Cost of living influencing technology career decisions

Almost 50 per cent of technology employers are planning to increase salaries above three per cent, while a large majority (84) per cent of employees are expecting a pay rise of above three per cent, the recently released Hays Salary Guide has found.

According to the Guide the cost of living was the top reason employees were looking to leave their current employers. The report noted this drove a 750 per cent increase in employers’ considerations when determining the value of a pay rise.

In comparison, Matthew Dickason, CEO at Hays, said 77 per cent of employees are either looking for or planning to look for a new job in the next 12 months.

“The mismatch between what employees want and what employers are willing to offer will play out over the next year, with 35 per cent of employees being dissatisfied with their salaries and 77 per cent saying it doesn’t reflect their performance,” he said.

“We have seen a trend of employees expecting higher salary increases over the past three reports, with 58 per cent of employees indicating they believed they would benefit financially from changing jobs in the next 12 months.

According to Dickason, in 2019, 67 per cent of employees expected a pay rise of less than three per cent. In just five years, the pendulum has swung to 84 per cent of employees expecting a pay increase of more than three per cent.

“However, we are also seeing a stabilisation in the number of technology professionals asking for a pay rise (58 per cent) down from 70 per cent last year and 58 per cent the year before,” Dickason said.

The report found that technology businesses were optimistic about hiring new staff, with 54 per cent of employers expecting to increase permanent headcount over the next 12 months. At the same time, just over half of those employers looked to increase staff levels by more than six per cent.

Thirty-seven per cent of technology employers were also looking to increase temporary staff, with 56 per cent increasing temporary staff by more than 6 per cent.

Dickason said that salary was a critical factor in attracting, rewarding, and retaining technology professionals, additional benefits employers offer this year to retain valuable employees include flexibility, professional development, mentorship programs, and performance bonuses.

He noted that positive changes to a company’s approach to ESG, diversity, equity and inclusion, and career progression are some ways employers can hold on to valued staff.

“With skills in demand, you still have bargaining power, but it’s important to avoid pricing yourself out of consideration. Yes, employers are investing in salary increases, but the commercial reality dictates that salary increases can only stretch so far,” Dickason said.

“We also saw a small rise in employers being forced to offer higher salaries than planned due to the skills shortage from 64 per cent last year to 72 per cent this year, with 65 per cent of organisations expecting the skills shortages to impact their organisation in the year ahead.”

Dickason advised technology workers to consider the whole package when negotiating a new job or your next pay rise. They should think about what they’d value and what could benefit” their life and career long-term”.

In its 45th year, the Hays Salary Guide is based on a survey of about 15,000 employers and professionals, covering more than 1,270 roles across 26 industries.