How the Tech Market Feels FY23

Welcome to the first of our How the Tech Market Feels reports.

This report is a concept that originated from a brief conversation with a few clients.

It has now come to life and developed into a fair representation of how the IT industry feels about the changing nature of work in the wake of COVID.

The supply and demand of talent in the Australian technology economy recently underwent a seismic upheaval. We were curious to see how this has changed. Not just in how companies had to reconsider their hiring strategy but also how employees felt about their connection with their relationship with employment.

We’re the first to admit that in hindsight we could have asked different questions, and we’ll be applying that thinking in our next survey.

In total, we amassed 5800 data points that we feel give us real perspective and sharper insight into how the market feels at this point.

Our hope is that you find something of use, or of interest and maybe even something that can inform some of the decisions you’re having to make.

So with that, here’s our first How the Tech Market Feels report.

For Employers

Our respondents were predominantly SaaS or Technology Consulting firms with their Head of Talent Acquisition, Head of People & Culture and HR Director levels making up 83% of our contributors.

1.

Half of Australian tech companies have had their business priorities impacted by the talent shortage

Some teams cited delays in being able to activate initiatives due to the unexpected time to hire critical skills, others stated that increased salary expectations forced them to rethink which initiatives should get funded.

Additional commentary implied that some business leaders wouldn’t act until members of the C-level suite actively voiced their concerns. This suggests to us that for many companies the talent function is still seen as an operational function and is not necessarily aligned with the strategy of the business.

Talent availability in FY’22

In our discussions, we’ve been hearing about the impact of the talent shortage on business goals.

We asked: In the last year have you had to change any major business initiatives (such as Internal Projects or Product Launches) due to an inability to hire the required skills in the time frames needed?

2.

The tech talent crisis forced many companies to re-evaluate their FY’23 plans

Multiple respondees stated that lower priority work and nice-to-have projects were de-prioritised.

However, revenue-generating and customer impact initiatives were absolute priorities and this was where hiring efforts were being directed.

As the COVID-induced rapid digital adoption took hold, many companies went all in on maximising the ability to deliver on customer demand. For some this worked, for others it didn’t.

Talent availability in the future

Some businesses have also changed how they think about their future targets.

We asked: Has the current talent market forced the business to rethink its priorities for the coming year at all?

3.

Nothings gonna stop us now

It seems that the overwhelming majority of technology businesses managed to find a way to continue operating.

Sure, there’s been Pivots, the New Normal, These unprecedented times, These uncertain times and of course, Flattening the curve.

But amongst all this, there was a will and a way to keep progressing. This reinforces the necessity of being the mother of invention trope but also shows that for the most part, our local technology market has a dogged determination.

Most Australian businesses are conservative by nature, which places a degree of safety around them.

Remote work

Nothing seems to be dividing opinions more than remote work.

We asked: Has the forced remote work of the last few years impacted on your ability to deliver your business objectives?

4.

A return to the office still divides opinions

Staying remote but offering hybrid options in FY’23 remains the preference for most employers. But only just.

There’s no doubt that COVID affected us all in different ways, and time will tell if dictating mandatory days in the office will come back to bite employers.

This makes us wonder if the way that knowledge workers actually do their work has changed forever?

Returning to the office

There have been several high-profile companies demanding a return to the physical office and this has been met with mixed receptions.

We asked: Are you planning on a full or partial mandatory return to the office at all in FY’23.

5.

Tech employers prepare for another turbulent hiring year

With just under half of tech employers going into the new FY with confidence, it’s clear that FY’23 promises to bring more challenges.

Several internal teams stated they had been working on initiatives such as improving how remote working actually happens, pay reviews and parity as well as rethinking the benefits they’re offering. 

Several respondees also stated that having their TA team properly resourced was a key factor in their confidence.

However many also stated that the uncertainty in the market had affected their response.

Business change

We’ve all been forced to rethink what our objectives are and how we meet them.

We asked: Given the robust nature of the market at the moment, do you feel well prepared to meet your hiring targets in the coming FY?

6.

Standards can't drop

With the desire to hit delivery deadlines there seemed to be a huge run on Snr Engineers.

Those engineers that could help build complex things, find practical solutions to some of the biggest problems and also mentor and lead teams were at an absolute premium.

When supply struggles to meet demand, there’s potential for hiring teams to lower their standards for particular roles. This doesn’t seem to be the case for most organisations, however.

This is potentially a sign of hiring maturity, or a refusal to bow to market conditions. Either way, if teams are still finding ways to deliver then that’s all that counts

Expectations of talent

We regularly hear about roles being re-graded or expectations changing.

