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Nick BancroftMarch 27, 20242 min read

Pay rises stall for tech workers

Recent data indicates that salaries for technology professionals have stagnated, accompanied by a significant decline in job opportunities. Yet employers say many candidates are still looking for the astronomical Silicon Valley salaries in Australia.


Employment Hero's latest findings reveal that the median hourly wage for tech workers decreased slightly from $57.20 to $57.12 in the past year, marking the sole sector where compensation regressed. Drawing from a dataset encompassing over 150,000 small and medium-sized businesses along with 1.5 million employees in Australia, the SME Index tracks wage patterns and industry trends.


Contrary to other sectors experiencing at least a 6% annual pay increase, tech continues to boast the highest median hourly wage across industries, following a surge in salaries during the pandemic. Recruiters observe a cooling off in tech sector activity as employers reduce hiring efforts while numerous candidates, impacted by layoffs, seek new employment opportunities.


On a month-to-month basis, the median hourly wage for tech roles declined by 4.8% from $59.98 in January, with sector employment seeing only a marginal 0.1% increase. Eddie Kowalski, senior insights manager at Employment Hero, suggests this significant drop between January and February may indicate a correction from inflated pandemic-era salaries due to widespread layoffs in the technology sector.


Kowalski notes a flattening in employee growth, signalling a shift towards fiscal austerity and short-term profitability, affecting employee compensation. Although long-term growth is anticipated in the tech sector, workers may experience tighter financial constraints during this adjustment phase.


James Fogelberg, CEO of Landmark ID, observes a surge in candidates applying for software engineering roles compared to 18 months ago. However, salary expectations remain high, particularly among those accustomed to above-market-rate pay from previous positions.


Data from Seek shows a modest 1.9% increase in advertised salaries in the information and communication technology industry over the past year, with a mere 0.3% growth in the last quarter, reflecting ongoing sluggish demand for ICT labour and a 32.2% decrease in job advertisements year-on-year.


Recruiters highlight persistent skill shortages in cybersecurity, data science, and artificial intelligence, exacerbated by reduced technology spending and competition for sales talent.


Claire Alexander, formerly of Zip and now running ThinkTechStartup, notes a shift in tech job dynamics, with previously headhunted professionals now actively applying for roles. Despite market shifts, candidates remain firm on salary expectations, showing less interest in equity in start-ups and maintaining financial standards amid economic uncertainty.