With our eye keenly on trends and changes across employment, recruitment and candidate concerns, the downward trend in salary has not gone unnoticed.
Many job seekers have noticed that positions they were applying for up to three years ago seemed to be offering more than what is on offer today. There is an explanation for this, and while it may not math well in financial terms, it may help to pan out the camera and take a look at the whole picture.
In our post-Covid world, we are still unturning stones and finding some remains of the pandemic that are affecting the balance of things, or “the way things were.” In Australia, Covid hit our shores in March 2020, many office workers cleared their desks en masse and set up to work from home. Many have not returned to full-time office work. Some haven’t returned at all.
Many organisations had to pivot instantly to a very novel way of working. Anything that was not mission-critical was instantly shelved. Uncertainty and instability were, in fact, a constant certainty. We all held our behind-mask breath and project pipelines were put on indefinite hold while we just tried to make some sense of it all.
By 2021, we could breathe a bit easier, albeit from a safe social distance. We’d found a way to make it work; from home. We realized that the gears still needed to turn and the machine still needed to run. There were projects on hold that needed to be completed and scheduled projects that needed to move forward. There was an undeniable backlog brought on by everything coming to a stop so suddenly.
Cue: whirlwind. The employment landscape swung from dismissals, forced leave, cancelled bonuses, to a proper hiring frenzy. Company budgets were flush after their reduced expenditure. And businesses were keen to get right back to “the way things were” without further delays.
Employee sentiments were not as quick to flick the switch back. After such turbulent times and the cloud of uncertainty still hanging very low over their heads, this is understandable.
Cue: perfect storm. All the conditions were ripe for the spike. Cash-rich business with increased project pressure met prudent personnel. The result of retaining established employees by all means available? Salaries paying up to 30% above market rates.
In our years in the recruitment industry, this was unprecedented. Our phones were red-hot, recruiters being asked to urgently fill new roles, companies offering the salaries that smashed through the ceiling of established salary ranges. The cynical amongst us cautiously advised candidates that this was an anomaly, and that what goes up, must come down. We watched on, however as the blip turned more into a steady echo. Then, the downturn began to register in late 2023. And by this stage of 2024, the speed picked up to tumble salaries back to “the way they were,” pre-2020.
Inevitably, organisations that hired high have now felt the strain of stretching their budgets that thin. There have been redundancies. And companies are now offering more modest salaries for new hires.
We are also seeing a proliferation of earnest job seekers, which opens up options for finding talent. Furthermore, a sizable reduction in job ads with an increase in applications per ad.
So, in a nutshell, IT professionals had a moment in the sun, brought on by staying indoors. It has nothing to do with skills, experience or the candidate pool, whatsoever. Businesses were in navigating unchartered waters and did what they needed to keep the ship afloat. Things were smooth sailing for a while, then we had a period of inclement weather and navigating heady seas. We ended up sitting sipping tropical drinks on a beautiful island for a while, but now we’re back to sailing along on pretty steady waters.
The pandemic brought on many changes that we’re going to feel the effects of for time to come, including rising costs and changes in spending. There is a time of adjustment, and the adjustment to our pre-2020 salaries perhaps trail behind “the way things are” in the current cost of living landscape. It may be tough for now, but we’ve got our eye on what the future brings.