The Talent Landscape: Technologists

Today, asking “Are you struggling to find brilliant technologists” is like asking “is water wet?” Every business needs them, and ongoing skills shortages and high demand mean they are increasingly hard to find and even harder to retain within your business.

For People Leaders, this means a constant headache trying to bring high performing digital talent into their business, train them up with the assumption they will leave in search of the next big project or programme.

So, we conducted research into the current demand landscape for technologists to help People Leaders understand where tech talent is, and what they want from a career within Technology.

Here's what we found.

There is an ongoing chronic skills shortage for technologists

The demand for technologists has steadily risen for the last 15 years, with a sharp rise in the past three. This is coupled with a digital skills shortage, starting at education level.

Whilst we have seen encouraging numbers studying Tech and Computing at University (including 30% more females leaving university with a Technology degree), the Learning & Work Institute says the number of young people taking IT subjects at GCSE has dropped 40% since 2015.

This widening gap between demand and supply pushes salaries higher, but there are signs that this might be slowing down as we see candidates price themselves out of a highly competitive market.

However, there are still very distinct nuances across this sector and the talent within it. The top programmes most sought after within the Tech Industry continue to be Java, Software, and Application, and these tend to command (and we suspect will continue to command) the higher salaries.

Despite growth in other sectors stagnating at 1.5%, the UK government predicts that the Tech Industry in the UK is set to buck this trend in 2024 and grow by 4.5%.

The pandemic didn’t slow demand

The pandemic barely slowed the founding of and investment in startups and scaleups, outshining even the most optimistic predictions.

By the end of 2020, there were 7,474 visible scaleups. It marks a 37% jump year on year, with 250 more listed on the London Stock Exchange’s Alternative Investment Market (AIM) than the same time the year before. Excluding the future fund, there were 1,957 equity investments worth £9.8b made to startups and scaleups in 2020 in the UK.

Candidates expect more

Whether it’s the legendary Google campus, innovative benefits, or the early adoption of flexible working across most of the tech world, the industry has been one of the leaders in candidate and employee experience.

As expected, females and males continue look for high future earnings or competitive base salaries (particularly males), and individuals are also looking for professional training and development.

Women are more likely to be attracted to seek out secure employment and work life balance and flexible work , compares to men who are more likely to list and value competitive base salary and good references for a future career as their top priority.

Universum Q4 2023

Secure employment as a priority has risen across the board post-pandemic and amidst the cost of living crisis and grumblings of recessions, as has innovation. There has been a move away from the big organisations that traditionally recruit large numbers in favour of working for smaller start-ups in agile teams alongside varying levels of peers on complex challenges and an ever-increasing desire for flexible working.

This has opened up the Technology sector for those companies that are not pure-play technology specialists who can flex and tailor their approaches accordingly.

The salary landscape

There has been continuous upward momentum in both the demand and the salaries for tech talent, with over 77% of organisations saying they are still struggling to recruit skilled talent. This has no doubt led to the well-documented rising salaries we saw across 2021–2022.

Salaries for Tech roles did take a dip at the beginning of 2021, but bounced right back to above 2020 figures.

The average salary across all Tech roles has risen from 2020 by 4.6% to £57,500, slightly above the average pay increase expected across the board in the UK in 2024 at 4.4%.

When you compare this to other qualified industry specialists such as Finance Director/Controllers the average salary is £45,589, and for Marketing Managers it is £35,180 (only an annual increase of 1.1%).

The upper quartile of salaries still sits within the London region at £92,500, and the lowest is in the East Midlands at £67,500. With increased flexibility around where you work within the sector, it is predicted there will be 1.8 million people within the Tech industry in the UK in 2024.

However, only 260,000 of these will be based in London as organisations transition away from being coerced into competitive salary wars.

And, as you’d expect, truly top talent is even more expensive—the 10% are currently looking at salaries over £100k due to continued, steeply rising demand.

In fact, the number of advertised roles for software engineers has almost doubled since this time last year, and currently, over 6% of all perm jobs advertised in the UK are for someone with ‘development skills', with over 8,000 Tech roles being live at any one time.

It will also be interesting to see how this pans out in 2024, as we have seen a reduction in students enrolling in Tech and Computing degrees in direct response to the large number of redundancies the industry saw as a whole last year and the salaries have started to flatten out.

How does this differ across industries?

When you start to break this down into public vs private organisations, data is limited but you can start to see that an IT Director inhouse within a Private Sector organisation can expect to earn on average £96,000 whilst within the Public Sector this would likely be around £83,000 – a pay disparity of 14%

Source: Data taken over 4 years 2020-2023 from Glassdoor, Reed Salary Surveys an horsefly and based on organisations with under 1000 employees.

How does this compare to other corporate services roles?

When comparing corporate service roles across HR, Marketing and IT, both IT and Marketing have seen a slowdown in salary growth over the past 2 years, with a forecasted possible stagnation or even decline in 2024.

HR saw a 6% increase in average salaries from 2020 to 2021, coinciding with the pandemic when demand was incredibly high for HR services. This slowed down post-pandemic, and IT and Marketing saw a steady 5 and 6% YoY increase, respectively.

HR has seen a larger mean salary growth year on year than Technology or Marketing. With both Technology and Marketing forecasting a stagnation in salary growth for 2024 following a slight dip in 2023.

What does the future hold?

Looking forward to 2024, Gen Z will enter the workforce with a unique set of priorities and values that are and will continue to shape the future world of work. ​

For the first time, we will have five generations within the workplace, and communication and skillsets will be varied and expansive.

Traditional hierarchies and 9-5 schedules feel outdated to them, and ‘63% of candidates rated ‘four-day work week’ as the top future work offering that would attract them to a job. An increased awareness of the cost of living (and working) crisis, flexibility, inclusivity, and ESG considerations mean they are searching for job security and an increased sense of understanding, fulfillment, and opportunity to learn and push technological boundaries.

The average time in role across technology has increased from just 12 months to 18 months as talent increasingly looks to build careers - not just roles.