UK companies maintain spending on tech salaries as other costs slashed
Employers in sectors ranging from education to finance are fighting to recruit the best technology experts, even as they cut back other parts of their operations, says a new report from hackajob.
The competition for talent is so strong that salaries in technology are continuing to climb, with starting pay for software engineers 64% above the national average. The battle for the best people also meant 46% of candidates turned down offers because they had already accepted other roles, according to hackajob, which hosts more than 250k candidates on its platform.
The report is hackajob’s first annual Marketplace Monitor - an in-depth analysis of thousands of jobs based in the UK (including global remote hires) to understand technical talent, and the accompanying hiring trends, over the past 12 months.
As one of the most recognised and thriving technology hubs in the world, the UK has seen a strong increase in the number of tech roles being created across sectors. For example, the number of people working in computer programming has doubled from 209,000 to 418,000 in the last decade and demand for developers is at an all-time high.
But while the market is buoyant it remains worryingly short of talent, pointing to the need for a massive expansion in education, training and job progression to develop technology skills for the future.
And those who already have the skills are being selective in the roles they choose. Start-ups, for example, are finding it increasingly difficult to recruit staff as candidates, particularly females, opt for the security of more established enterprise-level companies.
Mark Chaffey, CEO and co-founder of hackajob, said: “As the demand for technical talent continues to rise, not enough is being done to create the talent of tomorrow. Every company is now a technology company – whether that’s a retailer looking to sharpen its online offering, a bank boosting security in its back office or a football team pursuing better performance data. If the UK is going to compete it needs to help people get the training they need to join the continuing tech revolution.”
The experience of Covid-19 has shown the possibilities of flexible working and engineers are increasingly looking to operate remotely. London is still dominant, but falling out of favour as recruiters look beyond the capital to Manchester, Bristol, Birmingham and Leeds to secure the best talent.
hackajob, which uses AI to match candidates with companies based on their skillset and nothing more, is focused on diversity and inclusion in the tech sector. The report discovered that UK tech organisations are doing more than ever before to hire more diversely, including searching further afield for female tech talent. India was the only country to appear as one of the top current locations for female tech talent, while male tech talent was overwhelmingly hired solely in the UK.
However, whilst wages are rising at a pace across the sector, women are still asking for less money than men (£57,000 is the top desired salary for women compared to £65,000 for men). The disparity demonstrates a persistent gender pay and status divide even as many employers make efforts to recruit more women to their teams.
Chaffey said: “We know that the world of tech shapeshifts at an exponential rate but some things are clear: there is still work to be done to support the expansion of talent in order to create a truly diverse and inclusive workforce. The next 12 months will be vital in addressing the gender pay gap with dedicated strategies needed to achieve this. Encouraging more companies to hire regional talent, as opposed to hyperfocusing hiring in London, and offering clear progression plans is needed to continue to attract more diverse tech talent.”
Salary expectations are also higher than ever in tech. Whilst in the UK the average median pay for 2021 was £25,971, the tech boom has not slowed down. On average, starting salaries are at least two-thirds higher than the national average and for more experienced tech workers six figure salaries are commonplace, with bonuses and shares on top.
Chaffey said: “Salary has always been a big topic of discussion when it comes to tech jobs especially as the demand for talent continues to soar whilst the supply struggles to catch up. We’ve seen this over in the US where the average tech salary is a staggering 120% higher than the UK. The report shows that 16% of candidates have declined a role as it didn’t meet their salary expectations. If they think a prospective company is being tight-fisted, they may begin to imagine what else the company could be ungenerous with.
“If our data is anything to go by, then companies have two options: salary offerings need to reflect the rising costs of living in order to attract the very best technical talent or they will need to reset their strategy and explore new geographies to attract talent. Progression packages, location flexibility, plus meaningful perks and benefits are more important than ever. Think private health, dental care, topped up pensions and more annual leave are the popular benefits demands of today - the office ping pong table and beer tap just doesn’t cut it.
“But it’s not just the package on offer - the duration of negotiation time is critical. Companies need to move fast to pin down talent in this competitive landscape. The average time to hire using our platform is 21 days, and often happens quicker than this. If you find great talent, make an offer and work hard to secure them - and quickly.”
