Every employer is competing to hire tech workers. They’re like gold dust, a rare commodity which drives the new world we find ourselves in. We can argue that as we’re entering the fourth industrial revolution of digitalisation, the demand for workers in the digital sector is growing rapidly. As with any economical circumstance – when supply is low, and demand is high, the price of said commodity is boosted. So, what are the roots to the cause of lack of supply? Is this the only reason why IT salaries are rising?
How much are IT salaries increasing by?
The average tech salary is up to 50% higher than the average for all vacancies in the UK, and is increasing, whilst the average salary for all jobs in the UK decreased in 2021 – reminding us that the IT salaries are rocketing above the rest. Obviously, this is a great thing for workers in the tech industry. Of the top 20 salary increases in the UK, 15 of these were job roles active in the technology sector:
1. Security Architect
2. Senior Marketing Executive
3. Penetration Tester
4. Cyber Security Engineer
5. Cyber Security Manager
6. Data Architect
7. Production Shift Manager
8. Cryptographer
9. Cyber Security Analyst
10. Project Controls Manager
11. Senior Developer
12. DevOps Engineer
13. Cryptanalyst
14. UI/UX Developer
15. Cost Estimator
16. Junior Front End Developer
17. Data Analyst
18. Logistics Coordinator
19. Data Engineer
20. Chief Information Security Office
Security Architects saw an increase of 16.4%, while Penetration Testers saw an above-average rise of 10.6%, along with Cyber Security Roles all receiving increases above 8%. The tech industry is excelling! But why?
Why are IT salaries rising?
The most obvious answer is due to skill shortages – with over 70% of tech employers experiencing skill shortages. These shortages appeared most prominent in Yorkshire (73%), London (62%) and the North (55%). With cybersecurity, BI & Data Management and Software Development being the highest demanded roles suffering with a staff shortage. A staff shortage then pushes hiring managers into a corner, where they will naturally increase IT salaries to attract anyone! If skill shortages are a reason for salary rises, we can then dive in further as to why we are experiencing this decline in skilled workers:
- Fourth Industrial Revolution – as mentioned earlier, this is the next stage in the UK’s human development. For those that don’t know, this is the new digital era where we are using existing technologies and fusing this to advance in AI, robotics, the Internet of Things, genetic engineering, quantum computing and more. While it’s great that we’re excelling in technological innovation, this growth is increasing at an exponential rate. Great… right? Well, this actually means that technology professionals are having to continuously upskill in order to keep up with the speed of which technology is advancing, thus, causing a skills shortage – as not all tech gurus can keep up to date!
- A fall in the number of IT students – it can be argued that students just aren’t interested in becoming qualified in tech, where the number of GCSE students taking IT subjects fell by 40% in 2015, declining alongside A levels, apprenticeships and further education courses.
- Brexit – yes, it feels like a lifetime since we parted ways with the European Union. The UK’s exit from the EU has changed the way which many companies handle and process personal data, causing non-tech organisations to increase their hiring for tech roles – decreasing the candidate pool of tech workers in the UK. Additionally, the need for sponsor licenses when hiring from outside the UK can make it harder for employers to source non-UK tech workers – further burdening these hiring managers suffering from a skills shortage. This also ties into the number of EU workers wanting to work in the UK, with EU citizens seeking work in the UK falling by 36% since Brexit.
- COVID-19 – step aside Brexit, COVID’s here. While we were already experiencing a skills gap in the tech sector, it seemed to have been worsened by the pandemic. One argument for how COVID affected the tech skills shortage is due to the younger generation suffering from not being able to get the sufficient training and support required to advance in their career through appropriately learning new skills.
- High Competition – naturally, as the technology sector grows rapidly, more businesses are looking to enter the industry – creating an unrivalled level of competition in this sector. 27% of hiring managers admit that the most skilled candidates they source regularly receive multiple job offers. This causes businesses to increase their IT salaries in an attempt to seem more appealing to the competition, where this is reinforced with 34% of candidates having high salary expectations.
Now, looking at other potential causes for salary rises, we have a statement from Rekkruut’s Cofounder and Head of Software Development, James Hayes, saying, “start-ups appear to be having an impact on salaries within our industry, where these organisations are receiving large investments, which then somewhat allows them to then use this funding to offer a higher pay rate to tech workers.”
This idea that new, start-up businesses affect salaries within the IT industry can also be supported through the fact that start-ups are in competition with one another to access the market as fast as possible, and do so with extreme funding from investors
These reasons can be categorised as the main points as to why we’re experiencing a rise in IT salaries, generating a skills gap which simultaneously creates a decrease in the number of available workers in the industry. This then naturally forces employers to increase IT salaries in order to make the sector appear more satisfactory for any new potential employees. While we suffer a skills shortage, it also appears the increase in funded start-ups has caused IT salaries to rise.
How can we resolve skills shortages?
First of all, the tech industry needs to show more awareness for early career professionals and young people about careers in tech. While it may be a good idea to invest in the younger generation, we also need to focus on the current generation of IT professionals. Tech employers must train the existing employees and continuously work on upskilling them to remain qualified during the progressive rate of growth of the fourth industrial revolution.
Employers also need to improve the hiring process overall, whether this is to speed it up entirely, or find new methods which get the highest quality of candidates. 36% of hiring managers believe the recruitment process takes too long. With this in mind, we can establish the need for a faster alternative to recruitment – where HR managers aren’t suffering with having to wait too long to fill the vacancies they so desperately need to fill! That’s where Rekkruut comes in…
How will Rekkruut help?
Rekkruut is hungrier than ever to help tech employers tackle the skills shortage problem, with our mission statement being inspired by helping these managers resolve the issue of not having enough staff. Our goal is to not only provide a cheaper alternative to hiring managers, but we’re wanting to make it much easier and more efficient for them.
Currently, our design and development team are working hard on building the app (which is anticipated to be released in early 2023). In the meantime, we are hoping to summarise our overall plan for what Rekkruut will be offering once it is released as the first recruitment app working in the sharing economy…
Our platform will operate similarly to an agency; however, all activities are completed via our app – where we encourage all users to interview, meet and connect virtually. This is completed through instant messaging, video calls and profile-building.
In a nutshell, we’re wanting to eliminate any and all inefficiencies. Whether this is travelling to and from meetings or interviews, or by saving you time by avoiding face-to-face meets with an agency recruiter during your busy schedule. We believe that instant messaging is a faster process than having to email or call into a busy office. This increased efficiency can enable hiring managers to overcome the skills shortage, where we can effectively speed up the whole recruitment process – mitigating the negative effects of recruitment taking a long time to fill certain vacancies within the organisation due to the limited number of candidates available.
Our “Rekkruuters” are freelancing, experienced and trained recruitment consultants who will be working hard on building their own business through our platform – where we provide them with the tools to become their own boss.
To help assist with the skills shortage, our Rekkruuters will be doing all day-to-day recruitment for organisations working in the technology and/or construction industries. This means that hiring managers can have an increased pool of candidates to choose from when another recruiter is helping them with their employee search. These candidates will be selected, interviewed and vetted through our platform by our Rekkruuters. We provide hiring managers with the freedom to focus more on other tasks, and leave the recruitment side of things entirely to our Rekkruuters.
Not only do we eliminate inefficiencies and provide an easier recruitment alternative, but our services are the cheapest in the recruitment industry. We’re looking at implementing a fixed 15% charge rate on top of the candidate’s pay rate (below recruitment agency average across the industry) where we only charge the client upon hiring a candidate through our platform. The app will be entirely free to download and use by all users.
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