Is the IT jobs market going well? That depends on your perspective.
Drawing a parallel, if you’re looking to rent a house and there are 20 suitable homes and hardly anyone else looking, you’d think it was a great market. If you owned one of those homes, you would think that same market is terrible.
So, if I tell you the IT jobs market is going great, I understand if you think I’m crazy.
As the owner of a recruitment company, I’m not overly happy when there are lots of vacant jobs and no candidates, but most candidates would call that a great market. And when there are few jobs and a large surplus of candidates, employers would think that’s a great market. And for about 5 minutes every 3 or 4 years, when there are a relatively large number of both jobs and candidates, recruiters think it’s a great market. I suspect that 5 minutes is happening now.
At the moment, we’re seeing a solid demand from employers, and after a fairly long flat spot, candidates are still in reasonable supply.
What’s Driving the Uptick?
All the economic indicators are fairly positive in Australia: Inflation is 2.1%, unemployment is 4.3%, consumer confidence has risen consistently over the last 2 years, and we’ve seen 3 recent interest rate decreases with 2 more predicted. The economy is unspectacular but solid and steadily improving.
The relatively positive climate creates a willingness to invest in new initiatives. At Balance, we’ve started to see more tech opportunities across a range of industries over the last few months. Interestingly, we tend to see a lot of contract roles when the market is depressed (as employers don’t want to make long term commitments), and more permanent hiring when things are going well. And we’ve recently seen the biggest number of permanent roles in 2 years.
I suspect that ongoing positive consumer confidence will further increase activity. During tough times candidates hunker down and are grateful for their jobs. As confidence rises, workers become more willing to take risks and start to look for pastures new. The increase in candidate activity does create more competition but also creates more vacancies.
A Positive Outlook
The combination of increased business and candidate confidence points to a positive outlook for the sector in the medium term. However as with the slow and steady approach we’re seeing in the economy, I predict a moderate rise in recruitment activity, not some sort of frenzy. In other words, like in the story of Goldilocks, not too hot, not too cold, just right (possibly😊).
Across the sector, there is considerable variation in the state of the market. In the project, data, QA and product space, there is still a big surplus of talent, so whilst the market continues to improve, things will be tricky for candidates in these areas for some time. Conversely, we’re seeing a more balanced market in the infrastructure, cyber, coding sectors with the possibility of moving towards a very moderate talent shortage over the course of the next 12 months.
As we’re firmly entrenched in a period of uncertainly as usual, I do have to temper all predictions with a *.
*assuming geo-political issues continue to simmer rather than boil.
Why the $100,000 H1-B visa matters to the Australia IT Jobs Market
As part of his America First push, Donald Trump just signed an executive order increasing the cost of the US skilled migrant visa (H1-B) from $US215 to $US100,000.
The US issues 85,000 H1-B visas per year and currently has over 700,000 H1-B visa holders living in USA. The visas are issued for 3 years with an option for a 3-year extension.
Amazon was the top beneficiary of the visa with 10,000 being issued to it last year. If they were to pay $100k per visa, that’s $US1B in visa fees. And around two-thirds of visa holders work in the tech sector.
Assuming there is no change of heart from Trump under pressure from his high-profile tech buddies, I see 3 potential impacts on the Aussie tech sector.
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We’re going to lose people to the US. When Australians move to the US on an employer sponsored visa, it’s not the HB-1 it’s the Australians only E3 visa. There’s no $100k fee, it’s never over-subscribed, it can be transferred between employers and there’s no limit on renewals. So, if US employers want to import tech talent without a high upfront cost, Australians are going to look very attractive. I suspect, however Australian talent may have higher salary expectations than those arriving from Asia which will temper the impact.
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Australia will become increasingly attractive as a tech destination. Several of our customers are US companies that have an onshore tech presence in Australia. Our talent is currently somewhat cheaper than the US. However, if the US experiences a talent shortage and resultant wage inflation, I expect to see increased interest in local operations as the gap between the cost and availability of talent in the two markets continues to grow. Additionally, the economic and legislative stability of Australia is becoming an increasingly important differentiator.
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Australia will attract a higher quality of immigrant. Whilst we rightly regard ourselves amongst the world’s best places to live, but for ambitious tech workers nothing beats the USA – the biggest tech brands, cutting edge R&D, Silicon Valley – even with the rise of China, it’s still the epicentre of world tech. And because of this, the US has rightly attracted the best and brightest around the world. Assuming that door is largely shut, I’m fairly excited about the calibre of inbound talent we’re going to see. We might also see an increase in the quality of foreign students as this change appears to affect foreign university students whose main pathway to a Green Card is via an H1-B visa. I suspect some tech students will look for alternatives to US Universities knowing there will eventually be a $100,000 albatross hanging around their necks.
I don’t for a moment think this is a game changer for the Aussie market, but I think it will provide a net boost to a market already headed in the right direction.
As always, I’m keen to hear your thoughts….