Tech salaries increase as skills shortage inflates expectations
More technology professionals will receive a pay rise this coming financial year than last, with skills shortages creating a once-in-a-career market, according to recruiting firm Hays Technology.
The FY22-23 Hays Salary Guide found 85% of technology employers will increase salaries in their next review, up from 65% last year.
Of these, 34% intend to raise salaries by over 35, while 51% will increase salaries by less than 3%.
According to Hays Technology, 76% of employers say the skills shortage has forced them to offer higher salaries than otherwise planned.
Professionals say they deserve more
For their part, 87% of the technology professionals Hays also spoke to say their performance and the demand for their skills merits an increase greater than 3%.
Almost two-thirds (65%) say the skills shortage has made them more confident to ask for a pay rise and 63% have already benefited from the skills shortage through a salary increase, new job or both.
Despite this, only 37% are satisfied with their current salary. Meanwhile, an uncompetitive salary is the top factor motivating 51% of job searches. It ranks ahead of a lack of promotional opportunities and a lack of new challenges.
Skills shortage impacts salaries
"Intense competition for skilled professionals will translate into salary increases this coming financial year," says Robert Beckley, regional director of Hays Technology.
Moving away from the salary stability stance of recent years, employers say the skills shortage is the reason increases are higher than planned. Already, 95% are experiencing a skills shortage. Ninety per cent say it will impact the effective operation or growth plans of their organisation.
This is fuelling a once-in-a-career market. Previously camouflaged by skilled migration, and further impacted by headcount growth, skills shortages have reached a level unmatched in our years in recruitment and sparked deliberate salary increases from employers.
However, while both the value and extent of salary increases is rising, employees expectations are growing faster. In a job-rich, candidate-poor market, they feel more assured of their worth and have prioritised a pay rise.
In such a market, the number one question were asked by employers is how to stand out as their preferred candidates first choice.
Hays' answer is a new equation for employers to follow.
"We suggest that today's skills shortage presents an opportunity to define a new equation in the world of work," says Beckley.
"Salary increase budgets only extend so far, so consider the full value exchange for each role," he says.
"Along with salary, consider benefits, upskilling, career progression, purpose, and the relationship employers have with their employees."
In other key findings, the Hays Salary Guide found:
The top five technology skills in demand:
- Business Analysts
- Cloud Engineers
- Full Stack Developers
- Cyber Security Analysts
- Data Analysts
Benefits increase to attract candidates: 20% of technology employers have improved benefits and working practices to entice more staff. The top three benefits sought by technology professionals are training (either internal or external), over 20 days' annual leave and ongoing learning & development.
Hiring intentions rise: 60% of technology employers intend to increase permanent staff levels in FY22/23. Forty eight per cent will increase their use of temporary and contract staff.