“The market is so hot right now, I’m expecting a $30k increase,” most candidates said in 2021.
“We just don’t have the budget to keep you on,” is what they could be hearing in 2022.
In the IT field, 2021 was the year of the rise. Business confidence was booming and employers were actively seeking out talent. We saw a lot of people either moving jobs for a higher salary or accepting a counteroffer from their employer.
The question for 2022 is will this trend continue?
Will businesses keep recruiting staff using the offer of a large salary increase?
We do not believe the rapid increases in salaries will continue this year as it is not sustainable for businesses long term and New Zealand is entering a period of low business confidence.
What happened with IT industry salaries last year?
When you’ve been in the recruitment industry for almost 20 years, you have a very sound understanding of what employers and candidates think and what they do.
Information starts to spread among the professional network; whispers of “if you move jobs, you’ll get $XYZ” or “I know a developer that is now receiving $XYZ, I’m a developer, I should be getting that amount or more!”
Employees build up an expectation of what they should be paid, irrespective of what they are worth and what businesses can afford to pay them. Employees are motivated to seek out employment at a higher rate of pay, creating a false employment market with above-market salaries.
These changes are false and short-lived, companies must see a return on investment to remain profitable. As they realise the full impact of the higher costs they may look at restructuring those candidates who have entered their role on an inflated salary unless they’ve shown their worth in their role.
Some larger companies can restructure every 6 months.
While we agree with the sentiment “the market is hot right now”, what goes up, must come down. The following is an overview of how the IT employment industry looks for 2022.
IT industry salary and employment advice for employers
- Look for those candidates with great potential for growth and development. A candidate with great future worth who is passionate about growing in their career is far more valuable than one with a great title and will have far more reasonable salary expectations. They will do wonders for your business and work with you to make money.
- Hire the right person and pay them their worth, a bad candidate will cost you far more than fairly paying a good one.
- Where possible, especially for start-up companies, look at hiring junior to intermediate candidates who are eager to get their foot in your door and grow their careers. Avoid employees who are only interested in salaries. Listen carefully to the questions they ask in the interview process.
- Ensure you have a good team culture to attract the best talent. Prioritise employee happiness and wellbeing, offer flexibility and career progression. Strive to position yourself as an employer of choice who attracts people for the right reasons.
- Hire people based on your team culture, if they fit your culture there will be great work ethic, great energy in your business, and therefore excellent productivity because your employees want to be there, they want to do a great job.
- Put time and effort into designing your interview process. Make the candidate comfortable, build trust and rapport. Carefully select your interview panel, ask the right questions to get the required answers, and be forthright and prompt with interview feedback. Remember, not only is it your first impression of the candidate, it is their first impression of you.
- Think carefully if you want to hire contractors or permanent employees and weigh up the real costs of both options. Contractors need consistent work, and good contractors will find it. You may well end up regretting letting one go. If your business has an ongoing staffing need, it may be worth holding off on filling a role until you find the right permanent person.
Hire the right people, and spend money where it matters. Good people equals an even better outcome.
IT industry salary and employment advice for candidates
- With the cost of living, the stock market, interest rates and inflation, we will start to see a lot of businesses being conservative in 2022. Ask yourself;
- how much do you believe your skill set is worth?
- what makes you valuable?
- if you are asking for more than your worth, your employer will soon figure it out
- Focus on what you want to achieve over the next 5-10 years of your career. Lay it out on a board, make a timeline, and do some research on how you’re going to get there. What company will invest in your growth?
- Pick a company to work for that can fulfill your mid to long-term career goals, a company that will help you learn, grow and progress up the ladder, with pay increases along the way.
- Aim to work for a company with a great culture that values its staff and offers both tangible and intangible benefits, such as flexible working arrangements, training opportunities and room for growth. This is a company you want to align with for the long term.
Counteroffers: If you receive a counteroffer from your current employer, make sure you remember your “why”
- why did you look elsewhere in the first place?
- what was it that made you open to exploring new opportunities?
- what was it that attracted you to the other role?
- why were you thinking to leave?
- will that change
What will happen to the IT industry labour market in 2022?
With the border opening up, there is a very real possibility of changes to the labour market. The only thing stopping many people from moving to New Zealand right now is the immigration process.
Companies need to be prepared for this and apply/ reapply for accreditation to employ an immigrant.
It is also true that there will be people leaving New Zealand, mostly career climbers with no family in New Zealand. There were many people who came home to New Zealand when COVID hit, but now will be returning to where they were previously living.
However, New Zealand is a great place to be right now, especially with all that is happening in the world and a great place to raise a family which is a huge motivator for people around the globe.
We have many overseas candidates registering with us and applying for jobs who are wanting to relocate here. With our offshore model and many companies now considering this way of hiring it’s definitely a growing market.
Hiring people from offshore means hiring people with a great skill set, at a reasonable market rate. This will have a big impact on those who are switching between jobs and chasing ever-increasing salaries.
Watch this space!
Are market salary guides helpful?
Have you ever seen a market and salary guide that lists all the non-financial perks you offer your employees? Or the supportive, team culture you have?
Or, if you’re an employee, one that lists the projects you’ve completed, the challenges you’ve overcome, the years of experience you’ve gained and the teams you’ve led?
There are many things to take into consideration with regard to salary expectations, we do not recommend turning to salary guides for your IT salary advice.
We have a team of professionals with years of experience, with inside knowledge of market rates for different roles and positions that can give excellent salary and employment advice for the IT industry.
We can offer you the benefit of our knowledge and experience and help you to find the right candidate for your business. We can also help guide you with IT salary advice, such as how much your advertised role is worth and any additional factors to consider when designing an attractive remuneration package.
Call us today and let us help you with your recruitment needs.