As I write this (January 2022) it’s mid-summer, the kids are heading back to school next week and it seems everyone has COVID. Despite this we’re already very busy with both existing and new customers contacting us with hiring needs, which suggests another busy year ahead. Something that’s going to be exciting for job seekers and challenging for employers looking to hire staff.
Firstly, the big picture. 2021 was an exceptionally intense year, certainly a year where the best candidates were in the driving seat, the lack of talent available collided with an increase in demand, making it challenging for employers to hire the people they needed. We see no change to this moving into 2022, its still a tight employment marketplace.
Here are some of the key things to look out for in 2022.
Supply vs Demand – COVID and the International Borders
The key driver of low talent availability over the past 12 months has undoubtedly been the closure of our international borders and the lack of immigration. For the 12 months period to June 2020 Australia gained 194,000 net migrants (source, Australian Bureau of Statistics) and many of these entered with skills in the Technology sector. The pandemic closed Australia’s boarders and stopped this flow, and to add to this many international residents returned home and were unable to re-enter Australia. We’ve talked to dozens of candidates keen to come to Australia but are currently unable to however This is changing in 2022, the borders have reopened and as international flights are slowly returning to normal there will be a strong increase in international migrants returning to Australia. We expect this to start to ease pressure on talent by the middle of 2022.
Flexibility – Working from home and hybrid working models
Lots of people have got used to working from home, particularly in the Technology sector. Many employers are embracing this, however not all. We are already fielding questions from candidates who are looking for a new role as their employers are preparing to make them return to the office fulltime. The reality of 2022 is candidates expect flexibility. Employers that refuse to accept this reality will struggle to attract and retain the best people.
Salaries / Rates – Are you paying enough to keep your people?
Wage pressure is a constant with a 20-25% increase on salary demands compared to pre COVID. This has caused much angst for employers who have to navigate pay parity. For example, long term employees doing the same work as new team members, but paid 20% less, is causing frictions within organisations. Smart employers are re-evaluating key employees; if you don’t want them to leave make sure they are getting paid what the market says they are worth.
Employment models
The three major models for hiring staff are as contractors, as permanent staff or as fixed term contractors. These are the trends we are seeing for each:
- Contractors – We are seeing a big increase in the amount of companies offering 12m+ contracts. Contractors like stability and this is hugely appealing to them. Many contractors will be more flexible on a rate for a longer-term engagement and in truth many contracts go on for longer than the standard ‘six months’ regularly offered. Remember that both the employer & the contractor have a notice period option should it not be right for either party.
- Permanent Hiring – There is strong demand for fulltime staff and we are filling a lot of these roles, however supply and demand means speed is important. Where a typical recruitment process would have happily taken 4 weeks or more pre-covid, today, smart employers are cutting their process down to 1 week or less. This is the key to hiring the best talent.
- Fixed Term Contracts – These are still on offer however most candidates aren’t interested in them in this market. If you are being approached for multiple roles the ‘fixed term’ role is typically not very appealing to candidates; it doesn’t offer the stability of a permanent role or the extra money of a contracting role. We would suggest that in 2022, fixed term roles should be avoided.
I’ve also spoken to our MD’s from all of our offices to get their take on issues city by city, this is what they have said:
Mike Roddy – MD – Queensland
“We have been noticing a strong level of interest from candidates wishing to relocate from southern states to Queensland. The principal reason, that the impact of COVID is perceived to be less severe plus a lifestyle more conducive to their aspirations. The boom in house prices in the Southern States is attracting young families to seek a better work life balance and to buy a home they can actually afford the repayments on. With the Olympics just 10 years away, there is a level of aspiration and planning amongst government and the business community for growth and investment.
One of the key challenges and a vital measure of success is retention. The volume of counter offers, and head hunting is at an all-time high. Existing employers are waving cash to retain hard to find talent and secure new team members with the skills and knowledge appropriate for further business prosperity.
With the risk of being contradictory, many candidates are reserving their decision to change careers as a result of the uncertain COVID climate we are all operating under. This in turn, jeopardises project delivery adding to some of the challenges businesses are facing.
Demand for skills in cyber security, data analytics, infrastructure, front- and back-end developers, are keenly sort. The preferred model of employment currently is more permanent based as opposed to contractor based. This is not atypical, however understandable in light of the available talent in the marketplace.
Irrespective of the challenges, there is still opportunity across the whole IT sector and with a well considered application and the right recruitment partner, there are exciting and job fulfilling possibilities for all.”
Joanne Maggs – MD – New South Wales
“I would echo Mikes comments on Queensland, all those issues are current in NSW.
NSW IT market recovered extremely well after the initial NSW shut-down, where we have seen continued momentum of a job rich market.
There is a very high demand for skilled technology workers with significant salaries and contract rate increases & some exceptional requests. Job creation in NSW is continuing to accelerate, based around innovation in technology (both in the private and government sector) and key priorities of growth. Key areas of demand include engineering (developers), data, cloud native platforms, cyber security and automation. Many enterprise organisations are focusing on changing their business models to achieve a higher levels of customer and employee satisfaction.
Although we are still amongst a pandemic there is an air of optimism and with the continued demand of IT professionals the outlook of 2022 will remain similar to 2021.”
Steve Scanlan – Director – Victoria
“After reading the comments from Jo and Mike around Queensland and NSW I can agree that we are seeing the same here in Victoria. Unfortunately Victoria has been the hardest hit over the past 24 months with lockdowns, restrictions and working from home.
Demand in Victoria is the strongest we have seen it in many years, however many of our customers in Victoria have adapted exceptionally well to the ‘new normal’ around remote working and working from home strategies. Many of the customers we are working with are open to hiring the right people anywhere in Australia for the right roles. WFH is certainly the approach we are seeing here.
That being said the city here is starting to recover quickly with trams & trains re-filling with commuters again and we expect 2022 to be the year that the CBD comes back to life. Key skills in demand are around digital & cloud skills with a strong focus on Digital Development skills.”
Richard Talbot is Technology People’s Director, based in their Sydney office. He is always open for discussions and suggestions for recruitment topics to muse over.
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Richard Talbot Owner / Director | Technology People E: rich@technologypeople.com.au |