Despite mass layoffs in the tech sector, skills shortages remain rife, with companies being forced to shell out higher-than-average pay to help fill their vacancies.
That is according to new figures released in the Jobs Confidence Index from recruitment firm Robert Half, created in association with the Centre for Economics & Business Research.
It reveals that, while vacancies have dropped in light of redundancies across the sector, there are still on average 52,000 unfilled tech roles, suggesting that skills shortages remain a significant challenge for firms.
Despite this, the sector has shown signs of resilience, with annual labour productivity growth increasing 3.6 percentage points from Q1 to Q2.
According to the study, average weekly earnings in the tech sector are up 8% year-on-year, currently standing at £1,146 a week (just shy of £60,000 a year). This marks the largest growth across the sectors, with average tech salaries 80% higher than all other industries.
While this uptick will have been influenced by the cost of living crisis, the fact that this spike is significantly higher than other sectors suggests pay inflation is largely being driven by continued skills shortages.
The data further indicates that the layoffs noted since the end of 2022 have led to many professionals moving into contract roles, with the share of employees with a temporary work arrangement in the tech industry up 0.2% quarter-on-quarter.
Robert Half regional director Kris Harris it is clear that, despite the layoffs and general uncertainty in the sector, demand for specialists is still outstripping supply.
He added: “While firms are using financial incentives to source the skills they need – largely driven by the demand of candidates themselves – this isn’t a sustainable solution in what remains are tight economic landscape.
“The skills gap has been prevalent for a number of years now, but as tech innovation continues at pace, now really is the time to take action before it’s too late for some businesses that will ultimately lose their competitive standing without the right talent.
“Diverse hiring will certainly play a critical role and initiatives need to be implemented quickly if this resourcing gap is to be closed. The Amazon Web Services (AWS) re/Start programme, which aims to upskill underrepresented or underemployed groups with the necessary skills for them to succeed in entry-level tech roles, is a prime example of a pre-existing initiative that delivers real results.
“Upskilling and reskilling talent where other functions are perhaps facing lower demand is also another viable option that needs greater focus.”
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