specific companies – Candidates should demonstrate that they’ve done their research on a company and can provide real value to their operations. Tailoring applications to meet the needs of a role can improve a candidate’s chances of progressing to interview. Likewise, during interviews, candidates should demonstrate that they understand the company’s market positioning and ambitions.