The Market has peaked… Now what?

There has been some data released in recent days which confirmed my suspicions that the IT jobs market has moved from completely crazy to merely hectic😊. In other words, the market has peaked, but remains pretty hot.

Ad Numbers

Let’s start by looking at job ad numbers on Seek. They peaked around 260,000 in June and over the past few weeks have moderated to sit between 235,000 to 245,000.

Seek has just published a report showing a 5% drop in ad numbers in one month, whilst the average number of applicants per role increased over 10% from July to August – not insignificant. The decline in ad numbers was fairly uniform across the country with a 4.1% decline in NSW, 4.9% in Victoria, 5.1% in Queensland, and 3.9% in ACT.

Keeping this in perspective, ad numbers are still up 42.5% compared to pre-pandemic level and 15.5% year on year.

However, if we look at IT jobs, the situation is different. The ad numbers peaked in February and June at 18,500 and now sit between 14,000 and 15,500 which is pretty much where it was before the pandemic. That’s around a 20% reduction from the peak compared to 8% for the overall market.

But is this a fair comparison? IT job ad numbers didn’t rise anywhere near as much over the last 18 months as the rest of the market for a number of reasons. Seek tripled ad prices for recruiters shortly after the pandemic began, whilst many of the premier tech employers, such as Canva and Atlassian, no longer advertise on Seek, preferring to advertise on LinkedIn. Candidates seem to want to go where the sexy jobs are, so when Balance advertises on Seek these days we almost never see quality applicants for mid to senior technical roles, so we tend to advertise only management, support, and entry level roles. For Seek, it looks like they are having a Facebook-esque experience with the cool kids heading to other platforms; unsurprisingly its share price is 40% down on 12 months ago.

So what about rates and salaries?

At Balance, we’re seeing very little easing in the supply of technical candidates such as Cyber Engineers, Developers, Systems Engineers, Network Engineers, etc; whilst in positive news, the supply of Project Managers, Business Analysts, and other more functional roles has started to improve a touch. However, prices have risen across the board over the last 6 months. Our latest Salary Snapshot has just been released and highlights the fact that whilst we’ve seen an uptick in supply in some areas, it hasn’t been enough at this stage to affect prices. Candidates are still remarkably bullish, there are still multiple suitors for good candidates and the confidence of candidates and their unwillingness to negotiate remains consistent. We will see if this continues.

Atlassian – Canary in the Coal Mine

It was interesting to see Scott Farquar on ABC’s 7.30 last week. He was spruiking Altassian’s Work from Anywhere program as they try to hire another 1000 staff. I’m guessing your average billionaire isn’t going to waste their time appearing on a current affairs show, spruiking the Atlassian Barbie Bus recruitment tour of Australia unless they believe they have some pretty significant recruitment challenges well into the medium term. And this is the organisation with probably the strongest tech employment brand in the country offering some of the most attractive packages around. So let’s not confuse the peak of the market with any sort of crash.

However, following his appearance, Atlassian announced their results. The market was not impressed and wiped 45% off their value.  Their Chief Financial Officer stated “We will be moderating the rate of planned headcount growth in the second half of financial year 2023,” Binz said. However, he said they stood by their plan to hire another 1000 staff and when I checked LinkedIn – they have 1000 open jobs. I’ll be watching their activities with interest.

LinkedIn has highlighted how big a role the largest employers are playing. Atlassian is by far the largest in the applications space, employing over 2% of all Software Engineers in Australia. In a recent report, LinkedIn highlighted how much talent the big employers have hoovered up over recent times in Software Engineering and Cyber. Atlassian has increased their Software Engineer numbers by 38% in the last year, whilst Canva has increased the same by 48%. In the Cyber space, Deloitte and Cyber CX have increased their numbers by 26% and 25% respectively. Interestingly, median tenure for these roles is now less than 18 months.

                             Software Engineers                                              Cyber Specialists

Top Employers

                             Software Engineers                                              Cyber Specialists

So what now? Will the major employers in Australia continue to drive up prices for the upper echelon of tech talent, taking advantage of any hesitation by the rest of the market as we deal with economic headwinds. Or will these headwinds combine with an influx of skilled immigrants (nope, we’re still not seeing any – call us if you’re out there!!) to balance the market or tip it back in the employers’ favour. I’m tipping the former…..but I do own a recruitment company ….