There is hardly a day that goes by without some negative news from the IT market, and the impact of this is increasingly being felt in the everyday frustrations of IT and HR professionals working in the IT sector. But what crisis is actually happening and where might it lead in the IT staffing market, which has been booming in recent years?
The crisis in the IT industry has not just started!
But not even at home, the phenomenon is worldwide. More and more articles are looking at how the demand for tech companies has grown enormously under COVID, the effects of which we have all felt: soaring notebook and IT asset prices, start-ups growing from nothing, or the incredible rise in IT wages. Today, a junior is asking for the same salary as a senior 2-3 years ago, and a senior is asking for the same salary as a senior IT professional at the same time. The labour market has changed at an incredible pace, with employers and HR professionals alike scratching their heads wondering “where does it end”.
Maybe right here and now!
The US tech sector has already started to see a huge change in 2023, with hundreds of thousands of IT professionals being made redundant by big names such as Apple, Google, Meta, Amazon, Microsoft, Nvidia, Tesla (often referred to as the “Magnificent Seven”), and Ericsson, to name just a few of the biggest layoffs in the news. Apparently it’s not over yet, with tens of thousands of redundancies in the first quarter of this year. And the new recruits to the IT market could also give a boost to the temporary employment market.
We couldn’t avoid it either!
The shift in the domestic IT labour market was already felt from autumn 2023. Employers offered fewer and fewer open positions, many companies announced staff freezes, and IT service providers’ sales professionals found it increasingly difficult to open new positions due to cautious customers. This distrust is still palpable today, and it is a new practice for larger companies to consider classic TM outsourcing before outsourcing entire projects to assess the in-house qualities of an IT company. Then came the news in turn: GreenFox announced back in December, and CodeBerry announced in February that they were closing down for good, thus eliminating a significant segment of junior training in the domestic IT sector. As Greenfox put it in its announcement last December, high inflation and ever-changing economic conditions had put the company in a financial situation that the owners assessed was no longer sustainable. CodeBerry has similarly justified its closure this year on the basis of financial challenges.
What did the HR professional see in this?
More and more green frames appear around LinkedIn profile pictures: ‘Open to work’. Then it became easier and easier to approach candidates, and updated CVs quickly arrived for the remaining searches. It was also noticeable that sometimes the last job was the same for a significant number of candidates, or there were several applicants from the same rural town. We also received a few CVs from friends and acquaintances without a position to help their wives, husbands, boyfriends, if we saw something, let us know. Managers with serious professional backgrounds were looking for their new positions, much seen project managers, business analysts, scrum masters, software developers, testers, the list is almost endless. It is clear that the “slimming down” has spread to us too!
Can we expect a marked change?
Of course, you could say that without knowing what you’re saying, because such challenging times always bring a twist. Which seems to be a reversal of supply and demand. Whereas in previous years there was, to put it crudely, 1 candidate for every 5 positions, now there are 5 or more candidates for every 1 position, and this also represents a huge opportunity for recruitment agencies to serve the increased demand of their clients with quality. It is not easy to find a job in certain areas of the IT profession. Candidates still seem to want to maintain their previous salaries, sometimes even to increase them, but the competitive environment is quickly making them face reality. Let it be! There are already signs that candidates are showing a willingness to lower their demands. Living expenses and credit must be paid, few can afford to wait. Again, employers can dictate. But there is something else. While it used to be fashionable to work on a contract basis, the so-called “contract”. “This has become a very risky form in today’s climate. More and more candidates are thinking about a declared employment relationship, and security has become more important.
What comes next, “seven lean years?”
We are confident that the biblical analogy is better than the situation in the temporary employment market, but we do not want to speculate. We are watching, analysing and following events. We provide employers with IT professionals to solve their challenges over different time frames. And for IT workers freed up by the above circumstances, we offer a variety of opportunities in Hungary’s leading small, medium and large companies. We maintain a close relationship with our clients and candidates, trying to provide both parties with useful advice and assistance, as well as to maintain or even enhance the credibility of the HR profession.
