Is the IT industry returning to its pre-crisis form? – Awareson report.
More than half of IT managers admit to budget cuts – this is currently the most frequently mentioned problem by them. Every sixth manager had to reduce employment this year, and every tenth still faces such a risk. At the same time, global IT spending is on the rise, and more and more companies are thawing frozen projects. Is the hi-tech industry slowly returning to form, and what does it mean for half a million specialists working in it?
Having your cake… and eating it too
Managing a trimmed budget is a challenge, as indicated by the majority (57%) of IT leaders surveyed in July this year by Awareson, a technology advisory company. In these challenging circumstances, 37% of them plan to increase the number of projects, 12% will make cuts, and another 10% are postponing decisions – according to the latest Awareson report, “Who’s Calling the Shots Here: The IT and SAP Job Market in 2024.” Some companies in Poland are slowly resuming halted projects, while others hope for a rebound in early next year. According to Gartner, IT investments globally will grow by 8.6% to $5.04 trillion in 2024, and the market believes that these forecasts will prove accurate.
Salary Increases or Cuts?
Over the past 3 years, IT salaries have been increasing by 15-20% annually, and in some technological areas even two to three times. This year, the growth has slowed.
– A new development compared to last year is candidates’ openness to wage negotiations: in the case of a developmental and long-term remote work project, candidates are willing to compromise and lower their financial expectations – says Anna Szczepowska, CEO of Awareson.
Close to half of the surveyed specialists are satisfied with their salary. The most satisfied are experts with over 9 years of experience, with a satisfaction rate of nearly 70%. In the case of juniors, it’s already half as low. Junior professionals are the ones most counting on salary increases. Almost 90% of them expect a raise in the next year (for the entire surveyed group, it’s 79%), with half of them expecting increases of over 15%. Similar expectations are held by only every fifth expert and every fourth senior. What do employers think about this? Nearly 70% of IT companies are planning raises, mostly up to 10%, which is below the inflation rate. One-third of employers will either maintain current salaries or be forced to make cuts. Therefore, candidates’ expectations are much higher than employers’ capabilities.
Shortage of Specialists Continues
Despite layoffs in the IT industry, the shortage of candidates is still noticeable. This is the second most frequently mentioned problem by IT managers. And for now, there is no indication that it will disappear. IT spending forecasts indicate that at least until 2026, the market will grapple with a shortage of specialists.
– From my perspective, the biggest challenge is still the lack of suitable candidates. I don’t mean people who know all the latest versions of the technologies used in the project, but those who are willing to learn them – says Michał Kasprzyk, Head of Alcon Global Services Regional Center, in the Awareson report.
Despite the slowdown, almost 62% of companies are expanding their teams. Demand from abroad is also increasing, as international corporations are hiring our still cheaper employees. New challenges are emerging: there are more job postings, but the selection process is becoming more difficult.
Data, AI, and Cloud at the Top
Candidates’ situations depend on their experience and technological stack. Seniors and experts are in high demand. On the other hand, the situation for employees with 2 to 5 years of experience is deteriorating. Mid-level developers, who confidently entered the market with expectations (sometimes inflated and higher than seniors) last year, are now much more flexible. Juniors are having a harder time. In the face of the slowdown, companies are trying to retain the most productive employees, usually independent seniors and experts, without creating new positions for juniors. What seems logical during a crisis may result in an increased talent shortage in a year or two.
– It’s difficult to predict the future, but the development in the field of AI suggests that machine learning and data specialists will be increasingly sought after. However, it doesn’t appear that job advertisement rates offered in the industry will significantly increase in 2024 – says Krzysztof Kempiński, the host of the popular podcast “Porozmawiajmy o IT” and co-founder of the SOLID.Jobs job portal for IT positions.
When it comes to technology, salaries are increasing in the areas of ERP, security, cybersecurity, as well as for cloud solution specialists and architects. Competencies related to AI, Machine Learning, and data processing are highly valued.
Remote Work in Focus
The Awareson report shows that in the near future, negotiations between candidates and employers will not be primarily about salaries but rather about the return – at least partially – to offices.
– Remote work is not only about easier access to a larger pool of talents for IT leaders but also about challenges related to managing remote teams, assessing their effectiveness, and, above all, dealing with a decrease in employee engagement. That’s why in the Awareson survey, as many as 27% of IT managers declared that they would want to increase the presence of specialists in offices next year – says Anna Jaglińska-Prawdzik, Head of Marketing at Awareson and coordinator of the study.
A significant group of candidates will resist this shift: 26% of specialists declare that they want to work exclusively remotely, while another 23% are open to being in the office at most once a week. The challenge will not only be convincing employees to be present in the company’s offices more frequently but also reshaping the rules for building culture, mentoring, and teamwork.
The Awareson report “Who sets the termes here. IT and SAP job market, 2024” is based on four surveys conducted in mid-2023 among 700 IT and SAP specialists and 69 IT companies or departments in Poland.
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