Technology Job Market: Reflections on 2023 & Expectations for 2024

Last year we reported a lot on  job market movements, “the great resignation” and “quiet quitting”. Throughout 2023, we have seen unusual trends with the continuation of people resigning / considering resigning from their existing role, coupled with high-profile redundancies and mass layoffs – not often things that go hand-in-hand. Whilst this has caused a lot of movement in the tech market throughout 2023, it looks set to regain some balance and stability in 2024.

Livingston James Consultant, Rachel Sim, shares some insight on current market conditions, as well as the opportunities for growth in the UK Tech Market.

 

Employment Opportunities within Technology

UK employment rates were around 75.9% at the beginning of 2023, an increase on the last quarter of 2022. This is said to be due to an increase in part-time employees and self-employed workers; and while the number of people payrolled by organisations fell in quarter 1, alternative employment routes appeared popular.

20% of people now have a secondary job to subsidise income and create additional opportunities: a great sign of innovation and entrepreneurship in Scotland.  Perhaps this is also an indication of people’s reluctance to rely on one employer, given the risk of redundancies which have been prominent over the course of 2023. This year has also been the first in which many tech professionals haven’t been able to secure new employment opportunities within a month of resigning.

Historically, high-profile redundancies often led to employees avoiding making a move to ensure they did not find themselves in a “last in, first out” scenario; however, this no longer appears to be the case. People are becoming more aware that longevity in an organisation does not necessarily determine security.

The number of open job vacancies fell throughout H1 of 2023, making it the 10th consecutive job opportunity decrease for two and a half years. Covid-19 was the catalyst for this trend, and economic uncertainty has caused this to continue. This creates increased competition for the limited roles available which can be challenging for candidates but works to the advantage of organisations, enabling them to have better availability and access to fantastic technical professionals.

 

Technology Sector Growth

Despite the challenges in the tech sector, experts and industry professionals are optimistic about growth and development. According to Scotland IS, over 87,000 people are now employed in the Scottish Digital Technology sector, making it an essential contributor to the Scottish economy; and 83% of Scottish organisations have plans for continuous recruitment throughout the rest of 2023 and early 2024.
Survey results found that organisations believe the greatest opportunities for their businesses are in “cyber security, data analytics and artificial intelligence”. With every organisation (regardless of sector or function) now reliant on tech to some extent, demand for highly skilled technical professionals will remain prominent.

With the continued skills shortage, gender inequality and lack of diversity in the tech sector, organisations must be conscious of creating an inclusive and diverse workforce. Women account for only 26% of the Scottish tech workforce, with all Scottish cities yet to achieve gender parity. The ecosystem can be shaped by encouraging more women and minorities into the tech sector, as well as ensuring access to support and development opportunities to allow their advancement and retention within the sector. By looking at alternative talent pools, organisations can embrace new ways of working and thinking which will support an innovative workplace and create unexpected opportunities.

Salary rates are levelling off and are set to stay around 4% growth annually, but they still account for significant costs to businesses. Whilst a job mover may expect a significant salary uplift, existing employees are often more realistic about salary increases. Therefore, ensuring regular salary reviews are in line with inflation and individual / company performance, will ensure that existing employees feel valued and incentivised to stay. This also creates opportunity for existing team members to become the leaders of tomorrow, nurturing existing talent and providing progression and development opportunities: key to loyalty and longevity with an organisation.

Flexible working has remained in high demand for employees and will continue into 2024. This is not only regarding working location but also working hours and patterns. An organisation’s ability/willingness to be flexible and adaptable will facilitate retention of its staff.

 

Personal Comment

Vacancies in cyber security, data and IT leadership have remained buoyant with great opportunities for mid to senior level technical professionals, but perhaps less opportunities for graduates and junior professionals. This is likely to balance out in 2024, as organisations become mindful of increasing costs, whist remaining committed to developing their workforce.

Several projects have been put on hold in sectors such as financial services, while BAU is the priority. This has impacted job opportunities for Business Analysts and Project Managers and may require these talent pools to consider alternative roles within tech (or other industries) in the coming months. However, this shouldn’t be a cause for concern; as an ever-evolving field, people in the tech sector are used to the pace of change and having to be adaptable. As technology evolves (particularly AI), many technical professionals will find they have to adapt their skillset to secure new opportunities.

With the Project Management and Business Analysis fields dominated by contractors, organisations may be avoiding securing higher day-rate workers in exchange for permanent staff. We have found that many contractors are now considering permanent employment opportunities due to the security and longer-term benefits, such as the pensions and paid holidays offered by permanent employment.

Despite the challenges of the tech market in 2023, the industry remains optimistic with hiring set to bounce back. Hiring will be conducted more sustainably in 2024 than the last few years, ensuring mass redundancies can be avoided. International opportunities will also be a key focus for organisations in terms of business opportunities and hiring skilled professionals.

There is enormous opportunity for the Scottish tech sector in 2024 and beyond. Our cities are making great headway in positioning themselves as market leaders with Edinburgh leading in the field of data. With continued investment, Scotland will be a leading market for tech start-ups, scale-ups and established organisations for Q4 of 2023 and years to come.

 

If you are looking for recruitment support to grow your tech team, or you would like a confidential discussion around your own career opportunities within tech, please get in touch with Rachel Sim: [email protected].

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