Longitudinal Study: Tech Worker Pay 2012-2026

Today, we take a trip down Salary Lane.

Balance has been publishing the IT Salary Snapshot for 15 years (current version), and for the first time we take a longitudinal look at the data to answer the question Are tech workers in Australia getting poorer?

Tech roles in Australia have long been seen as well paid — one of the key reasons the sector attracts young talent. There have been bursts where earnings really took off. Y2K and the dot‑com boom at the turn of the century delivered huge pay spikes, and for those with a little less grey hair, the post‑COVID surge brought another wave of runaway rates and salaries.

But over the last few years salaries have seemed  to plateau or even dip. Are we imagining it? Or is the pain real?

About the Snapshot

For  those unfamiliar with Balance’s Salary Snapshot, every 6 months we publish a  range of rates and salaries for around 30 tech jobs. Over the last 15 years  we’ve seen jobs titles come and go; for example, we no longer publish rates  for Phone Developer, DBA, or Test Manager roles. Conversely in 2012, we didn’t publish numbers for  Modern Workplace Engineer, UX roles and Cloud Engineer.

Over time, we’ve had tens of thousands of conversations with candidates about rates and salary expectations across these roles. Since we opened in 2007, we have been making offers, headhunting, interviewing and negotiating allowing us to build a deep, real-time dataset.

This volume of engagement gives us a clear view of where the market sits for each role, which we formally review and recalibrate as a team every six months.

Method

This analysis focuses in on six core tech roles we’ve consistently recruited for since 2012.

• Project Manager
• Business Analyst
• Software Engineer
• Solutions Architect
• Network Engineer
• Cyber Engineer

We’ve converted average salaries and contract rates into indexed series covering both the post-Covid boom years and the full 14 years of data.

To compare relative value over time, we rebased salaries, rates and CPI to a common starting point, firstly 2022 as the base year (index = 100), and then repeated the analysis with 2012 as the base.

Findings

Post Covid: Purchasing Power Calamity

The gap between wages and inflation has widened materially over the past three years. While CPI has increased by 10.3%, permanent salaries and contract rates have decreased, down 4.8% and 5.9% respectively over the same period.

It’s not just perception — you probably are worse off. In nominal terms, recent tech hires are earning around 5% less but in real terms the wage now buys around 15% less.

If you have a mortgage — or more than one — the pressure is significantly higher. Interest rates have shifted from roughly 3.1% in early 2023 to around 6.1% today, materially lifting repayment costs.

We are seeing a sharp and sustained erosion of purchasing power for tech workers in Australia.

 

The hangover from the Covid-era boom.

Post-Covid, demand spiked and pay rates surged to levels that, in hindsight, were unlikely to be sustained. It’s unsurprising that we’re now seeing a correction back toward longer-term trends.

The problem is that behaviour doesn’t unwind as quickly as markets do. Many adjusted their lifestyles to match those peak earnings — upgraded homes, investment properties, private schooling, car leases. These are long-term commitments, not short-term decisions.

While remuneration may have normalised, many  tech workers cost base remains elevated and continues to rise. It’s  unsurprising that this adjustment feels so sharp.

 

Long Term: 2012-2026 – Strong Correlation with CPI

Taking a longer-term view tells a very different story.

If we rebase both salaries and contract rates to an index of 100 in 2012, when we began the Salary Snapshot, the picture shifts materially. Over this period, permanent salaries have grown 5.5% ahead of CPI, while contract rates have tracked slightly behind at around 3.8% below CPI.

In other words, while the short-term picture shows a clear erosion in real earnings, the longer-term trend shows IT remuneration has broadly kept pace with inflation.

 

Permanent Salaries

Whilst both perm and contract rates have decreased over recent years, the most pain has been felt by PMs in permanent roles.  Not only have PM salaries increased by the least over the last 14 years (37.5% vs an average of 43.6%), they have also decreased the most over the last 3 years down a sobering 14%. Meaning a purchasing power decrease of almost 25% in 3 years.

Obviously, if you’ve been in the same role for 3 years, your salary will be the same or will have increased. The data in the table represents where the market is at for new hires. And yes, a nod to you BA’s as well. It’s not quite time for thoughts and prayers but it’s not great.

Conversely, infrastructure workers have done the best over the short, medium and long term. And we predict they’ll continue to perform the best moving forward, as they currently seem the most immune from AI job erosion.

The table below highlights salaries for pivotal years. The full table showing 14 years of permanent salaries and contracting rates can be found here.

 

A Project Services Salary Crisis?

A crisis? Not quite, but certainly the project services sector is under pressure with supply outstripping demand. This suppressed demand is evident across most sectors and has been consistently so for a number of years.

The Balance team recently debated the possible causes of this decrease in demand, with general agreement on a broad range of factors including:

1. the rise of self-managing teams in agile environments
2. technology that’s increasingly simple to implement
3. recent economic head winds meaning CFO’s have less project budget
4. the Covid boom bringing forward much of the tech heavy lifting, leaving a paucity of work in its wake
If any of my readers have thoughts beyond these, we would love to hear them.

 

Contracting Rates – Surprising Data

If you asked the Balance team whether perm or contract had performed better over the last decade or so, we would have backed contracting, the rates often seem quite generous. However, there’s now a 10% gap in growth between the 2 forms of engagement over the long term.

It’s hard to pinpoint a cause when you’re observing an average change of well under 1% per year. The Balance team believe it’s a combination of increasingly effective internal talent teams who fill a greater number of roles with permanent staff – leaving less need to hire contractors, decreasing federal and state governments appetite for contracting, a maturing technology world, and increasingly cost-conscious businesses. Once again, the full data set can be found here.

 

Looking to the future

Despite the neutral long-term trend, it’s unlikely many in the tech sector are feeling particularly positive right now. Confidence, both business and consumer, remain below long‑term averages, with geopolitical uncertainty adding further pressure.

Inflation is still running at 4.0%, and with reports of muted or non‑existent salary increases across parts of the sector, real incomes are likely to continue drifting backwards in the near term.

We’re not yet seeing widespread job losses from AI, but hiring behaviour is shifting. Many organisations are prioritising investment in tools over headcount, which will inevitably weigh on demand for talent.

Taken together, low confidence, global uncertainty, and early signs of structural change from AI, the outlook for the IT jobs market remains subdued.

There are, however, some positives. Forecasts of easing interest rates should help support confidence and relieve cost pressures. If conditions stabilise globally and rates begin to fall, the market could improve quickly. Without that support, however, a subdued market risks becoming a bear market.

For those that are interested – here is the full data set for the 15 years of Salary Snapshots.

If you have any recruitment needs, reach out to Paul Foster at pfoster@balancerecruitment.com.au.