We asked: Has your company had to rethink what level of skills are acceptable for roles now? (e.g, Do we think of mid-level engineers differently now than pre-pandemic?)

7.

Still waiting

There’s a recruiters horror novel waiting to be written based on the number of offers being rejected, the volume of competing offers, candidates ghosting, ridiculous salary demands and the benefits demands being made.

A novel that would make you never want to read a resume again. The time to fill roles however has been a challenge that many have struggled with.

Undermanned teams can only go on delivering for so long, and hiring managers have been under pressure to get their teams at capacity like never before. That pressure is most likely the driving influence for question 8.

Hiring challenges

The market is throwing up challenges that few of us have experienced before.

We asked: Are your hiring managers’ expectations of the time to hire different now than pre-pandemic?

8.

More than ¾ of the tech market got a pay rise because of COVID

The rush on tech talent allowed those who weren’t actively applying for roles to ask for large pay jumps in order to move.

This then forced companies to try and apply salary parity between current employees and new hires.

As retention challenges started to bite, most companies saw a spike in OPEX as they fought the talent war on two fronts. Retention and attraction.

Supply vs. Demand

The impact of supply and demand hits the budget in multiple ways.

We asked: Have you had to pay your current staff more in order to achieve parity with your recent hires?

9.

Reactive hiring is here to stay for many organisations

Ask most TA teams and they’ll tell you that they have felt underfunded and under-resourced since forever.

They’re constantly juggling the immediate hiring needs of the business and activating initiatives that they know will bring both short & long-term benefits to their companies.

A small majority reported having to pause these types of initiatives. The danger here is that their companies run the risk of getting stuck in the cycle of reactionary recruitment.

Any team will tell you that this is hard to get out of without investment.

Prioritisation challenges

Most Talent teams we speak with had big plans for FY’23.

We asked: Have any of your planned people initiatives (such as D&I) been forced to take a backseat in favour of just getting hires made?

10.

A flag in the sand?

In certain circumstances, employers’ efforts to keep employees have equalled the extent some businesses would go to in order to recruit them.

One respondee commented that “We have completed a talent review and planned measures to retain our top talent” that person also commented that whilst it was a good start, it wasn’t enough organisation-wide.

Other comments suggested that retention was under constant review and that planning was happening but a strategy hadn’t yet been defined.

We’ve seen many employers rapidly move to embrace hybrid working conditions and offer other benefits, however, we’ve seen very few talk about how they work actually differently now and how that’s been benefiting their customers/users and employees.

Retention challenges

Many teams find hiring a huge challenge, but that’s coupled with doubling down on keeping people.

We asked: Does your business have a clear view on how it plans to retain talent in the next FY and has it budgeted for this?

For Employees

Our respondents were software engineers, product managers, UX/UI & product designers, at various levels of seniority. Respondents accessed the survey via our social media channels, email campaigns, and online communities such as Slack and LinkedIn groups.

1.

Your competitors are approaching your staff every week

Nearly half of knowledge workers are approached at least once a week with new employment opportunities.

The sheer volume of roles created in the new wave of digital adoption created by COVID has forced employers to get on the front foot.

With job board application numbers still below pre COVID levels, recruiters have been forced to get more proactive.

Too much choice?

Many candidates we speak with tell us about the sheer number of job opportunities coming their way.

We asked: On average how many times per week have you been approached about a new job over the last year?

2.

95% of applicants research potential employers

As most companies embraced the remote work arrangements that were forced on them, some recognised the potential of a workforce without geographical boundaries, but within the country.

Suddenly workers in Melbourne were being approached by companies in Sydney. Some of which they hadn’t heard of before.

This drove the need to research just what companies were offering and what they were all about.

Check out our research on Employer benefits to appreciate the irony happening here.

Quality vs. Quantity?

How do you decide if they’re good opportunities to consider?

We asked: How much research do you do on a company before applying for or agreeing to talk about a new job?

3.

Social reviews still divide opinions

Of course, candidate research also includes social review sites such as Glassdoor.

With just under half of people saying that they pay attention to and trust these sites, employers are faced with the continued risk of brand damage with less than favourable reviews.

We’d love to understand if there’s some demographics or regions that trust have more or less trust in social reviews. Could this affect how employers view remote work?

Does social proof mean anything anymore?

Is the opinion of others a deciding factor when reviewing companies?

We asked: How much do you trust things like Glassdoor reviews and do they impact your decision-making?

4.

Most of us value flexibility over more money

The rise in employment options imbued many knowledge workers with a sense of control and choice in their careers.

For many, this will be a brand new phenomenon, bringing with it the willingness to test boundaries and the bravery to ask for salary raises that they may not have done pre-COVID.

