Reflecting on 2022, it was a fast-paced and exhilarating time in IT recruitment circles. Everyone wanted people. We’d emerged from the COVID torpor with a newfound appetite for investing in IT. It was a big winner out of the pandemic – businesses were so reliant on their IT systems during the wave of lockdowns, and post-lockdowns, everyone continued to largely WFH and transact online. The upshot in demand for quality IT people was stratospheric, with the demand resulting in stronger candidate expectations, wage demands, ability to work remotely, scope of role, quality of tech stack, and speed of decision-making.
Come 2023, some upward pressure on interest rates, less economic certainty, and a few high-profile layoffs, it seemed like 2023 might prove a great deal calmer than 2022. Five months into 2023 though, it’s fair to say those initial ripples felt in the global IT market haven’t turned into a tidal wave locally. The brunt of layoffs in the Australian tech companies was primarily felt by research, design & talent acquisition teams. Very few IT people were let go.
There were a few local businesses that did fold or have major restructures. In total though there were only a few hundred IT people that were let go. A number that was quickly soaked up by a local market that has been starved of talent for 18 months+.
This is underlined by the unemployment rate: 3.7%. It appears the market has gotten less fluid. Candidates have also felt the shift in the economy as a whole; there’s less appetite to move than there was in 2022.
So, What Does the Outlook Suggest?
The recently released Tech Outlook from The Tech Council of Australia (the peak industry body for Australia’s tech sector) makes for interesting reading. Here are a few key findings:
- Rapid Growth: Over the last 27 years, growth in the number of IT jobs has been 4 times faster than the growth of non-IT jobs (in spite of the GFC and dot.com crash).
- Expanding Workforce: There are some 935,000 people working in the Tech Sector. That is expected to grow to 1.2 million by 2030.
- Software Engineers on the Rise: There are now more software engineers in Australia than plumbers, hairdressers, or baristas.
- National Tech Growth: Tech growth is national, not just in Sydney and Melbourne.
However, there's a glaring challenge on the horizon: Australia needs 600,000 more people to join the tech sector by 2030. This is a significant shortfall considering that the current market comprises only 935,000 tech professionals.
According to Universities Australia, Australia produces around 330,000 university graduates every year, and approximately 7% of them study IT, amounting to roughly 23,000 IT graduates per year, or around 160,000 over the rest of the decade. This still leaves us short of 600,000 IT candidates.
Skilled migration needs to be part of the puzzle as well, but at a time when housing is in chronically short supply, that’s a significant challenge. There are also risks associated with cultural challenges that may pose difficulties.
In conclusion, while 2022 was a booming year for IT recruitment, 2023 is showing signs of moderation. However, the long-term outlook for the IT recruitment market remains robust, with the tech sector poised for continued growth. To meet the increasing demand for IT talent, innovative strategies, including upskilling and attracting candidates from diverse sources, will be essential in the years to come.
