Market Outlook: What Does The Future Hold For The Tech Recruitment Industry?
The number of tech job openings throughout the UK has been at a record high since February 2021. In fact, it’s one of the most buoyant recruitment markets to have ever existed.
It’s hardly surprising – the global health crisis made the world more reliant on technology services than ever before. But with rumours of a cooldown, what does the future hold for the industry? Cathcart Technology’s Sales Director Stuart Manderson shares his thoughts…
How the pandemic created a perfect storm
Not only did the Covid-19 pandemic expose a stark dependency on technology in our daily lives, but it also spurred technological innovation – with tech companies recognising the need to rapidly develop ways to maximise workforce productivity and essentially keep the world turning. The IT industry’s fast-tracked growth then created a perfect storm of staff shortages, driving salaries up while companies struggled to source engineers at the rate needed to fill positions.
Another factor which has had a significant impact on the market today is Brexit and the subsequent loss of access to the EU market. Whereas previously employing skilled IT professionals from the EU was a fairly straightforward process, there’s now much more red tape involved – and companies are required to be on certain frameworks in order to accept EU citizens. With the majority of hiring managers typically looking to fill positions fast, examining horizons beyond the UK has become a much less appealing option.
Connecting the dots from education to employment
Now, let’s trace things back to school level. Certainly when I was in school, there was little to no information about the useful, versatile range of technical skills that IT can equip you with – not to mention how lucrative a career in the tech industry can be. Much the opposite, in fact – IT seemed to be a class reserved for nerd culture, and women especially weren’t necessarily encouraged to pursue it as a career.
Sadly, these are factors which continue to prevail today. Without careers advice in school aligning with the reality of the working world, we’re not setting society up for what it needs in terms of the employment market. From where I’m sitting, as opposed to blanket advice from one dedicated careers guide, it would be much more beneficial to send real industry professionals into schools to offer practical advice.
The advantages of a candidate-short market
In some ways, the current state of the market has put the tech recruitment industry at a significant advantage. For instance, the average salary of IT professionals has increased by 35-50%. A couple of years ago, developers with two years’ experience would have been offered an annual salary between £30k and £35k – today, they’re looking at a minimum of £50k. Since many recruitment companies charge a percentage of salary for job placements, finders’ fees have also increased.
What’s more, the dog-eat-dog nature of recruitment in a candidate-short market means hiring managers have no time to spare when it comes to filling vacancies. As a result, they value the work of recruitment agencies much more – that’s certainly the case here at Cathcart, where we specialise in the advancement of technology teams.
The impact of economic uncertainty
Back to the current climate, and it’s impossible to look at the future of the tech employment market without first examining the economic landscape. There has been much reporting about the UK’s cost of living crisis and looming recession, which will undoubtedly impact recruitment as rising inflation and energy costs mean business owners will be much more reluctant to hire. However, it’s worth bearing in mind that the need for experienced IT professionals still very much exists – and prioritising staff retention is more important than ever. Recruitment agencies are the difference between simply filling a gap and hiring top talent that will generate immediate and long-term results.
It’s also worth noting that the 18-month hiring boom we’ve been experiencing is one of the biggest in recruitment history. With this in mind, any sort of hiring lull is bound to feel as though the market is coming to a halt – when in truth, things are slowing down to a normal pace.
Why business development is key
If the tech recruitment industry wants to continue to thrive, recruiters need to adapt to changing realities – particularly in terms of business development. Throughout the past 18 months, hiring managers have been banging down recruiters’ doors for countless job placements – essentially eliminating the need for business development strategies to an extent, as much of recruiters’ work has been powered by necessity.
Now that the market is beginning to slow, there’s still the same number of recruiters out there – if not more – fighting over a much smaller amount of business. As for who will win this fight, the answer is simple: the more skilled recruiter. Competitors will be chasing your clients, so it’s vital that recruiters don’t become complacent and instead continue to expand their team’s capabilities and expertise with regular training sessions.
Our niche keeps your competitive edge
If you’re looking for advice on how to protect your position in the current market or equip yourself with the staff you need to succeed in the future, speak to one of our expert consultants today. Our complete dedication to technology recruitment sets your team apart from all the rest.