It would seem that the increased salary demands are not being made by the majority, but when those demands are met the ripple effect is significant.

It also makes us think that buying your way out of trouble may be a strategy that brings more problems than it solves. Addressing culture and values would appear to deliver a more sustainable solution.

Can money really make you happy?

We’ve all heard of pay rates going up for tech roles, and some people getting big bumps in their salary.

We asked: When you’re considering offers, how big of a factor does the salary play for you?

5.

Flexibility is everything

Continuing the theme of the previous question, it’s clear where our preferences lie.

With a massive 73% of respondees stating that they wouldn’t even consider a company that doesn’t offer flexible options, it seems clear what the market demands.

What’s also clear is the growing need for leaders to think deeply about how their workforce does its work rather than how much they’re paid for doing it.

Remote work

Nothing seems to be dividing opinions more than hybrid/remote work.

We asked: How big of a factor is a company’s remote or hybrid work policy when it comes to your decision making?

6.

We understand that with flexibility comes responsibility

There was a time, not so long ago, that flexible working (for the most part) was a luxury that you had to earn.

Prove that you can do the job and prove that you’re responsible and you might get to do a day a week from home.

It’s a narrative that we’d been hearing frequently. COVID of course gave us all the luxury we wanted and the noisy lot on the internet started talking about how they could work anywhere and that the life of the real full-time digital nomad had arrived.

Of course, like a lot of things in the world of work, it’s easy to be really one-eyed about things.

The reality is that some businesses adapt better than others but if knowledge work really is a relationship then both parties need to contribute. It seems that the market agrees with this.

Is remote work right for everyone?

Whilst fully remote work sounds great, does it come with a price and is it worth it?

We asked: 100% remote work options are a hot topic at the moment, but does the benefit of working remotely come with a responsibility for both employer and employee to make it work?

7.

Divided loyalties?

Due to the overwhelming number of job proposals they receive, there is extremely strong anecdotal evidence that some categories of knowledge workers feel commoditised.

The layoff tales, despite the fact that those businesses had previously celebrated their financing rounds, make it clear how this perception of commodity is being amplified.

Rarely are the firms and entrepreneurs that achieve absurd value levels questioned when they execute significant layoffs.

Certain might counter that start-up life™ isn’t for everyone and that this very public appreciation is what initially draws some knowledge workers. In any case, it raises intriguing questions about our relationship with the new world of work.

Has work become commoditised?

Major layoffs still seem to be happening; some people tell us it makes them nervous about moving jobs.

We asked: Does workplace loyalty still exist?

8.

Knowledge workers want challenges and progression

Considering it takes a couple of months to settle into a new company, new job and new team.

This leaves less than 2 years for employers to get real value from their people.

The overarching commentary on this question was about career progression and not stagnating.

So it would seem that the challenge for many organisations may be that they don’t communicate this well enough. Making this information publicly available is a great way to retain and attract the people you need.

How often should you change jobs?

Does loyalty flow both ways? Should you feel guilty about moving for a better opportunity?

We asked: LinkedIn data states that the average job tenure in the tech space is 1.6 years, would you consider moving jobs within 2 years if something interesting presented itself?

9.

Three and I'm out!

Let’s face it, few people actually like interviewing. In our experience, most companies could do a better job at coaching their interviewers.

Most of us learn by osmosis, but it’s definitely part science, part art and 2-3 interviews are considered fair by both parties it seems.

Pair programming, case studies, coding challenges and design jams are all viewed with varying degrees of “this is how we’ve always done it” but in the current market we know that many companies have ditched this in favour of deeper in persin interviews with multiple team members.

What about interviewing?

Having more opportunities sounds brilliant but it invariably comes with more interviews.

We asked: How many interviews do you think are the right amount for both you and a potential employer to get to know each other?

10.

Your teams expect diversity

A subject that’s close to our hearts, diversity is also a prominent factor in decision-making for job seekers.

Moving beyond tokenism seems to remain a challenge for many businesses, however.

That being said, every organisation has to start somewhere. We wonder if there’ll be a day when workplace regulation around diversity outside of EEO is introduced.

If there was ever a wake-up call to business that this is not a fad or a moment in time, maybe this is it. 82% of respondees stated that they wouldn’t consider an employer that didn’t fully embrace diversity.

Diversity and Inclusion, is it important to you?

A lot of businesses talk a good game about diversity, but when evaluating offers and job opportunities, is it something you pay attention to?

We asked: How important is it to you to know that a potential employer values diversity in its teams?

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How the Tech Market Feels FY23

Insights from 5,800 data points that we feel give us real perspective and sharper insight into how the market feels at this point.